Customary and Reasonable Fees?

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We the Owners Are the Only Ones that Can Fix Low Appraisal Fees…appraisal firm owners roll up your sleeves & hold the line on fees…

I have been the owner of HF Appraisal Ltd since 1993 and I have sat on the sidelines in regards to Customary and Reasonable appraisal fees. I can no longer stand by and read nor hear about this issue.

It is amazing to me that over the past five to ten years our fees have remained the same and in some cases are lower than they were 10 years ago. The more that I read about this and talk to appraisers across the country in classes and at conferences, the more I am amazed that it appears that none of my peers understand why.

The best way that I can describe the fees staying the same over the past ten years is simple: “it’s not you it’s me”. That’s right folks, we can talk about AMC’s until the proverbial cows come home, but it’s time for all of us to understand that WE the appraisers are the only reason that the fees have remained flat.

Nobody wants to tell you the truth about our fees staying the same for such a long time, well here are the reasons why.

  1. Most appraisal firms use independent 1099 appraisers and pay them a percentage of the appraisal fee. So, in our market in Chicago, let’s say that the customary and reasonable fees are $400.00 for a 1004 report. The appraiser completing the assignment gets between 50-60% of the fee or $200 to $240 per appraisal. The appraiser completing the assignment has to pay for their own E & O insurance, MLS subscription and appraisal software subscriptions. Let’s not forget that these appraisers are not employees, so they also have to budget for their own health insurance, fuel, and other miscellaneous fees.
  2. Now let’s look at the landscape when the market is slow. Where do all of these appraisers go to get work? The appraisers go to the AMC’s and are told that they will be paid between $250 to $300 per assignment. It’s pretty easy to see that all of these independent appraisers will make more money working for an AMC than they would for an appraisal firm that pays a percentage rather than making them employees. So as you can see, we are the ones keeping the fees low not the AMC’s. There will always be a group of appraisers that will be willing to take a lower fee to get work, but if we change our business models to employee based companies, we the owners would be able to hold the line on fees and they would naturally go up.

As I said in the beginning of this article, I have owned my company since 1993, and all of my appraisers are W2 employees with benefits, a private office, support staff, paid vacations and I pay for MLS, E & O insurance and other items. I know what you’re all thinking right now “well good for you, but my margins are much bigger and I can make more money using contract appraisers”. Yes, you can, but the next question I would ask you, are you the owner of an appraisal company or are you an AMC yourself taking 50% of the fee from your contractors? If you’re honest you already know the answer to the question.

There has been so much talk over the years about fees in our industry and we are the only ones that can fix it. This is a critical time in our industry, with the discussion of bifurcated appraisals, proprietary client desktop reviews used for lending, and waivers. Appraisal firm owners need to look at all of this and understand if we collectively run our firms like our lending clients do, we would have far more say in the fees, turn times, and have a workforce of W2 appraisers not going to the AMC’s when it’s slow, resulting in significantly lower fees.

To further expand, the AQB did our industry a huge game changing opportunity by lowering the requirements to become a licensed/trainee appraiser, and there are five options to upgrade to a Certified Real Estate Appraiser. I currently have five appraisal trainees and have made the decision to rebuild my company with a new generation of appraisers. For those of you still on the fence about my employee model, look at the upside of growing your firm and our industry. This will take some work on your part but I know that you will quickly see that you will be able to pay a trainee a fair salary between $35,000 to $50,000 per year, and if you really drill down on the numbers, you will be paying them considerable less than a 50% split for the work that they can complete and expand your company’s footprint and be able to go after more clients.

In closing, it is my belief that we as owners need to roll up our sleeves and get back out into the field with trainees and build our industry back up one person at a time grass roots style. If the majority of appraisal firm owners are not willing to give this a try please, don’t complain this winter when you are looking for work and the fees have gone down between 25-45% per appraisal and are being completed by your independent contractors that you are unable to provide work for because they won’t accept the split fee that you are willing to pay them.

By Patrick Felvey, ASA, IFA, Certified Residential Appraiser at HF Appraisal. Patrick Felvey is owner HF Appraisal since 1993 in Chicago. He recently partnered with Accurity Valuation, an appraisal firm with offices located nationwide. He is a current board member of ICAP (Illinois Coalition of Appraisal Professionals), A member of the ASA real property committee and an advocate for the advancement of the appraisal industry.

Image credit flickr - Christian Mohn

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56 Responses

  1. Avatar Bill Johnson says:

    Been a little slow on this site lately, but there’s nothing like a C&R fee headline to spark a little interest. Let the fun begin.

