No one wants to work

[Tru Red]

For a long time, I've thought that the Lender's and AMC's complaints about an appraiser shortage were over hyped. My suspicion was that there was a shortage of appraisers willing to work really cheap and really fast. Now I'm starting to believe that they have a point about a shortage. Today, I got a call from a friend who works in a small AMC. They have been unable to find someone who was even willing to quote a fee for an appraisal at the beach. It's well outside my service area... but, I probably could have gotten any fee I asked for. As an old manager used to tell me (back when fees were $300 or so, if every appraiser charged $500 or more, then lenders would be paying $500 or more.

Wow....such a profound paragragh. Did it hurt to think this?

 

[NJAPRAZE]

For a long time, I've thought that the Lender's and AMC's complaints about an appraiser shortage were over hyped. My suspicion was that there was a shortage of appraisers willing to work really cheap and really fast. Now I'm starting to believe that they have a point about a shortage. Today, I got a call from a friend who works in a small AMC. They have been unable to find someone who was even willing to quote a fee for an appraisal at the beach. It's well outside my service area... but, I probably could have gotten any fee I asked for. As an old manager used to tell me (back when fees were $300 or so, if every appraiser charged $500 or more, then lenders would be paying $500 or more.

appraisers want orders from clients and will be responsive to those clients; many AMCs continually "shop" price/TAT - just seeking a body to fill; tbh - get so many requests that many go unanswered or ignored, as you know its a fishing expedition (for to dtermine their own bid) or they're shopping for lowest cost provider; these same AMCs are the ones that alternatively assign for a fee (at fee/rate from 2-3 yrs ago) and auto-cancel/reassign when request higher "C&R" fee.

bottom line -- there are many appraisers out there; many don't want to work for AMCs as much, want reasonable fees, and business (vs continually quotes & wasting time w/unproductive activity)

lenders that pay reasonable fees and remove the middleman -> prob have quicker overall TAT, responsiveness, etc from their appraiser partners [with no shortage]

 

[NJAPRAZE]

The problem is a set supply of appraisers ( with a number aging out of the profession ) and a work demand for orders that goes in cycles of busy and slow. In a slow cycle, there can be a surplus of appraisers, whereas in a busy cycle, there is a shortage of appraisers. So unless lenders want to subsidize appraisers in slow cycles (sarcasm ), pay them to sit a year on standby so they can be at the ready when it gets busy, the cycle of shortage and surplus will continue. The Appraisers on staff get laid off in a slow time too so that is not a safe harbor either.

The cycle of slow and busy is made far worse by the fact that when it gets slow, the AMC's employ their worst tactics of reducing fees. Appraisers remember that in the busy times and might ignore pleas from the AMC's who screw them over in a slow work cycle.
My experience is also that by taking an order from a very low volume client, even at a good fee, distracts from being able to finish orders on time for my steady clients, and it becomes simply not worth it to take on orders from a small AMC or lender that might only call once or twice a year -- I always regret taking these on no matter the fee, they always somehow take a longer time and make me late for my good clients and why should I risk that to help out some company I might never hear from again.

The continually expanding levels of scrutiny on res lending assignments make even a so called simple assignment a minefield - bidding is a PITA and takes time so why would an appraiser even bother to do it for an oddball assignment- lenders and AMC;s have themselves to blame for creating a "shortage" - they might attract newbies to train but will they stay in a field with despite having some good earning potential in a busy time, has built in limitations financially and where an appraiser is subject to intense scrutiny , ROV, and possible future reviews or complaints on any order no matter how mediocre the fee was.

trend moving forward - with push for bifurcated appraisals/hyrbids/desktops - > is that the larger AMCs will start hiring more W9 appraisers, to then "mentor" (i.e. manage) teams of newbies/apprentices that are working towards their licenses to do the fieldwork/gruntwork only ---> take the photos, sketch, etc.

lines will be blurred further as the "AMCs" will essentially become "in-house" appraisal shops, and then outsource the challenging assignments when their low cost/high margin system doesn't work

this is already starting -- Valuation Connect [Opteum], and others!

 

[sputnam]

It's rational to shop fees. I expect that companies interested in my services will ask how much those services will cost. When I need services... of whatever sort... I want to find the best value for my money. That doesn't always mean the lowest price. Unfortunately, appraisals... especially residential appraisals... are seen as commodities. One characteristic of a commodity is, every unit is the same as every other unit. Appraisers have raced to the bottom and as a consequence, Lenders don't really care who the appraiser is. Brand new or well experienced are seen as the same. Those who are appraisers know that isn't true... but we aren't buying our own product.

 

[NJAPRAZE]

It's rational to shop fees. I expect that companies interested in my services will ask how much those services will cost. When I need services... of whatever sort... I want to find the best value for my money. That doesn't always mean the lowest price. Unfortunately, appraisals... especially residential appraisals... are seen as commodities. One characteristic of a commodity is, every unit is the same as every other unit. Appraisers have raced to the bottom and as a consequence, Lenders don't really care who the appraiser is. Brand new or well experienced are seen as the same. Those who are appraisers know that isn't true... but we aren't buying our own product.

