We're Back To The Beginning

[J Grant]

Again, explain why title lawyers, surveyors, and credit services are not discounted like appraisers nor do they operate under an Management Company.
Explain why banks with less work are not dropping their fees, lowering their prices, reducing application fees?
What is good for the goose is good for the gander....why are only appraisers slaves to the "supply and demand" model?

Exactly. A segment of posters claim "some appraisers don't understand supply and demand". We understand it, but they fail to understand, or want to consider, the specific way s/d is different in the AMC model vs the rest of the business/professions ,including the rest of appraisal work outside the AMC model. Imo, comparing the AMC impact on fees is not comparable to commercial appraiser fee issues/ bidding on RIMS ( which has its own threads on commercial section)

It's absurd to bring up 3 COW states as the ( rare ) example of supply/demand working with AMC;s. It has not worked in a normal fashion since in the COW states, whether due to the # of appraisers /other the supply of appraisers was not sufficient to get the work done in a timely manner ; the resulting fulfillment delays sent lenders and AMCs's into an uproar. They used those delays and what was in some instances fee gouging by appraisers to successfully lobby for regulatory changes that helped their interests and hurt appraiser interests.

If in 10 years, only 3 lower population states have seen any leverage due to s/d on AMC fees and that came with a host of harmful issues, one would think appraisers would recognize that.

 

[TRESinc]

That's really silly because appraisals would never be bid on ebay or similar for lender work. Lenders charge a certain rate for appraisals and for title and for other services. They are not going to hold up a loan or lose a customer when applying to hold a ridiculous auction to get a service cheaper.

i can easily see that happening. how many times have we heard about appraisers not accepting an order within 24 hours, or at all? some have posted on here they do it out of spite! 24 hours is plenty of time to hold a bid.

Going forward, what might impact fees more would be if technology becomes accepted as an alternative and/or hybrids. But for quality appraisals themselves, probably not ...but one never knows. Oddly enough AVM alone (tech ) are no longer allowed for lender work thus the "desktop"...which does not pay much but if provides an additional income stream, could be one avenue of work that was not there prior. Low fees for a desktop sitting at computer makes more sense than the more involved appraisal. Desktops still are an appraisal but so limited and rote it's hard to think of them that way,.

so now, in your opinion, desktops are a viable alternative? 180 much?

Exactly. A segment of posters claim "some appraisers don't understand supply and demand". We understand it, but they fail to understand, or want to consider, the specific way s/d is different in the AMC model vs the rest of the business/professions ,including the rest of appraisal work outside the AMC model. Imo, comparing the AMC impact on fees is not comparable to commercial appraiser fee issues/ bidding on RIMS ( which has its own threads on commercial section)

how many appraisers are in your market? now tell us how many title companies. you can't compare apples to oranges and expect believable results.

 

[George Hatch]

Exactly. A segment of posters claim "some appraisers don't understand supply and demand". We understand it, but they fail to understand, or want to consider, the specific way s/d is different in the AMC model vs the rest of the business/professions ,including the rest of appraisal work outside the AMC model. Imo, comparing the AMC impact on fees is not comparable to commercial appraiser fee issues/ bidding on RIMS ( which has its own threads on commercial section)

It's absurd to bring up 3 COW states as the ( rare ) example of supply/demand working with AMC;s. It has not worked in a normal fashion since in the COW states, whether due to the # of appraisers /other the supply of appraisers was not sufficient to get the work done in a timely manner ; the resulting fulfillment delays sent lenders and AMCs's into an uproar. They used those delays and what was in some instances fee gouging by appraisers to successfully lobby for regulatory changes that helped their interests and hurt appraiser interests.

If in 10 years, only 3 lower population states have seen any leverage due to s/d on AMC fees and that came with a host of harmful issues, one would think appraisers would recognize that.

There's nothing absurd about noting that a shortage of appraisers - even if just temporarily - has the opposite result of an excess of appraisers. Or to phrase it in supply terms (which is the same thing), that an excess in demand will have the opposite result of a shortage of demand.

It's apparent the demand for full appraisals is going to decline for a while at some point in the next few years - whether it occurs later rather than sooner doesn't matter. If appraisers aren't working their plan for that environment right now they're putting themselves at a disadvantage. Thunderdome is on its way and some appraisers aren't going to make it.

 

[J Grant]

There's nothing absurd about noting that a shortage of appraisers - even if just temporarily - has the opposite result of an excess of appraisers. Or to phrase it in supply terms (which is the same thing), that an excess in demand will have the opposite result of a shortage of demand.

It's apparent the demand for full appraisals is going to decline for a while at some point in the next few years - whether it occurs later rather than sooner doesn't matter. If appraisers aren't working their plan for that environment right now they're putting themselves at a disadvantage. Thunderdome is on its way and some appraisers aren't going to make it.

If within a few years/ less there is a substantial reduction of full appraisals ordered for res lending, appraisers on cusp of retirement will exit sooner rather than later, or scale back to part time. Imo the mid career appraisers will be most affected. Any young people native enough to be entering for res licence should be going in with low expectations...hope it is not too dire but I agree better to be prepared.

Back to the COW states, it is telling, that in the decade post HVCC out of the lower 48 states, only 3 low population states managed recently to get higher fees from AMC;s due to a shortage of appraisers . Don't forget with that came delays in turn time and difficulty in getting assignments filled, which sent lenders and AMC;s into panic mode

For that reason, a shortage of appraisers is not the answer . And also the reason why in nearly every profession, there is an ample supply to over supply of professionals, because customers and clients need service done in a timely manner. In the majority of professions, it does not take a shortage of professionals to get C and R /decent fees, nor does it need a shortage in appraising either , outside of AMC work.

