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It's One Big Freaking Auction Of Appraisal Services

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Sean Sutton

Senior Member
Joined
Jun 19, 2006
Professional Status
Certified Residential Appraiser
State
Missouri
I have been at it for almost 14 years. Even at its worst around 2008-2009 when AMC's were physically calling everyone shopping for the lowest bidder it wasn't like this.

Now its automated websites doing the same thing but the number of AMC's that have a bulk of the work is ever shrinking. It really is monopoly rigged against appraisers. Now we are bidding against each other at rapid speed (thanks to a computer program) while the AMC jockey just leans back in the chair and waits for the lowest bid to come in.

I get so many bid requests each day that I ignore almost all of them. As a business decision, I cannot afford to spend my time quoting everyone and their bother for an assignment that I have only a 10% chance of getting.

Why do you guys keep feeding the monster? Corelogic is now sending out non-stop quote requests...I have never gotten a single one...so they are now ignored. Occasionally they manually assign me a real dog of an assignment that no one wants. :)

90% of my clients still just simply send an order for acceptance but an increasing number of them don't accept even the slightest fee increase request and have similar reassignment programs.

It is ALL just an automated reverse auction for appraisal services....

Did I see today the FNMA is no longer requiring appraisals on purchases? I am sure that is too simplistic but could someone spell out what the policy changes means for us? I saw the AI wrote a letter :)
 

Michael S

Senior Member
Joined
Mar 18, 2009
Professional Status
Certified General Appraiser
State
New Mexico
In almost all cases for commercial appraisals it's based on bidding. Typically we aim for about 20-25% of bids being accepted. Less than that and there's not enough work, more than that and you're leaving money on the table. Sometimes clients will contact us with the intention of awarding the work directly but we still have to provide a fee request which they can choose to accept or negotiate.
 

glenn walker

Elite Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
California
We are now an industry not a profession : ) LOL
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Occasionally they manually assign me a real dog of an assignment that no one wants.
That's when I stopped responding to bank orders that are not directly awarded. Wasting too much time bidding garbage jobs, now they are having a hard time finding any appraisal and offering fees double what they have offered before.
 

EddieB

Elite Member
Joined
Feb 17, 2005
Professional Status
Certified Residential Appraiser
State
North Carolina
Sean, you've nailed how some 80% of assignments are awarded.

Michael, bidding is how most commercial work has always be awarded. How many res assignments equal one comm one? Your success rate of 20% would be great in rresidential. I suspect for me to reach that rate would require a 25-30% fee reduction.

Math says it's a cost savings for me by hitting delete.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
It's Freddie MAc, not Fannie, Freddie waiving appraisals on some purchase orders I need to read what the parameters are re down payment etc.

Yes the new lowest bid trend for regular orders is depressing. So much for C and R...bidding on commercial or high $ residential where a fee can be very large and fee differences between two appraisals a wide spread. But this is sheer flea market bottom feeder stuff, bidding where an appraiser who bids $310 vs $325 for an order
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Michael, bidding is how most commercial work has always be awarded
Most of my clients until 2008 or so asked me to do the appraisal because they thought I was the most convenient or qualified appraiser for the job. I don't recall ever bidding on a bank job. Some large projects may seek bids. I lost the bid to value a lake side estate of a former governor because I bid too low. The winner was close to the highest bid.

Learned my lesson...be sure to bid high on "special" properties. The only issue is to not grin from ear to ear or snicker while bidding...
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Michael S

Senior Member
Joined
Mar 18, 2009
Professional Status
Certified General Appraiser
State
New Mexico
Most of my clients until 2008 or so asked me to do the appraisal because they thought I was the most convenient or qualified appraiser for the job. I don't recall ever bidding on a bank job. Some large projects may seek bids. I lost the bid to value a lake side estate of a former governor because I bid too low. The winner was close to the highest bid.

Learned my lesson...be sure to bid high on "special" properties. The only issue is to not grin from ear to ear or snicker while bidding...

How did they determine a fee? I can see a standard fee for most residential properties but if you've got a client who was directly awarding you a 1,500 square foot office building one day, a 40-unit apartment the next, and a six-tenant retail center the third day did they just pay the same fee on all of them? Did they specify a fee and you had the opportunity to renegotiate or decline if it was too low?

I haven't been at this for too many years but I don't think I've ever had a client throw out the first number. Probably an acknowledgement that in negotiations the first person to speak usually loses.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
I think the OP needs to conversate with Benji and Dezra....
 
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