The Appraiser Shortage Myth Part 43

[Deleted member 130081]

Fair enough. I thought I hit them and you thought I missed them (or played them second fiddle).

But if the AMC margins are what is squeezing out the funds necessary to support appraiser training, then the cost-plus model (something I'm in favor of) should take that off the table.
Yet, many are still say that won't solve the problem because there are still plenty of appraisers taking low fees regardless of what the AMC makes or loses; their solution is some kind of across-the-board fee increase and that will solve the problem. I don't see why it would? If I get an extra $100 in my pocket for not doing anything differently, why would I do anything differently (like training)? I wouldn't.
But if fees, due to demand, went up to $600+, as an entrepreneur, I'd certainly consider the options of expanding my firm and growing it.

Anyway, at least I think this thread is back on track (and I'll take my share of the blame for derailing it to whatever degree I did).

I don't think this thread is getting derailed. I think there are complexities and other forces at work, even if I did say the answer was simple. I do think the answer is mostly simple and I do think the fees are the simple answer. However, I still take stock in the other points made by yourself and others. (Can I do that? I don't vote all Republican or all Democrat either, or even vote at all sometimes for that matter.)

LOL. Now wait a second, I think you may contradict yourself a bit there (I say that right after I say not everything is black and white right?). You say you don't think extra fees across the board will change anything, but then go on to say higher fees would spur the entrepreneur in you!?!? LOL. So which is it? Or is it a matter of an extra hundred instead of an extra few hundred you base that on?

I completely support the cost plus model. I also think the admin fee for appraisal management should be reported as a separate line item in the closing statement.

 

[hastalavista]

LOL. Now wait a second, I think you may contradict yourself a bit there (I say that right after I say not everything is black and white right?). You say you don't think extra fees across the board will change anything, but then go on to say higher fees would spur the entrepreneur in you!?!? LOL. So which is it? Or is it a matter of an extra hundred instead of an extra few hundred you base that on?

No contradiction.
$100 additional wouldn't incent me to train new appraisers. I referenced that as some mandatory fee that resulted in the increase.
What would incent me to train new appraisers is if there was an imbalance in the supply which (in the COW states) creates a sufficient fee to cover the training costs; where there is an imbalance, I'd want to grow my firm because I can gain market share.

To word this another way:
A. Nothing changes except a mandate that all appraisal fees go up $100. Why train in this scenario? Volume hasn't changed; growing market share is possible but not ideal. I do nothing and I make an extra $100.
B. Demand for services go up and (as in the COW states) fees go up. A good reason to train in this scenario assuming the demand is relatively sustainable. Now I have the funds to train and by training appraisers, I can grow my market/share firm-size because there is excess demand. Growing market share is ideal in this environment. I do something and I increase the volume that my firm can handle.

 

[Evincere]

I personally have no problem with cost plus. Most AMCs don't either. But shifting to such a model would not solve the problem that so many appraisers perceive to exist.

Would doing so solve just one? Or is throeing the baby out with the bath water an excuse to do nothing because other problems exist. Fees, cost plus, transparancy, segration of fees are all tied up in ONE issue. Whereas others such as TAT etc are differentiated by each AMC

 

[TRESinc]

Well before you go about spouting about how high fees are in COW states today you should at least find out what their fees were 4 years ago. I can tell you, save the rushes or complex properties, they are not that much higher today.

if that's the case then there should be a plethora of trainees in the COW states if their fees have been relatively stable for 4 years and are in the 4 figure range.

 

[Terrel L. Shields]

How many AMCs use the term "partner" or "appraiser partner"?

C and R is a JOKE that idiots wrote into a law that is not enforceable to appease someone.

The AMC model does not work for appraisers, and appraisers are finally getting around realizing that.

Truisms

Supply and demand.
Big selling point in 1992. Licensing prevents the supply of amateurs and part-timers from cashing in on the bonanza of demand created by FIRREA. Boom in housing created demand but strangely a huge supply of appraiser appeared contrary to licensing goals to restraint the supply. So add to ed and hours to restrain supply and now demand up locally, expecting survivors to create new supply of appraisers to meet demand and commit suicide.

 

[The Warrior Monk]

Truisms

Supply and demand.
Big selling point in 1992. Licensing prevents the supply of amateurs and part-timers from cashing in on the bonanza of demand created by FIRREA. Boom in housing created demand but strangely a huge supply of appraiser appeared contrary to licensing goals to restraint the supply. So add to ed and hours to restrain supply and now demand up locally, expecting survivors to create new supply of appraisers to meet demand and commit suicide.

There essentially was no restraint in the mid-1990s...part-timers, clueless form-fillers, etc. could easily get into the business. Not so much not with the change in the licensing requirements and level of scrutiny by lending clients.

 

[Deleted member 130081]

I personally have no problem with cost plus. Most AMCs don't either. But shifting to such a model would not solve the problem that so many appraisers perceive to exist.

That's because AMCs will continue to award assignments based on fee right? I mean hey, maybe you wont make money by skimming anymore, but you can generate more business by providing the lowest cost appraiser right? And if you can provide the lowest cost appraiser, you can charge more for the "plus" right? Everyone wants a cheaper appraisal D. Appraisers just want a reason to appraise instead of a mindless job for the same money. I know of zero people who as kids said they wanted to be an appraiser when they grow up.

 

[Terrel L. Shields]

Not so much not with the change in the licensing requirements and level of scrutiny by lending clients.

We were tested, hours required, the old broker-appraiser system was broken.

 

[Deleted member 130081]

No contradiction.
$100 additional wouldn't incent me to train new appraisers. I referenced that as some mandatory fee that resulted in the increase.
What would incent me to train new appraisers is if there was an imbalance in the supply which (in the COW states) creates a sufficient fee to cover the training costs; where there is an imbalance, I'd want to grow my firm because I can gain market share.

To word this another way:
A. Nothing changes except a mandate that all appraisal fees go up $100. Why train in this scenario? Volume hasn't changed; growing market share is possible but not ideal. I do nothing and I make an extra $100.
B. Demand for services go up and (as in the COW states) fees go up. A good reason to train in this scenario assuming the demand is relatively sustainable. Now I have the funds to train and by training appraisers, I can grow my market/share firm-size because there is excess demand. Growing market share is ideal in this environment. I do something and I increase the volume that my firm can handle.

K. So you would not hire a trainee unless you were in a market with a current shortage or at least a market that was not so over-supplied that you could increase your market share. Sounds like a sound plan. A completely economic one too. See, this thread is not off-track.

 

[Deleted member 130081]

Bring on the shortage.