    Seek the truth.

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    • Retired Appraiser Retired Appraiser says:

      zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz. I too have grown weary of this subject Bill. I was once one of the biggest advocates for appraisers on the topic. Bottom Line: Appraisers are too lazy to help themselves.

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  2. Avatar Carl says:

    Patrick, what do you do when your business is really slow? Many of us like to have 1099 trainees/appraisers instead of W2s because when business is slow we can’t pay their salaries.

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    • Avatar Pat says:

      Carl,

      That is a great question. The most honest answer that I can give you is that I do everything within my power to keep orders coming in, tax appeal work, estate work, and I have to pick up the amount of work that I personally see to try to make those months as close to break even as I can. This is not the norm and I understand the people making jokes at my expense but I believe in my heart that my employees are the reason that I have been able to keep the company going for 26 years. As I said in the original post, I know that I could make much more money running with independent appraisers but in my experience there is no loyalty to completing assignments for me over someone else. I would also like all of you who made comments think about what it means to an appraiser that is able to take a vacation and still receive a paycheck because they have paid vacations and personal days.

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      • Avatar Carl says:

        Appreciate the advice Pat.

        How do you market to get business, private and/or lending? Do you market yourself and if so what do you do? Do you pay a marketing company (any recommendation)?

        I wouldn’t mind having 1099 appraisers but there isn’t always work to go around. We don’t accept AMC work. And even if we did, their fees are so low, I don’t think I would break even after paying my employees salaries.

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        • Avatar Pat says:

          Hi Carl,

          I do all of the marketing myself. I will set up meetings with lenders and credit unions, I will find AMC’s that pay what is called a cost plus model to their appraisers. This is becoming more prevalent the deal is that the bank sets the fees that the AMC has to pay the appraiser and the AMC gets a flat rare per order. I am also on and off the phone through out the day checking in with my clients and always asking if they have any work for me. Like I said my model is not for everyone you could have a couple of key appraisers and make them W2 employees and 1099 the rest. I just believe that there is value is having control of where my appraisers go and keeping them busy.

          Thank you for the question feel free to contact me if you have any other questions.

          Pat Felvey

          HF Appraisal Ltd
          Elgin, IL, 60123

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  3. Lane Leppink on Facebook Lane Leppink on Facebook says:

    This article borderlines on anti-trust violations and price fixing issues.

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    • Avatar Pat says:

      Hi Lane,

      I have seen some of your other post and it appears that you have had the misfortune of dealing with some unprofessional appraisers. In my office we ask for the listing agent to meet us and walk us thru the property. I am also an extreme advocate for real estate agents. Lets be very clear, in 90% of the markets the real estate agents have far more knowledge of what is going on in their markets than most appraisers. We as appraisers want to meet you at the properties to get perspective and you are a wealth of information.

      As for price fixing or anti-trust I believe that is incorrect. Your profession sets a percentage to sell or list a home and the percentages are remarkably similar so is that price fixing or anti trust? No its the expected cost of doing business. All I am trying to point out is that there are too many people taking fees off of the top of the appraisal before it gets to the appraiser.

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  4. Juan Zamudio on Facebook Juan Zamudio on Facebook says:

    Willy Escobar, Louis Chavarri, Esther Mikey

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  5. Avatar Seneca says:

    When an AMC sends you a request for $230 for a full 1004/MC to who do we appraisers report the violation of customary & reasonable fees to?

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    • Avatar Bill Johnson says:

      Relating to Dodd Frank, and federal law, to my knowledge there has not been a single case where a C&R fee violation was enforced. So, does it really matter “where to send”, when there’s no one there willing to enforce the law”? Where’s that 1-800 number appraisers were promised so violations could be reported. They never had any intention to fix the problem Seneca.

      Seek the truth.

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    • Phillip Case on Facebook Phillip Case on Facebook says:

      in my area is the problem is appraisers will accept these low fees so if you ask for more the AMC just moves on to someone who will accept low fees.

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    • Juan Zamudio on Facebook Juan Zamudio on Facebook says:

      Phillip Case same here

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      • Baggins Baggins says:

        The amc has a financial incentive to reduce your fee for variable opportunistic profit and are not required to return cost savings to consumers.

        The majority of appraisers whom sign up with amc’s have lost in advance. If you sign up to be taken advantage of, guess what happens next.

