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

[Digger88]

Work is slow, there's not enough to go around and you're already a couple months behind in your bills. AMC#1 says the prevailing fee for a 1004 is $400 right now, but you can get more work if you bid $375. Which choice will you make:

I'd take everyone they had why sit when you can work

 

[shrubberyvaluation]

A field is so overtaken by AMCs that the appraisers who work for them (since the AMCs comprise a large share of the orders ) are months behind on bills, and their only way to survive is to reduce their fees to such a low level that they are barely profitable - that is not a profession, or a profession worth going into IMO - unless one is a masochist or the exception wrt some special niche or connections for client base.
They are not pissed because they have to compete; they are "pissed" because the only way they can get work in an AMC environment is by ruinous competition.

Not sure what ruinous competition is. My issue is when AMCs want morally flexible "appraisers." Oh you won't do STR on a single family rent schedule, well we know you shouldn't but we will move on to the next til we find someone stupid enough or morally flexible enough to do it. Now some of it might be the lenders wanting this and finding morally flexible AMCs to do their bidding.

 

[J Grant]

George used the word ruinous competition, and it was a very good descriptive word for the AMC environment.

There is no normal S/D completion possible because a large amount of the GSE appraisal orders gets funneled into a very narrow channel of demand ( from a limited number of AMCs's who handle most of the volume. This gives them tremendous leverage over the supply side ( of appraisers )

 

[shrubberyvaluation]

George used the word ruinous competition, and it was a very good descriptive word for the AMC environment.

There is no normal S/D completion possible because a large amount of the GSE appraisal orders gets funneled into a very narrow channel of demand ( from a limited number of AMCs's who handle most of the volume. This gives them tremendous leverage over the supply side ( of appraisers )

Ah good to now, I didn't read the whole thread, came in late.

 

[J Grant]

I suspect that some still don't understand the fairly simple question.

In your stated scenario, HELL yes I'd take a $25 cut for more work, if I was still in that business. I think you'd be a fool not to if you were at the end of your financial rope. My family and finances come first. Screw my competition if they don't like it. I'm running a business, not some feel-good support group for people with too much pride and/or too little business sense.

We understood the question very well.

It was a sanitized scenario with a $400 or $375 fee- real-world AMC 's who fee bid out in a slow time are probably closer to below 300..

Hell yes, you'd take a $25 cut for more work - would you take a $200 cut?

 

[CGinMN]

To keep the lights on, yes.

 

[J Grant]

To keep the lights on, yes.

The above is a choice that most of those who work for AMC;s have already made.

It's pathetic that a so-called career has sunk to that level.

 

[Surf Cat]

The above is a choice that most of those who work for AMC;s have already made.

It's pathetic that a so-called career has sunk to that level.

It's not just appraising though. There's quite a few careers where automation, artificial intelligence, etc., has just decimated careers.

My son is a Gen Z. He just acquired a job that if he plays his cards right, it could be a career and at the end, a pension. Many of his friends with college degrees feel as if they'll never get ahead let alone buy a house. But we are talking California.

 

[George Hatch]

Now for part two of the question. Because you know that regardless of how the poll goes there will always be a follow-up to whatever the responses are:

Pick whatever numbers you want for the splits. If you think $400 is sanitized and contrived then lets go with $300. Or $250. Makes no difference because the choice is still the same. We have a poll result that has been running about 50/50 between "I will never yield to my competition" vs "I will do what I have to do in order to keep rice and beans on the table."

So in a down market (or when the alternatives are gobbling up the easy ones) when there isn't enough of the conventional work to go around in the first place, do the users actually need the majority of appraisers to come to the terms being offered or can these users meet their needs with just the fraction of the appraisers who will takes what's on offer in order to keep working?

If 40% or more of the sales in a declining RE market are REO resales, what effect does that have on the overall pricing structure for the sales that do sell?
If 40% or more of the appraisers will trade fee for volume what effect does that have on the overall pricing structure for all of the appraisals going through the AMC pipelines?

What do you think people will actually do when faced with such choices? Because it is exactly what other people will do that has resulted in why the AMC splits vary by locale.

 

[Dublin ohio]

The above is a choice that most of those who work for AMC;s have already made.

That is an awful broad statement. Since you don't do AMC work. I would have to come to the conclusion that your "experience" with AMCs is pretty much non existent. Around here the low price assignments are pretty much gobbled up by the same appraiser's. Just had a rash of $215 1004 blast orders come through my e-mail. Before I could even connect through the link to counter they are gone. I don't really counter since I know they get taken immediately. I am just curious how fast they get taken. It is sometimes measured in seconds.