Working RE on The Great Debate on Appraisal Fees

[Dublin ohio]

Most people I know look at every line of the HUD1 and ask questions about every part they are paying

So they question it. How many of the people you know negotiated the fees successfully.

 

[Terrel L. Shields]

but it's also not 10% of the billings.

It very well could be. My expenses normally ran about 30% of the revenue I generated and approached 50% when mileage, office rents (when i did rent), help, E & O, depreciation were all included. And I have never typed a report on a laptop. Always a desktop computer. And between scanner, printer, copier, computer, monitor, and uninterruptable power supply, I've rarely had a year one of the other needed replaced.

 

[George Hatch]

The point remains that there has always been a significant margin attributable to business development and maintenance whether it is accruing to a fee appraiser developing that relationship or accruing to a fee shop, AMC or lender appraisal dept.

The fee at the wholesale level has NEVER been equal to the fee at the retail level.

 

[Mejappz]

It very well could be. My expenses normally ran about 30% of the revenue I generated and approached 50% when mileage, office rents (when i did rent), help, E & O, depreciation were all included. And I have never typed a report on a laptop. Always a desktop computer. And between scanner, printer, copier, computer, monitor, and uninterruptable power supply, I've rarely had a year one of the other needed replaced.

Not to mention the burden of "continuing education" and licensing fees, which are becoming excessive. For example, the useless USPAP course is up to $250-$300.00 This year, I’m facing over $1,000 in these unnecessary costs. This situation violates Florida state law, which requires a special hearing if costs exceed $200,000 for small businesses.

 

[George Hatch]

The state can proceed with the hearing and the result will be the same. You will still be required to accrue an avg of 14/hrs a year of CE and none of those hours will be free.

McKissock is offering 2yrs of CE inclusive of the USPAP course and ebook for $699 ($350/yr). That's not bad for 28 hours of CE.

 

[J Grant]

The point remains that there has always been a significant margin attributable to business development and maintenance whether it is accruing to a fee appraiser developing that relationship or accruing to a fee shop, AMC or lender appraisal dept.

The fee at the wholesale level has NEVER been equal to the fee at the retail level.

Not correct - at least for GSE lender mortgage work .

The retail fee is the same as the wholesale fee when a lender does not use an AMC.

When a lender uses an AMC, the AMC, as a middleman, takes a split of the browser-paid fee.

It is not the same thing as compared to appraisers who used to work at a fee appraiser shop ( I wrote used to work because that model was driven out by the AMC 'sand a fee shop on the res side rarely exists now - it is still survives in the commercial end)

I worked at two different res fee shops back in the day, and the owner never made appraisers under bid each other to get a job!( which is what AMC;s do ).

The appraisers with more experience got a higher fee split -often as high as 70% and usually had first pick at orders. They were valued, and the owners wanted to keep them. All the appraisers got the following benefits in exchange for working on a fee split" software or MLS paid, a shared secretary who made appointments/did admin, and a senior appraiser to review the work and be there to ask questions. The appraisers who were trainees got training. In addition, there was a camaraderie and a bit of fun, and other appraisers to bounce ideas and problems off.

.

 

[Tiffany Gibbons]

So they question it. How many of the people you know negotiated the fees successfully.

I've had quite a few knocked off, notary when I used my credit union's notary, "overnight fees" in the days of email?, stuff I already paid like taxes and insurance (I didn't do the escrow for that). But yeah, most people get taken on closing costs/settlement fees. It doesn't make it right. Like those penny shares in Wolf of Wall Street, adds up over lots of customers. I wish more borrowers would pay attention, but the whole thing is carefully constructed so that only people who don't need a loan and are only leveraging have the bandwidth needed to argue the point. It's like tax appeal. Only the folks who can afford to pay someone to do it get their values adjusted without it being more trouble than it's worth.

 

[Tiffany Gibbons]

It very well could be. My expenses normally ran about 30% of the revenue I generated and approached 50% when mileage, office rents (when i did rent), help, E & O, depreciation were all included. And I have never typed a report on a laptop. Always a desktop computer. And between scanner, printer, copier, computer, monitor, and uninterruptable power supply, I've rarely had a year one of the other needed replaced.

I guess all the internet, electricity, gas, subscriptions for data, realtor fees, advertising, licensing fees and education, $3 million E & O coverage, business licenses, f and e tax, business tax, etc. is all powered by solar energy or 100% BS in California. Not so where I am.

 

[Tiffany Gibbons]

Not correct - at least for GSE lender mortgage work .

The retail fee is the same as the wholesale fee when a lender does not use an AMC.

When a lender uses an AMC, the AMC, as a middleman, takes a split of the browser-paid fee.

It is not the same thing as compared to appraisers who used to work at a fee appraiser shop ( I wrote used to work because that model was driven out by the AMC 'sand a fee shop on the res side rarely exists now - it is still survives in the commercial end)

I worked at two different res fee shops back in the day, and the owner never made appraisers under bid each other to get a job!( which is what AMC;s do ).

The appraisers with more experience got a higher fee split -often as high as 70% and usually had first pick at orders. They were valued, and the owners wanted to keep them. All the appraisers got the following benefits in exchange for working on a fee split" software or MLS paid, a shared secretary who made appointments/did admin, and a senior appraiser to review the work and be there to ask questions. The appraisers who were trainees got training. In addition, there was a camaraderie and a bit of fun, and other appraisers to bounce ideas and problems off.

.

Same. There were groups of us that different zip codes and counties (and states) and types of work. We didn't bid against each other. We got paid incentives for turn around time. And we covered for each other if someone was sick, on vacation, etc.

 

[George Hatch]

Not correct - at least for GSE lender mortgage work .

The retail fee is the same as the wholesale fee when a lender does not use an AMC.

When a lender uses an AMC, the AMC, as a middleman, takes a split of the browser-paid fee.

It is not the same thing as compared to appraisers who used to work at a fee appraiser shop ( I wrote used to work because that model was driven out by the AMC 'sand a fee shop on the res side rarely exists now - it is still survives in the commercial end)

I worked at two different res fee shops back in the day, and the owner never made appraisers under bid each other to get a job!( which is what AMC;s do ).

The appraisers with more experience got a higher fee split -often as high as 70% and usually had first pick at orders. They were valued, and the owners wanted to keep them. All the appraisers got the following benefits in exchange for working on a fee split" software or MLS paid, a shared secretary who made appointments/did admin, and a senior appraiser to review the work and be there to ask questions. The appraisers who were trainees got training. In addition, there was a camaraderie and a bit of fun, and other appraisers to bounce ideas and problems off.

.

Wrong. The retail fee is the appraiser's fee when that appraiser is the the one who has the direct relationship with the lender. Not when they are working for someone else who has that relationship.

Like it or not, you do not sell to the lender everything the AMC sells, starting with their expanded geographic coverage and whatever additional layer of review they perform. The lender has 10 assignments and they place them all with a single phone call or email. Not 30 phone calls to different appraisers trying to get their coverage. They leave that to the AMCs.

Now if your argument is that the AMCs value-add isn't worth $10 let alone $300 then there's going to be a lot of people agreeing with that, except perhaps for the lenders who have been deciding for the last 15 years that the $300 is indeed worth it to them. Unfortunately for the appraisers the lenders opinions are the only ones that count in their decision making. Nobody cares what the appraisers think.

Save your anger for the lenders, because they're the ones who - right or wrong - think the $250 AMC appraiser's work is just as acceptable for their use as your work at twice the fee. The AMCs are just engaged in order fulfilment. For profit.