        The$e companies could eliminate these improprietie$ by doling out all order$ at a con$i$tent fee and a$$igning order$ in a round robin fair rotational ba$i$. Want to take a $tab at why they don’t do that? I’m even trying to leave you guy$ clue$ but I wonder if perhap$ you $imply don’t read the blog$ enough, or if you $imply don’t get it.

        Want to take a guess why they don’t utilize a more efficient and effective rotational assignment at consistent fees approach? Any takers?…

        “If you’re good enough to land on an approved appraisers panel, you should expect to receive a fair portion of the work load.” Appraisers whom game the system ruin it for the rest of us. You’re supposed to take the good with the bad at a consistent fee and just deal with it. Swim upstream if you want to but I’d remind you you’re not a salmon, you’re a human being whom should expect more. When you work with an amc, you are the customer.

        People should challenge the ideology more than anything else. I think the author was pretty brave to participate. He did not reinvent this wheel, he just rolled with what was already in front of him.

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    • Seneca, optimally to your state board. Possibly to CFPB as a violation of Dodd-Frank but in truth there is no reasonable enforcement mechanism within Dodd-Frank. I’d also make it a point to send a copy of the order to jim@asc.gov so he is at least aware of the specific orders tied to a property. The argument being that whoever the lender is, they are NOT assuring Dodd-Frank OR USPAP compliance. Not for that kind of fee they aren’t.

      Another person to send it to is Maxine Waters as Chairwoman of the House Financing Services Committee. She was an original advocate of DF; and objected strenuously when Jeb Hensarling sought to overturn it and her office is likely the best hope appraisers have in Congress currently.

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    • Avatar Seneca says:

      It was a rhetorical question.

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  6. Avatar Raymond says:

    the appraisal profession is mostly powerless, since we loss control and/or influence of the mortgage appraisal process. Hopefully, some day the appraisers will wrestle back control of the appraisal process from AMCs, lenders and other mortgage interest groups.

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  7. Avatar SB says:

    https://www.benefits.va.gov/homeloans/documents/docs/denver_fee.pdf

    This says it all folks…

    These are the REAL customary and reasonable fees.

    AMCS FEES ARE A COMPLETE JOKE

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  8. Patrick, forgive my being obtuse but I missed the part where you solved the low fee issue. I know you are not paying your W2 employee’s full fees; so THEY would already be working for less than C&R. Oh, I get that there is trade off on overhead and administrative overhead. I’ve worked split fees before.

    AMCs are the vehicle by which lenders directly and intentionally violate whatever provisions of Dodd Frank and FIRREA that are inconvenient for them. THAT is why we focus on them.

    AGA proposed a methodology for determining national or regional C&R fees several years ago. At that time a number of institutional trolls pooh-poohed the idea because they claimed no one should be able to tell them what MINIMUM C&R fees should be. These would be people that also don’t believe in minimum wage laws as near as I can tell.

    Several states set procedures. The second best is Virginia’s which simply tied it to the VA rate. Better than nothing – though unenforced because of the bogus coester and revaa originated lawsuit down in Louisiana with the FTC.

    If you or anyone else is seriously interested in developing a nationally applicable methodology for setting MINIMUM fees then I respectfully refer you again to the proposal at http://mfford.com/html/c___r_fees.htm

    I think the rest of your article pointing out alternative options both for business owners and those that prefer the security of being employees was great. Please keep sharing with us all. Whether we all agree with every issue or not, learning other perspectives is always a good idea.

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  9. Vincent R Simon on Facebook Vincent R Simon on Facebook says:

    Most borrowers don’t review all the costs of the loan. I got a call from a borrower after he closed and asked , How is it on your appraisal report, you disclosed the appraisal fee and the cost you n the loan was almost double that. Didn’t you do the appraisal report and who is Core Logic ??

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  10. Avatar Milton P says:

    What is the relationship between Accurity Valuations and Clarocity? The Clarocity logo is at the bottom of the front page of their website… Kind of makes you pause on this guys credibility if he is associated with Clarocity.

    https://www.accurityvaluation.com/

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  11. Avatar Pat says:

    Milton,

    I wrote this about my firm and my firm only. As for your other comments lets talk about it. For the past 15 to 20 years at every class we have been told something like this “folks there won’t be form appraisals in the next couple of years” , “the 1004 is going away”, “bifurcated appraisals are the future of our industry”. All of these things have been tried and failed as will the bifurcated appraisals because there is one common constant in our profession we still need to get into the home to do the inspection. The percentage of people who qualify for a mortgage waver is small and the lenders want to make sure that they have a person or profession to take the blame and risk. As for your comments about digging into me or my company I would be willing to talk to you and answer any questions that you may have.

