The $275 1004

[Skeletor]

The accepting party very likely is not even competent to appraise an historic home. There is only one historic district in the area I cover, and I wouldn't accept one last year. I just have no experience doing them. I did research it a little bit--lots of special considerations that can affect value.

So we have someone either:
A) violating USPAP and possibly state law as well by accepting an assignment they have no competency in, and/or
B) someone who is so desperate for work they are willing to essentially work for half price, and/or
C) someone who has runners inspect, and a firm in India type in the report, complete with 100% boilerplate in the important areas, so they still actually are making a few $$.

Yeah, sure sounds like an appraiser shortage to me...more like a common sense and/or ethical shortage.

Thanks Overimprovement. My thoughts exactly. Wanted to share this with all of you so you can see just what I'm up against down here.

 

[chad hampton]

A lot of these low fees are driven by the large nationwide appraisal mills. Most have a corporate policy to accept any job and any fee. They really don't care about the fee, cause the owner gets 60% and 60% of $275 for doing nothing is still better than 60% of $0. The same amount of work is required for both.

That business model drives the profession to the bottom. If these firms were led by legit business professionals, they would be to leading the charge for a C&R fee.

 

[Evincere]

Thanks Overimprovement. My thoughts exactly. Wanted to share this with all of you so you can see just what I'm up against down here.

Not just where you are...Single Source orders are probably, at best $250 across the nation. I’ve never completed one for them but as a matter of curosity I have seen their 1004s offered for $200.

 

[Digger88]

Yesterday, I received an email from SingleSource indicating that there is an open order. I parted ways with SingleSource well over a year ago but will do an appraisal for them every once in a while, e.g., I've only prepared two appraisals for them this year. Anyway, I logged in to their system and took a look at the order.

This was a 1004 request for PMI removal. The subject was a historic home located in a historic district, one in which I am very competent in appraising. No surprise - the fee was $275 which is par for the course with this particular bottom feeding AMC. I quoted $450 which is a little lower than what I normally quote on a historic home but what the heck I knew I wouldn't get the order anyway. When I submitted the quote, the order was no longer available. Now there is only one reason why I would get that message - another appraiser accepted the order. Let's break this down:

Revenue - $275
Op Exp Ratio - 45% (about my average currently before S-Corp salary, etc.)
NOI - $151
S-Corp Tax - no less than 20%
EAT = $121 (before FICA/SS, etc.)

Let's assume about 1 hour for the inspection plus 2 to 3 hours report writing. That $121 works out to $30 to $40 per hour.

So let me get this straight comrades. With all of the education and training and the high maintenance relationships we have with these loser AMCs, together with the time and stress to manage a business, $30 to $40 per hour is an acceptable economic incentive? No wonder we can't attract new talent into this business.

EDIT: Yes my friends 2-3 report writing time is optimistic I know this. For argument's sake let's just assume that you are kicking some serious azz on this particular assignment and juiced up to the max with coffee and methamphetamine.

beats the $230 1004/REO i get all the time.

 

[Overimprovement]

A lot of these low fees are driven by the large nationwide appraisal mills. Most have a corporate policy to accept any job and any fee. They really don't care about the fee, cause the owner gets 60% and 60% of $275 for doing nothing is still better than 60% of $0. The same amount of work is required for both.

That business model drives the profession to the bottom. If these firms were led by legit business professionals, they would be to leading the charge for a C&R fee.

I've not seen this business model much (that I know of) in my area. Do you know some of the players? (not that I want to join of course, just like to know my enemy as it were.

What I see a lot more of are AMCs/lenders with in-house appraisers who take all the easy stuff, and only the lakefront log cabins 30 miles out on 150 acres are the ones that get bid out.

 

[chad hampton]

Yes, staff appraisers for AMCs are also a problem. AMC's should not be permitted to have staff appraisers for anything beyond reviews. Their only purpose on this earth is to be a middle man. Having employees acting as field appraisers is a joke. IMO, you can't be independent and also be an employee.

I know someone who managed several branches of one of the large nationwide appraiser firms (they are all the same, I won't name which one). He tried to get the fees increased at some of their clients and when he told the company owners what he was doing, they made it very clear to him that he was to accept every job that came across his desk at whatever fee they had on the order. His job was to find an appraiser to do the GD thing. Verbatim.

He quit after about 6 months when he couldn't find any appraiser to work for what amounted to $80-$120 per assignment.

 

[Salty]

These are the last 4 Clear Crapital 1004 requests I have received: $268, $289, $280, $261 These low fees are not new and are common among the AMC's that solicit my services. In my area, you either accept these fees, find non-lender work, or search for additional sources of income. I researched every one of these properties and not one was a slam-dunk report.

 

[Overimprovement]

One does have to wonder how this business model finds enough 'participants' to continue to flourish, especially during the good times, when there is a lot of work.

Who is registered with the actual AMCs from these mills--the $100 appraiser, or the branch manager? Are the $100 appraisers that are doing these reports trainees, or certified who have relegated themselves to being staff (but without the benefits)? If they are certified themselves, does the branch manager have to still sign every one as supervisor?

Just not familiar with these at all--sorry if I am sounding ignorant.

 

[Skeletor]

Just not familiar with these at all--sorry if I am sounding ignorant.

If you are ignorant then so am I. That's why I posted this thread. I want to know who is appraising at these fees. Cmon forum! I know one of you in here is hiding!! Come out come out wherever you are!

 

[TRESinc]

I don't believe your numbers but most appraisers would jump at a chance of making $40/Hr or $80,000/yr. That's more than 90% of what most appraiser's make.

and that $80k is AFTER taxes are paid...