Hybrid

[George Hatch]

Why else would someone take on a trainee other than the make money off them? I've been someone's employee for the first 15 years of my working life - I made every boss or owner I ever had money. Far more than I ever made working for them.

But the system here is too complicated. When I started out, I got my own clients, cashed my own checks, and every 2 weeks, dropped off $2,000 at my supervisor's home. Eventually he took less as I was doing 99% of the report. I was happy with the arrangement.

I'd never do this is I was stuck in a 60/40 fee split mill when starting out.

My point wasn't to single you out; you merely provided the illustration of the point I've been making all along that some appraisers will make such decisions if the circumstances enable them that way.

 

[J Grant]

Even if what you say is true, so what?...it does not change the anything...the fact is that it is the oversupply of appraisers that is the reason that an AMC or any other aggregator can find lower cost appraisers. Once the balance of supply demand changes so that there is no longer an oversupply of appraisers, appraisal fees increase quickly and by a large margin. This was proven beyond any shadow of a doubt over the past few years in the COW states.

Why not remove the intermingling of what appraiser gets paid and what AMC makes and avoid the next decade of starving appraises out to achieve fee parity? ( and the worst appraisers might survive this kind of cull like weeds in a toxic soil ).

Why not just sever the fees and let the AMC charge whatever they want or can get to their customers? Separate the AMC business charge from the appraisal fee and what appraiser makes for the work the appraiser performs

 

[DWiley]

But they should make their profit by charging their customer ( the bank or lender ) who benefits form using the AMC service, whether per file or annual retainer etc( whatever they arrange with their customer ) , keep it separate from, and not contingent on what $ appraiser makes or intermingled with the appraisal fee.

I am glad you feel that way, because that is exactly what we do. I take exactly $0 from the appraiser's cut. The appraiser get 100% of what they bill to me. Then I add what we charge, and give the total bill, with a breakdown of who gets what, to the lender. The problem is that you are stuck with the mental image of how AMCs worked 20 to 30 years ago, and it hasn't been that way for a long time now.

 

[J Grant]

[

Again, why are some lenders choosing to use AMCs? Are they being forced to do that or are they choosing to do that; and if they're choosing to do that then what's their motivation?

When are you going to figure it out? The AMCs aren't doing ANYTHING that they aren't being pressured to do by the lenders they work for. The AMC that unilaterally goes to a cost-plus model over their client's objections will get eaten alive by their competition.

You just ducked the question AGAIN, by asking about why lenders use AMC's which is a different topic.

 

[djd09]

Uniform Standards of Poor Appraisal Practice. They can use the same letters.

 

[George Hatch]

How did you get into the business? Were you born with a certification?

I hate the trainee system. I'd prefer a mandatory 4 year appraisal/real estate degree requirement.

I worked for other people for 7 years before I went out on my own, that's how I got into this business. So when licensing came online I started out with the CG.

 

[George Hatch]

[

You just ducked the question AGAIN, by asking about why lenders use AMC's which is a different topic.

I'm not ducking the question. You just don't like the answer because you don't understand how the lenders fit into this equation.

Here's an inconvenient truth for you: The AMCs didn't invent or even perfect the fee split.

AMCs pay less when and as they can. So do all the fee shops and so do all the gov't and private employers of appraisers, both models existing long before the first AMCs came into existence.

The difference is that lenders aren't in the appraisal business, whereas AMCs and fee shops are. Lenders (ostensibly) make their profits off of making loans, not producing appraisals to make loans. Although you'd never know that by looking at the difference between what they charge for an appraisal their staff does vs what their staff appraiser gets.


What's the difference between a fee shop that has a lock on a lender's business and an AMC that has such a deal? They're both paying splits to the appraisers who are doing the work, and they're selling the lender on the merits of the streamlined relationship the lender has to manage when compared to trying to interact with a dozen individual appraisers.

Shoot, we just had an appraiser tell us he'd set up a fee shop if he could figure out how to make it pay. Nor would that be an immoral act if he could pull it off. I didn't question the morality of it; I questioned its economic viability over the long term.

 

[J Grant]

I am glad you feel that way, because that is exactly what we do. I take exactly $0 from the appraiser's cut. The appraiser get 100% of what they bill to me. Then I add what we charge, and give the total bill, with a breakdown of who gets what, to the lender. The problem is that you are stuck with the mental image of how AMCs worked 20 to 30 years ago, and it hasn't been that way for a long time now.

You are being indigenous. YOU (your AMC ) takes 0$ from what appraiser's cut is, but the fact that the appraiser gets a cut and not the whole appraisal fee is the point.

The appraiser's cut is from what lender sends the AMC , and that i the problem...they should not be intermingled or contingent on percentages of each other. The AMC should be charging its own separate fee or yearly retainer (however they want to structure it ) to their lender customer for their MAC service to that customer. Remove it from a cut/fee split division ....

 

[J Grant]

AMCs pay less when and as they can. The difference is that lenders aren't in the appraisal business, whereas AMCs are.

Finally, an admission of truth. It is NOT technology that is driving the lower fees from AMC's and neither is it an over supply of appraisers. The AMC;s are in the resell appraisals for profit business and lenders are not.

THAT profit motive of the splits % profit to them for AMC model is what drives fees down.

Technology or over supply ( where over supply exists ) just allows the AMC to accomplish it better. It is disgusting that appraisals are hijacked away from a needed collateral service, and into a profit generator for AMC;s for tax payer backed mortgage work,

Again, AMC's can profit but doing so at appraiser's expense ( and by extension the appraisal profession's expense ) is wrong. Lenders are vastly more $ worth than appraisers, let the lender pay for the AMC service or pass it thorough as a separate charge to the borrower.

 

[Mr Rex]

JG, you have mentioned that you used to be a RE agent. Why no more? Could it be too much competition? Most RE fees are entrenched (although collusion isn't allowed)