Verifying Sales

[Elliott]

Mark,
I would imagine NLC's company pays $500 or $600 for each appraisal. I would also imagine that the AMCs pay $200 to $300 to appraisers. Their national AMCs have found the lowest priced appraisers they can find.

 

[NLCApprMgr]

I asked you in the previous thread what AMC your company utilizes and you failed to respond. Is there a reason you don't want anyone to know? The AMC may have nothing to do with the facts or it may have everything to do with them. You really can't complain if you utilize the services of some AMC that broadcasts orders to the person who will get the report done the fastest for the lowest amount of money. Lenders are the ones that are ultimately responsible for the appraiser selection if they use an AMC or if they don't. When I got a roof put on my house I read reviews and I didn't go with the lowest cost (or even the second or third lowest). When I had some trees cut down this fall I did the same, I paid almost double the price of my lowest quote. People can claim what a person is paid should have no affect on quality and all I can say is hogwash! Nothing in the real world works that way, you pay cut rate fees you can darn well expect a cut in quality somewhere, and this holds true if it is fast food compared to fine dining or the selection of an Attorney. If you ever NEED an attorney are you going to get the cheapest one you can find and expect them to be as good as the high paid ones? Again I ask you what AMC does your company use?

We use eight AMCs and the VA Portal. No, I am not going to name them. I inherited them, and have not had enough experience to cast aspersions or drape praise on any of them. I will say this...the level of competency expressed in the reports I have reviewed only vary minutely between the AMC and VA appraisers. VA appraisers have ten business days to complete the appraisal, and based on my reviews and comparison, giving the AMC appraiser more time does not relate to a better quality appraisal. VA appraisers also quote their own fees for VA 1004's; so throwing more money into the process also provides no greater bang for the buck.

 

[Joe Flacco]

I have a question.

Do you think if you paid a reasonable fee for the work expected and allowed the appraiser to determine their schedule for completion rather than dictate the fee and turn time as a condition of earning a living that you would be here complaining about quality?

I think he would have to seek out the appraisers that are already doing the work he is expecting. Just raising the fee to the same panel of appraisers will not yield better quality appraisals. Raising the fee paid to a fast and cheap panel of appraisers will result in the same poor quality appraisal reports.

 

[ImDionysis]

"In my last thread, I got an earful from appraisers about how money makes the mare go, that I get what I pay for, etc."

Well, this is partially true and partially false. The quality of the 'appraisal' should not be determined by the fee and turn time; however, the quality of the 'appraiser' is determined by the fee and turn time. You get 'who' you pay for. If you pay crap for a fee, you get a crappy appraiser that will give you a crappy appraisal.

 

[JTip]

I think he would have to seek out the appraisers that are already doing the work he is expecting. Just raising the fee to the same panel of appraisers will not yield better quality appraisals. Raising the fee paid to a fast and cheap panel of appraisers will result in the same poor quality appraisal reports.

The problem is the assignment conditions vs. the fee.

I remember SL (it has been 4-5 years) had an order sheet that was 14 pages. The relationship didn't last long after the fees were 'renegotiated' without my consent......

You want quality? Spell it out in the order. "Original comp/listing photos required, PERIOD" "Sales verified with parties involved required"

You start tacking on assignment conditions next to a small fee and you will get crap because the smart appraisers will pass everytime.

 

[Michigan CG]

..........You get 'who' you pay for. If you pay crap for a fee, you get a crappy appraiser that will give you a crappy appraisal.

Not necessarily true. Throwing more money at some appraisers does not good in that they don't have a clue as to what they are doing in the beginning.

I asked you in the previous thread what AMC your company utilizes and you failed to respond. Is there a reason you don't want anyone to know? The AMC may have nothing to do with the facts or it may have everything to do with them..........

The name of the AMC is of little consequence, none of them ask for verification in the true sense of what the OP is accustomed to, AMCs just want to make sure everything is bracketed and all the boxes are checked correctly.

