Price fixing by AMC's

[Lawrence R.]

Please refer.

To all the other threads about AMC's and note that it is my opinion that only the best ones suck.

It is downhill from there.

It is possible we will have to go door to door and burn them all to the ground.

A man can dream, right?

Besides, every appraiser has the right to be comp checked by the original party.

 

[The Warrior Monk]

Appraisal fees for non-AMC work is significantly higher than AMC work.

If you work for with a middleman, you'll always get paid less than if you don't work with a middleman.

 

[hastalavista]

Your fees are not set by you Denis if you do AMC work for the most part ( and based on your opininon I would venture to guess that you do little AMC work).

You are correct. :new_smile-l:

But maybe I misunderstood your argument.
Are you arguing that the fees charged to the lenders are "fixed" by the AMCs? Or, are you arguing that the fess paid to the appraisers are "fixed" by the AMCs? (or, are you arguing both)?

If you are arguing the former, I'm not convinced for the reasons I already stated.

If you are arguing the later, then that would mean the AMCs have a "take it or you are not getting any more business" imposition on appraisers. But that (to my free-market way of thinking) requires me to believe that, as an appraiser,
A. My only source of revenue is an AMC, and
B. They have conspired collectively to fix a price, and
C. That they are not subject to market forces (being able to hire an appraiser to do the job despite their low fee).

A Is not true.
B. Is unknown (at this time)
C. C is not true as evidenced by the posts on this forum by many forumites who say they will not do AMC work unless they get paid their regular fee (and, the get paid their regular fee!).

If the market conditions of competition among appraisers is such that there are enough appraisers who are willing to do work for $200 for an AMC, that is not price-fixing.
In some markets there are.
In some markets there aren't.

There is a significant amount of work that is "locked up" by
AMC's due to the regulations ( I cant cite verse and chapter maybe someone will help me out here) that mandate the ordering process be done by a "neutral" party.

Doug- I've argued before that IMNSHO the worst thing that could happen is to give AMCs some kind of regulatory standing- it hasn't happened yet and I argue if one ever wants things to change, one should hope there never is official standing.

Finally, if AMC X wants to pay me $200 for an appraisal, but Bank Z pays me $400, or Mortgage Broker Y pays me $425, where's the price fix?

But, as you say, I don't do work for AMCs, so maybe my opinion is not credible in this matter- I'll accept that could be!

 

[Randolph Kinney]

To understand the nature of the business for residential appraising, how many funding lenders use AMCs? I know all major lenders use them. I know that mortgage brokers don't use them directly but some ask if you are, for example, LandSafe approved.

It appears to me there is a tiered market for independent fee appraisers; work for mortgage brokers directly (funding lender indirectly) or work for funding lenders through AMCs.

If the appraisal market by volume is majority controlled or influenced by AMCs, then I suppose one can make a case for undue influence on the trade itself. Even if that is the case, so what? I don't see the government doing anything about it. It would take private party legal action.

 

[The Warrior Monk]

To understand the nature of the business for residential appraising, how many funding lenders use AMCs? I know all major lenders use them.

Even with the major lenders, many of them do not order all of their appraisals through management companies. Appraisals coming through the private banking and trust divisions are an example.

 

[Elliott]

AMCs are the big banks attempt at separating production
from appraisal ordering. Probably 15% of my AMC orders
result in the realtor or owner saying something like, "hey,
put that on hold, we still have some issues," which means
"I didn't want you to get the request, I wanted MY appraiser
to get the assignment." Two weeks later the AMC, who are
extremely time sensitive, will dutifully call to say the assignment
has been canceled, which means the other appraiser completed
the assignment with an acceptable number.

 

[Doug Wegener]

Middleman

If you work for with a middleman, you'll always get paid less than if you don't work with a middleman.

Agreed. However, in this case the middlemen have taken over a large chunk of the market due to government regulations.

 

[hastalavista]

Agreed. However, in this case the middlemen have taken over a large chunk of the market due to government regulations.

Doug-

You mention AMCs are a result of government regulations (and you did ask for someone to post those regulations).
I have need to read some of these government regulations regarding appraisal process, third-party vendors and FRTs from time to time. In no place that I am aware do the government regulations establish AMCs?

What the regulatory guidelines do state is that if FRTs are using third party vendors, the FRT is ultimately responsible for regulatory compliance.

 

[Richard Carlsen]

Unless you have proof of collusion between AMC's, accusations of price fixing should be avoided.

Guess what.

Nearly all real estate brokers in my market areas charge nearly the same commission.
Nearly all appraisers in my market areas charge the same fee for a private estate appraisal.
Nearly all grocery stores charge the same for Campbell's Tomato Soup.
Nearly all gas stations charge the same for a gallon of gasoline.
Nearly all prostitutes charge the same fees (So I'm told).

Price fixing or what the market will tolerate?


Crying price fixing of AMC's in a down market sounds a little like sour grapes to me.

 

[hastalavista]

.
Nearly all prostitutes charge the same fees (So I'm told).

Richard,
We'd prefer verification via primary data source, please! :laugh: