Stop Accepting Unreasonable Fees

[J Grant]

Again, it’s a scale issue. Add appraisers to your panel only as fast as you can do so competently. Personal interviews are great, review of work samples (which was the norm in the 1980s and 1990s), monitor at intervals after they are on your panel. You don’t get a pass because it’s hard, takes time, costs money, and, well, we have 1,000s of appraisals to order. I mean, the sole jobs of an AMC is to manage appraisers.

The first point of contact most appraisers have with an AMC is a phone call from low level staff with minimal appraisal knowledge asking for turn time and fee. I have never had an initial AMC contact asking about qualifications, experience, or designation. I have had that experience that from private parties and local banks; in other words, from entities who had a vested interest in the appraisal.

The difference is that the lender is an end-user buyer of appraisals. The lender will use the appraisal to decide whether to lend on the subject property. Therefore, the lender wants the most competent and experienced appraisers for that purpose

The AMC is not an end user. The AMC is a third-party service that seeks to make as much $ as they can from each appraisal order they process /"manage" for their end-user lender customer. Of course it is a bonus if the AMC can get an expeirenced and competent appraiser to work for them, but that person might not get a lot of orders if they do not bid low enough.

The HUD bundleed fee was not intended to gouge big chunks of $ from a primary service fee to support an entire third party industry. The bundled fee was intended to cover minor misc add-on service charges.

 

[glenn walker]

Your the small town business and then Walmart shows up. The AMCs are the Walmart's and Amazons of the supply chain and your the guy that's sent to the property to inspect it and sign the appraisal.

Your signature and license is your value and your Signature sold at the most competitive lowest fee wins.

YOUR THE new Pharmacist the lower paid techs fill bottles and he's paid by Walgreens for his pharma licence and his signature.

 

[Surf Cat]

On the other hand, even if it was all paid by the lender, with no borrower reimbursement, I don't think that would change much about appraiser fees. It would just change who is looking at appraisers' fees so hard.

I believe it would change.... it would unfetter a transparent, separation of the appraiser fee and AMC fee. That in combination with "meaningful" enforcement of customary and reasonable fees and limits on undisclosed or unjustified AMC markups.

If the invoice shifted from the borrower to the lender, I believe the lender would be more picky with competency. Like the old days when you had to send in three sample reports to be added to the lender's approved appraiser roster.

Too late though.... the AI Genie has been let out of the bottle and it's not going back in....

 

[J Grant]

Your the small town business and then Walmart shows up. The AMCs are the Walmart's and Amazons of the supply chain and your the guy that's sent to the property to inspect it and sign the appraisal.

Your signature and license is your value and your Signature sold at the most competitive lowest fee wins.

YOUR THE new Pharmacist the lower paid techs fill bottles and he's paid by Walgreens for his pharma licence and his signature.

Vomit-worthy post (sorry )

An appraisal for a home with hundreds of thousands at stake on each loan, backed by US taxpayers, is not a cheap consumer purcahse.

And neither Amazon nor Walmart is like an AMC. They are providers/stores that offer products. A consumer is free to shop there or anywhere else.

 

[glenn walker]

Vomit-worthy post (sorry )

An appraisal for a home with hundreds of thousands at stake on each loan, backed by US taxpayers, is not a cheap consumer purcahse.

And neither Amazon nor Walmart is like an AMC. They are providers/stores that offer products. A consumer is free to shop there or anywhere else.

Your licence is a product whose signature is marketed just like any other commodity. The marketing is done by the AMCs and your signed up waiting for the orders.

 

[shrubberyvaluation]

I got an order due same day as assigned at 3pm, $400 after tech fees. I wish them luck finding someone to do that. yes this is for a full inspection and would have to get the homeowners to get you in same day and then do the report.

 

[DWiley]

The appraisal is for the lender, but it benefits the borrower in that (if an appraisal is needed), the borrower needs the appraisal to get the loan funded.

I don't see any difference in benefit to the borrower. They borrower needs the appraisal for the loan, and that means the borrower needs someone to order.
But, I would say it is actually the lender that needs the appraisal. It is the lender who is using the appraisal to manage collateral risk. The borrower already knows what they think it is worth.

It is interesting though how much you complain about the lender getting the AMCs' service "for free", but you never seem to acknowledge that they also get the appraisal for free as well through the same mechanism. And, they get the appraisal "for free" whether they use an AMC or not. If you really want to see market forces in play, make the lender pay for the appraisal and don't allow the direct pass through to the borrower.

 

[Joe Flacco]

Your licence is a product whose signature is marketed just like any other commodity. The marketing is done by the AMCs and your signed up waiting for the orders.

Why do you have nothing better to do?

Go find a friend and do something. At least Bert has Claude.

 

[J Grant]

I don't see any difference in benefit to the borrower. They borrower needs the appraisal for the loan, and that means the borrower needs someone to order.
But, I would say it is actually the lender that needs the appraisal. It is the lender who is using the appraisal to manage collateral risk. The borrower already knows what they think it is worth.

It is interesting though how much you complain about the lender getting the AMCs' service "for free", but you never seem to acknowledge that they also get the appraisal for free as well through the same mechanism. And, they get the appraisal "for free" whether they use an AMC or not. If you really want to see market forces in play, make the lender pay for the appraisal and don't allow the direct pass through to the borrower.

OK, I acknowledge the lender got the appraisal for "free," covered by the borrower. The lenders typically pay the appraiser the $ borrower paid amount as a C and R appraisal fee. So why would I complain aobu it?

It still leaves the same reality that when the lender uses an AMC, the lender ALSO gets free of cost to them AMC service, and the result of that is the appraiser nearly always gets paid a much lower appraiser fee, due to the AMC getting their profit by taking as much of the appraisal fee as it can, leaving the appraiser with a much smaller appraisal fee. THAT is the basis for the complaint.

I am not involved as a borrower or a lender, so I have no dog in the fight about who covers what....until it affects the appraiser's fee, and then the huge amount the AMC keeps by fee bidding/finding the cheapest fee appraiser impacts me. The AMC gets to keep such a large amount of the appraisal fee because of the deceptive practice of lenders not disclosing, upfront, that the borrower is covering the AMC fee and what amount that AMC fee is, ( and they should disclose it is based on bidding out the appraisal order to the cheapest fee appraiser fee the AMC can find.)

If you were a borrower, would you be happy to learn upfront when you applied for a loan that half your appraisal fee will go to an AMC who will find the cheapest fee appraiser they can? Naturally, borrowers would be appalled. That is why it has not been voluntarily disclosed to them upfront by lenders. That is why the AMC engagement letter emphatically states the appraiser is not to discuss or dislcose fees to the borrower.

 

[glenn walker]

Vomit-worthy post (sorry )

An appraisal for a home with hundreds of thousands at stake on each loan, backed by US taxpayers, is not a cheap consumer purcahse.

And neither Amazon nor Walmart is like an AMC. They are providers/stores that offer products. A consumer is free to shop there or anywhere else.

Real Estates a commodity and any good broker can give a fairly good CMA or BPO to establish a price to sell it and the mortgage and loan markets borrowers are consumers.

Your conflating loan risk versus how buyer's, sellers or the borrowers view the transaction and tax payers backing up defaults which isn't an appraiser issue.