I have almost no respect for Chief Appraisers and this is one of the reasons. Why did the comparable that sold at $215k get used without verification of the sale. The OP talked to a broker for 15 minutes, why didn't the original appraiser? Because the original appraiser was lazy.

You cannot blame it on fee, the appraiser agreed to do a job and do it right. If he was not going to do it correctly he should have turned down the assignment whether it paid $100 or $1,000. The excuse of you get what you pay for is HOGWASH.

If I were the OP I would contact the AMC and tell them they are not providing the service the profess to and tell them to get a new appraisal on their dime.

 

[NEINAPPR]

We use eight AMCs and the VA Portal. No, I am not going to name them. I inherited them, and have not had enough experience to cast aspersions or drape praise on any of them. I will say this...the level of competency expressed in the reports I have reviewed only vary minutely between the AMC and VA appraisers. VA appraisers have ten business days to complete the appraisal, and based on my reviews and comparison, giving the AMC appraiser more time does not relate to a better quality appraisal. VA appraisers also quote their own fees for VA 1004's; so throwing more money into the process also provides no greater bang for the buck.

The reason I ask is because the AMC you use is an integral part of determining the quality of the report you get in return. I get these low priced offers with fast turn times every single day of the week from the same big AMC's. I counter with an increased fee (usually still lower than it should be) and a reasonable amount of time to complete it (usually one week turn time) and I rarely ever get them unless they are in areas that the churn and burn guys don't want to go to. I have several other AMC's who I work with who never try to get me to work cheap and always give at least 7 day turn times. I never have to haggle with them in regards to fees, if I say it is a complex property for whatever reason and I need $xx more and 2 extra days, 99% of the time that is fine. The big AMC's send the majority of their work to the same people over and over because they meet the minimum standards that they deem acceptable and they work cheap and fact. This is a fact, not an opinion. If you have numerous appraisals coming out of a certain area and you use a certain AMC in that area check and see how many of those reports are from the same one or two appraisers. If the AMC is paying an appraiser $225 to complete the report do you honestly think they are going to send an email to a listing agent, take the return call and discuss the property for 15 minutes? Not gonna happen in the real world. Like everyone says the fee should not matter and the appraiser should always do their best job, but the reality is that the better appraisers won't take the order in the first place because the fee is too low to start with.

 

[timd354]

We use eight AMCs and the VA Portal. No, I am not going to name them. I inherited them, and have not had enough experience to cast aspersions or drape praise on any of them. I will say this...the level of competency expressed in the reports I have reviewed only vary minutely between the AMC and VA appraisers. VA appraisers have ten business days to complete the appraisal, and based on my reviews and comparison, giving the AMC appraiser more time does not relate to a better quality appraisal. VA appraisers also quote their own fees for VA 1004's; so throwing more money into the process also provides no greater bang for the buck.

You had better put on a hard hat and duck...I can't wait to see the responses that come as a result of this post.

BTW, I am the Chief Appraiser at a secondary market participant and have been unable to discern any meaningful overall difference in quality between AMC and non-AMC produced appraisals.

 

[Joe Flacco]

The problem is the assignment conditions vs. the fee.

I remember SL (it has been 4-5 years) had an order sheet that was 14 pages. The relationship didn't last long after the fees were 'renegotiated' without my consent......

You want quality? Spell it out in the order. "Original comp/listing photos required, PERIOD" "Sales verified with parties involved required"

You start tacking on assignment conditions next to a small fee and you will get crap because the smart appraisers will pass everytime.

Yeah, of course. You have to seek out the appraisers that are already doing the work he is expecting and pay whatever that appraisers fee is.

 

[mark hurlock]

I think he would have to seek out the appraisers that are already doing the work he is expecting. Just raising the fee to the same panel of appraisers will not yield better quality appraisals. Raising the fee paid to a fast and cheap panel of appraisers will result in the same poor quality appraisal reports.

But wouldn't paying a reasonable fee to the good appraisers keep them from leaving the profession?

If you force quality appraisers out of business by justifying low fees, all you will have left is poor quality.