Many AMCs do use a supply of appraisers in a Thunder dome like manner, as explained numerous times ( their market share, model of compensation etc)

Historically, there have been slow and busy cycles in lending work, but slow times never meant lower fees till the AMC's came along . When there is less volume appraisers need more $ per order to survive, but the AMC;s who use a slow cycle to drive down fees even further is one of the reasons appraisers have animosity toward them. Direct lenders now don't reduce/solicit lower fees when volume drops, and mortgage brokers back in the day never did it either.

If they hit a seasonal or other slow period, professionals usually don't lower heir fees, rather they may offer a coupon or add on service or the like, but they don't lower and raise their fees up and down like a yo yo. They ride it out till the busy season picks up.

 

[Terrel L. Shields]

Your future

 

[George Hatch]

If within a few years/ less there is a substantial reduction of full appraisals ordered for res lending, appraisers on cusp of retirement will exit sooner rather than later, or scale back to part time. Imo the mid career appraisers will be most affected. Any young people native enough to be entering for res licence should be going in with low expectations...hope it is not too dire but I agree better to be prepared.

Back to the COW states, it is telling, that in the decade post HVCC out of the lower 48 states, only 3 low population states managed recently to get higher fees from AMC;s due to a shortage of appraisers . Don't forget with that came delays in turn time and difficulty in getting assignments filled, which sent lenders and AMC;s into panic mode

For that reason, a shortage of appraisers is not the answer . And also the reason why in nearly every profession, there is an ample supply to over supply of professionals, because customers and clients need service done in a timely manner. In the majority of professions, it does not take a shortage of professionals to get C and R /decent fees, nor does it need a shortage in appraising either , outside of AMC work.

Many AMCs do use a supply of appraisers in a Thunder dome like manner, as explained numerous times ( their market share, model of compensation etc)

Historically, there have been slow and busy cycles in lending work, but slow times never meant lower fees till the AMC's came along . When there is less volume appraisers need more $ per order to survive, but the AMC;s who use a slow cycle to drive down fees even further is one of the reasons appraisers have animosity toward them. Direct lenders now don't reduce/solicit lower fees when volume drops, and mortgage brokers back in the day never did it either.

If they hit a seasonal or other slow period, professionals usually don't lower heir fees, rather they may offer a coupon or add on service or the like, but they don't lower and raise their fees up and down like a yo yo. They ride it out till the busy season picks up.

The market for commodities futures has a lot of price volatility *because* of the efficiency Wall Street brings to it. They've aggregated both ends of the transactions. The market for appraisal services won't get that far but it does have the potential for a lot more volatility that we've seen so far.


Think about it - if a dozen AMCs cumulatively cornered 30% of the market and between them they had more orders in the last week of the month we could see higher prices for that week and lower prices prevailing on the other days of the month. It could vary from region to region on almost a daily basis. You could end up getting $400/per on the last week of the month and $300 during the other three when your competition wasn't as busy.

 

[Evincere]

Your future

IF certain contingencies have there way and their covert activities Aren’t brought to the light of day

 

[J Grant]

The market for commodities futures has a lot of price volatility *because* of the efficiency Wall Street brings to it. They've aggregated both ends of the transactions. The market for appraisal services won't get that far but it does have the potential for a lot more volatility that we've seen so far.


Think about it - if a dozen AMCs cumulatively cornered 30% of the market and between them they had more orders in the last week of the month we could see higher prices for that week and lower prices prevailing on the other days of the month. It could vary from region to region on almost a daily basis. You could end up getting $400/per on the last week of the month and $300 during the other three when your competition wasn't as busy.

That kind of volatility is unsustainable way to do business for appraisers.

Commodities futures are a price sensitive product on international / Wall ST exchange, and has nothing to do with a narrow market of dinky appraisal fee differences making up an individual's career. Is this a joke, comparing Wall ST billion dollar commodores trades to AMC's exploiting appraisers desperation in small fee differences to make a buck . At some point there will be a class action suit bought forth by appraisers just needs the right atty to work on it.

 

[George Hatch]

I think if Phil stopped to consider why the AI isn't participating on the boards at TAF and why they have backed efforts to include other standards of professional practice besides USPAP he might not be so quick to take them at their word for why they might advocate for suspending USPAP for evals.

Only an idiot actually thinks USPAP compliance significantly undermines the ability of an appraiser to compete with a non-appraiser on an eval assignment. I may be wrong about them, but I never thought of the brain trust over at the AI as consisting of a bunch of idiots.

 

[George Hatch]

That kind of volatility is unsustainable way to do business for appraisers.

Commodities futures are a price sensitive product on international / Wall ST exchange, and has nothing to do with a narrow market of dinky appraisal fee differences making up an individual's career. Is this a joke, comparing Wall ST billion dollar commodores trades to AMC's exploiting appraisers desperation in small fee differences to make a buck . At some point there will be a class action suit bought forth by appraisers just needs the right atty to work on it.

Whether appraisers think a volatile fee environment is sustainable or not is immaterial. It's the same thing as the farmers who have to deal with pricing volatility in their markets - their preferences are irrelevant.

As for appraisers funding the legal team it would take to force the lenders to pay C&R, a little "what if"
arithmetic should be all it takes to dispel that idea. There aren't enough appraisers out there to buy the politicians it would take to make that happen.