Poll: Will you trade fee for volume in a slow market?

[George Hatch]

This question has already been answered in AMC land - of course, a segment of appraisers will work for less to snare the orders in an AMC environment;- it has been going on for years now.

My point is that it should not be happening in a profession where the appraiser is responsible for a product involving hundreds of thousands of dollars in collateral and a homeowner's biggest asset in many families - a less apprenticed or competent selected so the AMC makes $25 more? As you note, a number of appraisers were either starved out or choose not to accept AMC work, and often, they are the more competent and experienced.

I'm not asking what should happen if this was Heaven and the joint was being managed by the angels. I'm asking what people will actually do when faced with ruinous competition in the marketplace.

 

[Flakey]

No. Volume is low with my direct clients but they still pay full fee. Unless AMC#1 can demonstrate their fees are down, they are asking me to make up for their low volume. They don't rush to increase fees when volume is up. I'm already doubling down on developing additional clients. I'm not gonna waste my time/energy on them. BTW, I don't have any AMC clients for just this reason.

 

[ucbruin]

Based on the $400 vs $375 you guys would rather get a 2nd part-time job (because appraising is currently your 1st part-time job)....
You guys are crazy or liars or both....

 

[J Grant]

I'm not asking what should happen if this was Heaven and the joint was being managed by the angels. I'm asking what people will actually do when faced with ruinous competition in the marketplace.

And I told you, we already know what people will do when faced with ruinous competing ( they lower their fees for AMC's )

My point is RUINOUS COMPETITION has no place with GSE loan work where RUIN is the right word indeed - ruining the chance of a borrower or investor getting an experienced and competent appraiser who got run out of business or chose not to do AMC work - making the choice of which appraiser will value a family's biggest asset (their home ) into a flea market low fee bazar so a lender gets free of cost service and a third party AMC rides off the modest fees of appraisers instead of charging their lender customer a cost like every other business does.sd

 

[George Hatch]

No. Volume is low with my direct clients but they still pay full fee. Unless AMC#1 can demonstrate their fees are down, they are asking me to make up for their low volume. They don't rush to increase fees when volume is up. I'm already doubling down on developing additional clients. I'm not gonna waste my time/energy on them. BTW, I don't have any AMC clients for just this reason.

I framed the hypothetical in a specific manner wherein you are already behind and are already hurting. I didn't frame it in reference to your specific situation right now.

"Work is slow, there's not enough to go around and you're already a couple months behind in your bills."​

Does that change your response? For some people it will and for others it won't.

 

[George Hatch]

And I told you, we already know what people will do when faced with ruinous competing ( they lower their fees for AMC's )

My point is RUINOUS COMPETITION has no place with GSE loan work where RUIN is the right word indeed - ruining the chance of a borrower or investor getting an experienced and competent appraiser who got run out of business or chose not to do AMC work - making the choice of which appraiser will value a family's biggest asset (their home ) into a flea market low fee bazar so a lender gets free of cost service and a third party AMC rides off the modest fees of appraisers instead of charging their lender customer a cost like every other business does.sd

"competition has no place with GSE work" is going to be a tough sell to the decision makers. Any of them, including the politicians.

 

[J Grant]

"competition has no place with GSE work" is going to be a tough sell to the decision makers. Any of them, including the politicians.

You said RUINOUS competition, not the more normal form of competition ( normal competition is not possible in the AMC realm due to extreme imbalance of S/D via the ordering )

Speaking of competition, why do the AMCs get a government-sponsored perk (HUD bundled ) for the AMC to get compensated by shorting $ to their vendor appraisers rather than charging their lender customers a hard cost like every other business out there has to do to compete?

 

[Surf Cat]

I didn't pick any of the choices in the survey. But I will give a short synopsis how we tried to crack the code.

My mentor and I tried to "tag team" the low fee AMC issue with the mentality of bare minimum of comps, bare minimum of commentary. Wham bam thank you ma'am appraisals, while still adhering to the fundamentals of a well-supported report.

After all, we've seen (as many of you have) reports that said AMC's were accepting. Non-competitive sales in location and/or Construction, lack of bracketing, out of the area sales without location adjustments, lack of time adjustments, boilerplate nonsense not pertaining to the subject at hand, finalized with a value from who knows where the number came from.

Surely, we could do better. Well,
we failed.

Minimum of six comparable sales. Explanations of expanding the parameters of time and distance, bracketing of GLA and site area, inclusion of sales with identical bed, bath count, explanation of externalities, special features, adjustments..... you know, an appraisal report. But it was a minimum of a $600 report, not a $300 report.

Thus, we were unsuccessful at providing a $300 report that were to our standards. Our morals and ethics, keeping our licensure safe, adhering to USPAP and the certifications within the report got in the way.

Right now, I'm not doing any AMC work or much appraisal work at all. I'm fixing water damage between the upstairs and downstairs bathrooms. We are lucky that the wife has suitable income in order for us to do this. In me doing this, we are saving a boatload of money in construction costs.

When finished, I'll reevaluate getting back into the game or throwing in the towel.

 

[CGinMN]

If you are actually hurting and a couple months behind on bills you're not spending free time on AF complaining about low fees. You are grateful for every job you get that helps keep your boat afloat. Everyone here has their head above water, they're just pissed they have to compete.

 

[Surf Cat]

It's funny..... This thread going on at the same time as "TAF gone wild" thread. In the gone wild thread.... scholarship money is being pumped into the PAREA system to "blaze a trail" to enter into this "exciting profession" to build a workforce for years to come.... when current appraisers, depending on the location, are being starved out by competing with other appraisers with the lowest fee to win the job.....