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    • Avatar Milton P says:

      Not disagreeing with the garbage products will fail, but the question was what is the relationship with Clarocity. Your bio states your company is Accurity. You also are listed as the Director of National Business Development on Accurity’s website,. so any person would reasonably assume Accurity is your company. So getting back to the original question, what is your relationship with Clarocity. Clearly there is one as Clarocity’s logo is on YOUR website.

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    • Obviously, attending the wrong classes taught by the wrong folks. 15-20 years? Sure.

      While the hybrids will fail like so much other garbage foisted on us, it is the damage that they will do to the profession’s credibility in the meantime that’s the real concern.

      If yo are aware of how bad these ‘products’ are, then WHY do you offer them?

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  12. Avatar Pat says:

    My Company is HF Appraisal Ltd the owner since 1993. I was asked to join the Accurity group provide appraisal work nation wide for the Accurity appraiser network. Not sure if you know what Accurity is or what your deal is with Clarocity is but all we are trying and the key word is trying to do is get appraisers work. Many of out clients want a desktop review and some of our clients use the Clarocity desktop product. The goal if you would take a step back is to sign up appraisers and appraisal companies nationwide to go after national lenders with an elite group of appraisers. The benefits to becoming an Accurity affiliate member is that for $100.00 per year you get the following benefits, a subscription to ANOW an amazing database soft ware product, discounted health, dental and optical insurance since we were able to sing up enough members that the typical health care savings is anywhere from 15-35% compared to the state markets. The last piece to the puzzle was to actively start marketing Accurity to national lenders and the appraisers that have signed up with Accurity will have first right of the assignments in their markets with no pass thru fees. I know that you will not like to hear that I am under a NDA in regards to other products and services that we will be rolling out in the next five quarters. I hope that answers your questions and I totally understand your questions about the logo. Also please take a step back I am at best an employee of Accurity not an owner. I believe that Accurity could be a valuable asset to independent appraisers.

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  13. Avatar Milton P says:

    Take a step back? Your comments danced around the question. What is your relationship with Clarocity? Simply using a companies products does not warrant their logo on your website. Further giving pause is the fact it is Clarocity. Perhaps you should research them and see how this company is screwing over appraisers again. I will make it easy for you, just search Clarocity on this blog. There is more than enough info to make you soil your shorts. Your statement of just an employee of Accurity, well, the website states you are a Director. Maybe your definition of Director is different than mine, but you appear to be more than an employee. So once again Pat, I am asking what is the relationship with Clarocity?

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  14. Avatar Advocate says:

    Accurity sounds like some sort of Amway/ Zaio / AMC pyramid crap. Add in some sort of association with Clarocity and my suspicion radar is going off. Even more concerning is this guy Patrick is being very vague on his relationship with Clarocity. Of interest is also with so many offices, appraisers and states they claim to operate in, this model meets the definition of an AMC. How exactly are these ” franchises” licensed in each state?

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    • It’s a group of MAIs; SRAs, an ASA and assorted others. It’s not the people running it whose credentials are in doubt,. I’m fairly sure most would be qualified to complete a misleading proprietary form, bifurcated appraisal and perhaps even argue it’s not inherently misleading. The problem is the clients that think they are getting quality work and that these folks are actually going out and doing appraisals!

      No wonder they like the lowered entry bar to new trainees coming in. Only trainees would be fooled into thinking the products they deal in are real appraisals. What absolutely shocked me is that Peter Christensen has anything to do with it at all.

      I’d still love to see them post a (redacted) copy what they contend is a USPAP compliant hybrid.

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  15. Avatar Raymond says:

    ClearCapital, AMC. yuck

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  16. Avatar Pat Felvey says:

    So much for trying to put new ideas out there to help our profession. After reading all of your comments and unprofessional comments it no wonder where we are as a profession today. I wish you all good luck and hope you stay in the profession. As for Mikes comments this is just a man that is an independent appraiser that just sits around spewing garbage out. I’m sure that the American Guild of Appraisers would be disappointed in your unprofessional comments bordering on slander.

    I will never post on this site again as I now see how there is no unity in our profession.

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    • LOL, Not everything that is new is a good thing Pat. Odd isn’t it how when appraisers push back we are labeled unprofessional, “spewing garbage” yet the promoters of alternative standards lower than the MINIMUM accepted standards for federally regulated transactions think of themselves as innovators…right alongside other hucksters.

