One of my lifetime best friends is Bart Simpson, who is an actual person. We grew up together from elementary school through high school but went our separate geographic ways to college. My other best friend during that era of my life was Harry Benson, who was also the key character in Michael Creighton‘s early best seller, “The Terminal Man” but that’s another story. Bart taught me how to ski and how to make plexiglass cookbook holders (hey it was the 70s). We spent our weekends riding bicycles everywhere, especially into D.C. on weekends to meticulously go through each of the Smithsonian museums – you could say we were sponges of random information. There must have been something borderline addictive in the Bethesda, Maryland water because we also both turned out to be real estate appraisers. He would tell me how he would leave messages to schedule appraisal inspections as “Mr. Simpson” because his full name caused many homeowners to think it was a crank call and not call him back.
Last week I posted an interview: The Apple Peeled – Ask the Experts: Market Dynamics with Jonathan Miller and Bart had something to say about it. He gave the most coherent spot-on description of the AMC situation most appraisers find themselves dealing with daily and yet these AMCs hire many of the lobbyists that have helped forge regulatory rule changes like the recent proposal that raises the de minimus to $400,000 without any concern for the consumer (or the taxpayer). Here is his perfect depiction of AMC interaction with appraisers:
I am so fed up with the AMC’s that spend plenty of time giving me the opportunity to bid on a job (Please provide your fee and turn time), when they have not even taken the time to see that I am not licensed in that state. They just send an email to everyone within a large radius, and wait for us to research it and provide a fee. Last week, I had one ask for a fee and turn time. The crazy part was that they did not have an address or legal, just: “30 acre property by the river Per lender-Tax Ma 4, Parcel 6” If you research this property and find out details please provide them to us so that we can provide the details to the customer when quoting this assignment. Please confirm you can assist with this assignment and then provide your fee and turn time.
So they wanted me to find a 30 acre parcel, assume that it was the one they needed appraised, research it and provide a fee, so they could respond to someone else that was clueless. I was not licensed in that state, so I did not waste my time.
The idea for AMC’s was logical – that they would be able to distribute the work without bias. Jonathan gets this appraisal, Bart gets the next one, and Whit gets the third. It is now standard practice to see: We collected $600 for an appraisal at Deep Creek Lake Bart charges $575, Whit will do it for $350, Bill can you do it for $300? Bill eventually will say yes just to get some work, but along comes Smedley Dingledorf, who just got his license and has never been to Deep Creek Lake. He is happy to visit and learn about it at the buyer’s expense, and takes the job for $275. No quality or expertise, but they got a piece of paper saying the house is worth what they need it to be.
Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts.
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