Elliot (Nationwide) & AppraisalNation are two such AMCs from your area that are guilty of this! Blast out "bid" requests-- often assigning to lowest cost provider (w/TAT as secondary consideration); should be of no surprise when at some point in time... they begin to get no responses; hence - claim that there's an appraiser shortage

 

[Mejappz]

Elliot (Nationwide) & AppraisalNation are two such AMCs from your area that are guilty of this! Blast out "bid" requests-- often assigning to lowest cost provider (w/TAT as secondary consideration); should be of no surprise when at some point in time... they begin to get no responses; hence - claim that there's an appraiser shortage

Classless needs to be in the mix as well. Every time I get a blast order from them, they immediately go in the trash.

 

[sputnam]

Elliot (Nationwide) & AppraisalNation are two such AMCs from your area that are guilty of this! Blast out "bid" requests-- often assigning to lowest cost provider (w/TAT as secondary consideration); should be of no surprise when at some point in time... they begin to get no responses; hence - claim that there's an appraiser shortage

Yep. I know of AppraisalNation but, don't know much about them. I'm more familiar with Elliott. When they don't know someone in an area, or when the usual folks decline the assignment, they broadcast orders. They have to... their job is to find someone to do the appraisal the Client has requested. Assiming that more than one appraiser responds, Elliott doesn't decide which appraiser. The Client tells them which appraiser to engage.

If you don't want to bid, then don't. I just don't get why so many seem to think they need to rant about it. The AMCs are people trying to earn a living. They aren't out to get appraisers.

 

[J Grant]

Yep. I know of AppraisalNation but, don't know much about them. I'm more familiar with Elliott. When they don't know someone in an area, or when the usual folks decline the assignment, they broadcast orders. They have to... their job is to find someone to do the appraisal the Client has requested. Assiming that more than one appraiser responds, Elliott doesn't decide which appraiser. The Client tells them which appraiser to engage.

If you don't want to bid, then don't. I just don't get why so many seem to think they need to rant about it. The AMCs are people trying to earn a living. They aren't out to get appraisers.

AMC's should earn their living the way any other business does - by charging their customer ( a lender) for the management service the AMC provides to the lender. The lender, if they want to use an AMC, should compensate the AMC the way a lender compensates other service providers like accountants or IT support.

But the AMC business is "special", in that it typically does not charge their lender customer, the AMC gets compensated as a pass through payment of a split from the appraisal fee the borrower paid the lender. That sets up an incentive for the AMC to seek the lower or lowest fee from the appraiser, because the AMC earns $ from the margin of the split. Which translates to it costs the lender nothing, as in zero $ to use an AMC ( thanks to the perk of bundled fee on the HUD ).

Name another business that operates this way. I can't name one. Most AMC's are not out to "get" appraisers, and might be run by some decent folks, but their business model means they are onboard with getting their profit from a fee margin. It sounds to me like you are making an assumption, ( outside of a few rare special assignments ) that the lender client reviews the bids and tells the AMC which appraiser to use.. It makes no sense, because the reason a bank client uses an AMC is to relieve them of the burden of appraisal management.

 

[Tim Hicks (Texas)]

Yep. I know of AppraisalNation but, don't know much about them. I'm more familiar with Elliott. When they don't know someone in an area, or when the usual folks decline the assignment, they broadcast orders. They have to... their job is to find someone to do the appraisal the Client has requested. Assiming that more than one appraiser responds, Elliott doesn't decide which appraiser. The Client tells them which appraiser to engage.

If you don't want to bid, then don't. I just don't get why so many seem to think they need to rant about it. The AMCs are people trying to earn a living. They aren't out to get appraisers.

I guess you have never had an AMC call you and tell you that your fees are too high and it will take $210 to get assignments. Or the next month they call back and say it will take $175 now. Or had an AMC call to ask you to assist their appraiser with comparable sales, when they have the exact same MLS sales as you do. I offered to do the appraisal myself for my fee and they declined.

 

[sputnam]

I guess you have never had an AMC call you and tell you that your fees are too high and it will take $210 to get assignments. Or the next month they call back and say it will take $175 now. Or had an AMC call to ask you to assist their appraiser with comparable sales, when they have the exact same MLS sales as you do. I offered to do the appraisal myself for my fee and they declined.

Sure I have. So? They don't owe me anything. They don't make business decisions for me. I quote the fees I want for assignments. I either get my fee or I decline the assignment. I turn down work every day... and I still have plenty. An AMC can be as cheap and as unprofessional as they want to be. Those who are can get their work done by someone else.

As for where the fee is coming from, I do not care how much an AMC makes or where they get it from. It's none of my business. I decide what my fee will be. They pay it. Or they find someone else. If you are accepting low fees, that's on you.