      By all means, if you are up to the challenge, go ahead and post one of your ‘USPAP compliant’ (redacted) proprietary bifurcated hybrids here for peer review. Surely with a leadership crew like yours, there should be enough talent to prove to peers how compliant your products are.

      You apparently don’t know me very well Pat. If you feel my comments on a blog have slandered you somehow cite them. Be very specific Pat. Just be aware I am not one of those appraisers that are intimidated by AMCs whose actions undermine the entire concept of appraisal integrity.

      As for potential AGA disappointment in my actions, I guess you’d have to ask them directly. Or, our membership-many who read Appraisersblogs or the 100%appraisers FB Group. Feel free to contact them directly.

      National President, Leo Regensberger Leoregensberger@appraisersguild.org or janbellas@appraisersguild.org.

      I’ll give you our new Executive V.P.s email as soon as we make the formal announcement.

      For what it’s worth, he’s taken down bigger ‘beanstalks’ than accurity, whom you have done a highly effective job of promoting here. Well done Pat.

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      • Baggins Baggins says:

        Don’t worry about it Mike. You’re the man and for one, I’ve seen the tides turning and am just sure you have had a very positive influence. Thank you to everyone whom participates. What’s it all for if we can’t have fun with it and build a better future for everyone. A drop in the bucket.

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    • Avatar Advocate says:

      Mr. Felvey,

      It saddens me that you are so quick to put yourself on a higher pedestal than those that are regulars on this blog. Appraisers are analytical by nature and when you have associations with companies that have not been the most ethical, we do question motives of sudden newcomers. It is in our blood. I read your article and to be perfectly honest, you are not stating anything that has not been stated many, many, many times before. So no, your ideas are not new.

      There are many who are much more involved with the reality of our industry than you will ever be and have more knowledge about the inner workings of what is going on behind the scenes than you could ever imagine. You had an opportunity to explain your connection to Clarocity, a known company in serious financial trouble and has been promoting products that are harmful not only to consumers, but are harmful to the economy. I will not even mention the fact that several states are questioning their compliance with state laws. Rather than explaining your association, you choose to dance around the subject. This raises serious concerns about what you are hiding. You sir, are completely out of your league when it comes to unity. You have associated yourself with the very same people that are putting you out of business. It is really a shame your blinders are preventing you from the truth.

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  17. Avatar Pat Felvey says:

    Mike,

    Just to be clear I do not do any of the appraisal products that you keep accusing me of doing. I am against all of those and have made it very clear. It appears that you want everyone to know how great you are at the expense of others. “I’m fairly sure most would be qualified to complete a misleading proprietary form, bifurcated appraisal and perhaps even argue it’s not inherently misleading.” and “It’s a group of MAIs; SRAs, an ASA and assorted others. It’s not the people running it whose credentials are in doubt,. I’m fairly sure most would be qualified to complete a misleading proprietary form, bifurcated appraisal and perhaps even argue it’s not inherently misleading.” Either way my intent was to tell my story of my company HF Appraisal and the use of staff appraisers not 1099 contractors to help prevent them from going to all the stupid AMC’s and lowering the fees. I guess that all got lost in translation once the you went way off point in regards to Accurity. Sorry again to even attempt to open up a productive conversation. Enjoy your website/blog Mike it looks like that’s all you have. Congrats your the king of the armchair appraisers all talk and no action. Maybe I will pay the $365.00 per year to become an American Guild of Appraisers member, by the way I see that anyone can join there is no review of the applicants so my last question to you is what are you doing with all of the dues?

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    • “Yawn.”

      “Many of out clients want a desktop review and some of our clients use the Clarocity desktop product. The goal if you would take a step back is to sign up appraisers and appraisal companies nationwide to go after national lenders with an elite group of appraisers. The benefits to becoming an Accurity affiliate member is that for $100.00 per year you get the following benefits, a subscription to ANOW an amazing database soft ware product, discounted health, dental and optical insurance since we were able to sing up enough members that the typical health care savings is anywhere from 15-35% compared to the state markets. The last piece to the puzzle was to actively start marketing Accurity to national lenders and the appraisers that have signed up with Accurity will have first right of the assignments in their markets with no pass thru fees. I know that you will not like to hear that I am under a NDA in regards to other products and services that we will be rolling out in the next five quarters.”

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  18. To be fair when Patrick Felvey submitted this article to us, the only bio he included was the following:

    “Patrick Felvey is a current board member of ICAP (Illinois Coalition of Appraisal Professionals), A member of the ASA real property committee and an advocate for the advancement of the appraisal industry.”

