Since when does the mortgage co determine the appraisal fee?

[Verne Hebert]

Got a call today from a borrower doing the leg work for the mortgage company (probably a so. cal lender).

We quote him a fee for an appraisal on 20 acres with house and three contributory structures.

He says, " the lender told me the appraisal would cost $ 300.00, why are you so high?

We told him to call around. He said he did and all the appraisers were about the same $ 550 to $ 625. He said he was going to tell the lender all the appraisers here were crooks.

I ask him what his origination fee was . He said 1 %. I told him "when you call the mortgage, make sure the mortgage company was only charging you 1/2 % origination fee. And by the way if you sell--tell the realtor you are only paying 3 %.

It gets old---the lenders and realtors determining our fees.

 

[Ross (CO)]

Verne, .....I do like your follow-up line to pose when mentioning origination fee and realtor's commission with someone razzing us about our measly scrapings for service ! I hope I can be quick of wit to remember that in a moment of need.

In winter of '02 I got call from a client's staffer who was following up with need to know if my license had been renewed following its Dec. 31st expiration. Fair question, did not mind it, and then faxed that requested license copy. Not having received any orders from them in about 6 months I asked him to put me through to the rep covering my state. A little chat, o.k......and by the way let me confirm with you the fees you have recorded for the standard report types you might ever order. (You know, that cheapest-appraiser shopping list they work off of) I had raised several fees by about $25 on Jan. 1st then.....and they now had that (new) number confirmed for their updated records. Lo and behold, it ends up I never got any orders from them through all of 2002. Today, March 4th, I get a faxed order. Well, Shazam ! What do you know. Oooops, what's this ? The 2055 Ext./Int. they have ordered is quoted as "Will pay: $_xxx_", and even $75 LESS than what they have known it to be. Nothing will stop them from attempting to coax one to accept LESS than what is firmly in THEIR records as your fee for a certain product. So, tomorrow I need to call them and remind them of what is needed, and ask they re-fax the order after making the correction. Probably best that I first set the appmt. with the h/o, and then be ready to state my expected 1-day turn-time for the client......so that I have something to CANCEL if they refuse to acknowledge what is a fair fee for the assignment. One must always be wary, for they will chop your fee in a heartbeat, if you are not on top of things.

 

[Mountain Man]

Yeap, that's so they can put the extra $75 on the HUD-1 and add it on top of the 1% origination profit.

 

[Ken in Arkansas]

I have a national client who updates my fee schedule fairly regularly. They advise what they will pay when they fax an appraisal request, always less than my base fee. I merely cross out their fee, write in my fee, "star" it, and fax the confirmation back. They have never questioned it.

 

[jtrotta]

Yep, we're the best there is and thats why you pay a premium, just like the gas yer now buyin fer $2.00 a gal - if they don't want ta pay, we don't play. Its real simple;

8)

 

[Farm Gal]

:lol: :lol:
:?
8O
:evil:

Just got off the phone with the SECOND rep from a certain national firm for whom we very gratefully did some discounted business back in a dark time when our then major cleint 'went away' with no warning.... Nothing like bills due and baby on the way to change your attitude about what constitutes an unacceptable fee structure!

Having rebuilt and diversified considerably, no more eggs in one basket around HERE... our fees became incompatible with those offered by this firm. Slowly decreaseing over about 8 years we received no orders from tham last year at all.

Nice young lady asked quote and turn time on a property which on a surface glance given address and estmated value appears to need a thorough review, and in all likelihood an appraisal.

So having quoted my fee knowing full well I would not get the order, it was no surprise that nothing spit out the fax.

This morning an intense young man called desirous of removing our 'suspended' status with same company, and desiring us to quote fee and turn time on said same property/appraisal review. Upon being informed that our fee structure for such work to our regular clients is thier offer x 2.5, he was appalled as he "had been fully prepared to offer as much as 2X their 'regular fee' " Trying REAL hard not to get sarcastic I informed him that based on the minimal information I had as to address, and value as per the appraisal to be reivewed, that I was unwilling to decrease my fee as I knew that the likelihood was that I wold be losing money doing this work. I also had no great particular desire to be placed back on a roster for insultingly low orders!

He was near incensed, and I felt I was doing quite well not to snap at the twit. Such is becoming the way of the biz, but the point that I will wryly attempt to make is that the individuals accepting the WAY low fees obviously cannot stay alive, nor produce quality work since even the most fee sensitive AMCs still call and ask us to take on jobs in this area where MOST of my competition is larger shops and moonlighting state employees...seems that they also know what it costs to saty in business!

This is a good thing, I think :?

Doubt I am going to get the order though, OR should I have discounted it the 10% which would have split the difference?
-think
think-
think...
Naaaahh! :wink:

 

[Leon Stewart]

I have a national client who updates my fee schedule fairly regularly. They advise what they will pay when they fax an appraisal request, always less than my base fee. I merely cross out their fee, write in my fee, "star" it, and fax the confirmation back. They have never questioned it.

That may work in your case, but in many cases the Lender will shop the market for a better price. As long as the Lender controls the Work he can control the Fee. He may have some difficulty in a market where there are few Appraisers, but in the larger market the lender is in control and they usually play one Appraiser off against the other. For the most part they will always be able to find an appraiser to do it for less, and quality is not as much of a factor as some Appraisers make it out to be.

leon

 

[Karl]

The lender can only control the FEE as long as there are Appraisers willing to work for minimal pay. IF it REALLY was so easy to do loans without an Appraisal as some believe Then that MIGHT be true. However due to the overload of work that MOST seem to have I'd say WE CONTROL, just that there are a FEW Appraisers that can't seem to figure TRUE COST TO OPERATE. & SHARP Loan Officers that SAY I can get it done cheaper & some Appraisers get NERVOUS say OK I say Great I wanted to go riding anyway so PLEASE give it to the cheaper one. I haven't gotten to ride during the week inpast 4 months.

 

[Leon Stewart]

Karl:

You have to keep one thing in mind, there are a significant (mostly all) number of appraisers who will work for sub fee, that's how the AMC's came into being. It is true that the work has increased because of the low Interest Rates, but the reason a few Appraisers are overloaded with work is that many Lenders are trying to use the same Appraiser(s). This is verifiable by the decrease or the lack of increase in the number of licensed/certified appraisers in recent years.

In otherwords most appraisers are not overloaded, because they don't do the type of work the lender needs to close their loans. There wouldn't be a shortage of appraisers if the work was distributed equally, then again the lender would not be able to close all the deals he processes, but they wouldn't have to wait on a 3 or 4 week turn time either.

In the end I think they would make more money and close more loans, because if they reduced their turn time, say, to 1 week, over a 12 month period they would close significantly more loans, consequently increasing their bottom line at the same rate as the decline in the turn time. But the lenders have a narrow mentality, and is only concerned with the deals that don't fly, rather than showing a concern for the increase in the deals that do fly.

leon