    There were no links included in his bio; no links to his company’s website (HF Appraisal LTD), and nothing about Accurity Valuation. Since we like to include author’s company website and social media links in the bio, when we googled him we found his bio in the Accurity website and included it in his bio here. Mr. Felvey DID NOT write this article to promote Accurity Valuation or any of the products offered by Accurity. There is no mention of Accurity Valuation in his article, and there was none in the bio he provided to us.

    One final point, this website/blog is not Mike Ford’s website nor the AGA’s. The owner is an active appraiser who also happens to be an AGA & VaCAP member. She started this blog in 2011, way before she was a member of VaCAP and AGA.

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  19. Avatar Pat Felvey says:

    Thank you so much for the clarifications this was only an attempt to help keep our fees stable through out the year. I was clear that my way was not for everyone and I just want to keep property valuations in our hands.

    This will be by last comment and post, thank you all for your comments

    Pat Felvey

    HF Appraisal Ltd

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    • Avatar Mark Skapinetz says:

      Thank you for putting this article out and explaining how you do things and how its worked for you and your business. I however have to disagree with the fact that fees are driven down due to appraisers running off to amcs to get work. Many Independent appraisers may have 1 person or many working for them. The appraiser or business sets the fee that they are willing to accept. I for one know what I am WILLING to accept and what I am not WILLING to accept. I run a good business and get good fees from my GOOD clients. Many amcs offer way below C&R fees to appraisers and many appraisers do accept those fees. Why? Well there may be many reasons such as not having good clients to work with, maybe they aren’t a good appraiser, maybe they have been black listed and have to work with clients that allow them to continue to work, maybe they have been threatened that they wont get work due to not accepting this fee, maybe the amcs they work with continue to bid out work and they are forced to take lower fees in order to get work. Not everyone out there has been in this business as long as some of us and some may just not know any better. C&R has no meaning because No one has established what that is. No other industry has this problem of others telling us what they will pay for a job or tell us we have to pay a TECH FEE to upload a report due to their poor choices of who or what software they decided to use.

      I wouldn’t put all the blame on appraisers for low fees. If i remember right before AMCs came flooding the profession I was able to negotiate with ease my fee with the lender or mortgage company, just like i do today for private work. Right after HVCC was put into place and the amcs came about i do recall almost every AMC offering below $300 fees to appraisers and over time it has increased with many amcs but still not to what it was pre 2008. Amcs commingling with fees has caused this issue. If borrowers are willing to pay $500+ for what they believe is the appraisal then that should go to the appraiser and the AMC should negotiate a separate fee for THEIR services to the lender and not take a cut of the fee which reduces our fees. Maybe read my blog post entitled “whats not in your wallet” that was posted here on blogs as well. Think about this… When it was slow back in Jan-Feb some amcs were outright asking appraisers to cut their fees down. Why? Because the volume wasn’t there for them to sustain themselves and pay employees. They sure as hell didn’t cut their fees to the borrowers instead they were trying to make more off what they had by asking appraisers to cut their fees. You mentioned that if we changed our business model to employees and not 1099 status that fees will go up. I am having a hard time understanding how that will make fees go up so I’d love to know more on that claim.

      Now you said you have your own company however you did join the Accurity Appraisal team correct? So your company was acquired by Accurity and you now work for them as part of their nationwide network. Correct me if i am wrong. So that would make you part of their franchise? According to their site: Accurity franchisees are able to enjoy benefits unattainable by them as standalone companies. These include national sales and marketing support, national branding, employee benefits package, group buying power and the synergy of being associated with other top appraisal firms across the country. Ideal candidate firms will have demonstrated success in their marketplace as well as a desire to grow their business.

      Now by all means I am not attacking etc here. But it appears you have a larger company supporting you and the appraisers you hire, freeing up money for expenses etc which many like myself do not have that option unless we joined forces with the likes of an Accurity and the AMCS they associate and partner with.

      I think when it comes down to fees the blame cannot all go to us independent appraisers and trying to CONTROL things. The blame needs to go directly where it should go….. The amcs, the lenders and the ridiculous laws passed that have limited our profession to compete in a free market and actually act like real businesses.

      It’s good to see that there are alternative ways to pay employees and still make money while doing that. Please feel free to look me up and maybe give me some insight on how your method will make things better for the profession going forward and how we can expect to have fees rise due to it.

      Thank you.

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  20. Avatar Pat says:

    Mark,

    I own my own company Accurity did NOT buy me nor will I ever sell It to answer your question. As for the benefit if joining Accurity I have not used any of their resources NONE! They sought me out to help build out a national sales group. I am not paid, I own no stock, I am not on the board of directors, I have no voting rights. I am trying to get out of this entire conversation as the owner of the blog has stated I wrote this as the owner of HF Appraisal Ltd. I agree with you in regards to the lenders and some of the AMC’s. That being said do you really think that any of the big national lenders will ever go back to ordering their own appraisals and reviewing them. The banks were able to lay off thousands of employees when HVCC and Dodd/Frank came in. Why would they open themselves up to that kind of exposure and employees costs again?

    I’ve spent way too much time on this. Bottom line we all need to keep the fees up and the only way is if we all work together.

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    • Avatar Bill Johnson says:

      Pat, you said, “The banks were able to lay off thousands of employees when HVCC and Dodd/Frank came in. Why would they open themselves up to that kind of exposure and employees costs again?” The key here Pat, is separating the AMC fee from the appraisal fee. Would the banks again hire thousands of employees to manage the process in-house like they used to, or would they pay $100 to $500+ PER APPRAISAL to an AMC? One of my clients is a small credit union (30 branch locations / 500 employees), and I have 1st hand knowledge that the so called appraisal department contains TWO PEOPLE (They use Mercury Network/manage in-house). The banks would figure out overnight that its cheaper to run in-house versus using an AMC, or they would simply just charge the borrower the AMC fee.

      The 1st step is to separate the fees.

      Seek the truth.

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    • “Many of out clients want a desktop review and some of our clients use the Clarocity desktop product. The goal if you would take a step back is to sign up appraisers and appraisal companies nationwide to go after national lenders with an elite group of appraisers. The benefits to becoming an Accurity affiliate member is that for $100.00 per year you get the following benefits, a subscription to ANOW an amazing database soft ware product, discounted health, dental and optical insurance since we were able to sing up enough members that the typical health care savings is anywhere from 15-35% compared to the state markets. The last piece to the puzzle was to actively start marketing Accurity to national lenders and the appraisers that have signed up with Accurity will have first right of the assignments in their markets with no pass thru fees. I know that you will not like to hear that I am under a NDA in regards to other products and services that we will be rolling out in the next five quarters.”

      Appears to meet the very definition of an AMC according to many states AMC laws.

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    • Avatar Milton P says:

      “I own my own company Accurity did NOT buy me nor will I ever sell It to answer your question. As for the benefit if joining Accurity I have not used any of their resources NONE! They sought me out to help build out a national sales group. I am not paid, I own no stock, I am not on the board of directors, I have no voting rights. I am trying to get out of this entire conversation”

      It really does not matter who or why you wrote this article or even what company you claim to be associated with. It doesn’t even matter that you want out of a conversation you don’t like. The story you are stating tells a very different story to the facts we have discovered about your relationship with Accurity.

      That’s fine if you want to keep what ever secrets you have, but the reality is Accurity is associated with Clarocity in some way and Accurity is associated with Columbia Institute, which is CoreLogic. Neither of these companies are friends of the appraiser. You have lost all credibility when you are the National Director of Business Development promoting Accurity. Had you just come clean on everything when asked, this conversation would have had a different path.

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      • Baggins Baggins says:

        Anyone whom can say you’ll only get 50% as a licensed appraiser, with a straight face… Try paying your people a professional wage and watch them subsequently have higher aspirations in the free market. The majority of appraisers are paying 1099’s? Is there data to back up this claim? I work alone.

        It’s true though, when puppy mill big deal appraisal firms slow down, appraisers really can earn more at amc’s. It only makes sense to take a leg up, even if just a small step. It’s a shame that vital skills like how to market to lenders directly, get on approved panels, and negotiate a fair market rate, it’s just too bad those skills were with held from their training periods.

        If only their ‘mentors’ would have better equipped them to be good negotiators, in their aspiring positions of being price and value experts… People wonder why appraisers are ill equipped to stand up to abusive oversight these days. That’s how they were trained in the first place. Who takes 50% and makes them pay their own expenses!? Do people really go for that? Puppy mills were the original amc’s and if not for amc rules, they’d still to this day operate with dozens of appraisers in there taking fee splits rather than just a few which is probably right up to the state limit so they don’t have to be officially defined as an amc.

        This broken record keeps on skipping.

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  21. Avatar Raymond says:

    I’ll repeat the AMC business model is NO friend of the appraiser. The AMC model was designed and implemented by and for lenders along with other mortgage interest groups. The AMC model is the closest thing to professional slavery. A very sad situation for appraisers. Personally, I stop doing lender work 15 years ago. Hopefully, the appraisal profession can turn this situation around. I wish I had a solution beyond just saying no to AMC work and forming a new appraiser group.

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    • Baggins Baggins says:

      The amc model rides on the back of those proprietary cozy relationships where the mortgage manager funneled all the work to singular firms whom made deals work. Different name, same model as before. Amc’s, middle managers, puppy mills, order farmers, etc.

      The best appraisal firms are more like partnerships where appraisers are free to be released whenever they want, but it may be a difficult play if they no longer had trusted mentors to advise them with complex or unusual requests, walk them through advanced accreditation programs, teach them how to represent in court, avoid liability, how to deal with the dynamic range of more than just mortgage lending work, etc. A good fee split for a fairly minded firm is something 70% plus.

      Ideally licensed appraisers should be self managed, cover all their own expenses, and then not feel any resentment or loss of working value when the firm owner still gets a tenth or so off the top. The firm manager functions more like an administrator and rakes a steady income with workflow management and fire extinguishing, all the while enjoying a position where they don’t have to sign as supervisory appraiser and no longer even has to market the services of their contractors because if they want more, they build the firm by marketing on behalf of the firm.

      An appraisal mentors proper position is to fully equip a trainee to be self sustainable while upholding public trust, upholding the peer standard, and not be hoodwinked by aggressive business interests…

      Price is not the same thing as value, and it will always be an impossible sale to tell a person that literally half of their potential income is with held because of the ‘value of employment’, or the ‘value of mentorship’.

      Just like massive puppy mill efforts caused a proliferation in appraisers willing to work with amc’s to get a leg up, and just like how amc’s are having a tough time maintaining their position as appraisers finally get wise and market to lenders directly, the viable days of this sort of business model will remain limited.

      There are some interesting ways to restore C&R…
      http://www.workingre.com/wp-content/uploads/2013/08/IVPI-Proposalfinal.pdf
      Pg 6, “the solution”.

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  22. Baggins Baggins says:

    These amc people and appraisers that serve them live in a bubble. I still deal with lenders whom order their own appraisals, run their own reviews, and pay me the full fee. No unnecessary bloated management overhead.

    When the amc’s start billing on a cost plus basis, eliminate the financial incentive to drive down appraisers fees for variable profit, as the cost savings are finally returned to the borrowing consumer, and pay the VA fee table rate or close to that… Keep dreaming.

    The authors premise is interesting but also misses the mark. If you want to run a big old glorious business, go into sales. The best appraisers came up through family and friendly connections and never had to abide those fee splits in the first place. The purpose appraisers serve is quite important, those whom treat upcoming appraisers as disposable resources are as much to blame as amc’s. I remember getting 80%, or salary, whatever the intake numbers would support at the time.

    Because I never took splits like that in the first place, there was very little question or misunderstanding what a massive rip off working with split fee firms or amc’s really meant to me as an individual.

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    • Avatar Pat says:

      Hi Baggins,

      I could not agree with you more our two sons are both trainee appraisers and my wife is about to get her trainee license as well. To add to that my other appraisers in my company were trained by me and have been with me 10-20 years because they were friends or friends of a friend that asked me to give them a chance. I was trained by a family of appraisers the husband, wife and daughter. I learned from the ground up and will never forget the opportunity that they gave me. They paid me a split fee and I stayed with them for four years until they were ready to close the shop due to age and illness. When I started my own company it was with a friend and we made the decision to not pay a split or use 1099 to give the people who worked with me a steady income and with a bonus system in place so they could take advantage of the busy times. I agree that there is no simple nor single answer to keeping the fees up, I just thought that an open conversation would be productive. As you can see it has not and it did not have to. I continue to believe that there are more positive outcomes for our profession.

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      • Baggins Baggins says:

        Hi Pat. Thank you. This website is a grinder, no doubt about it. All types and all ideas. This site is accessible through normal internet and many presume it’s only a facebook group. I’m just accessing via web address and don’t even have a facebook.

        I don’t know, this is not what I signed up for though, the proliferation of amc’s really crushed this industry and have many of us exploring where the new careers may be. If I’m going to answer to a boss, that certainly won’t be a middle manager, and I’m more likely to dip back into trades, which would make a nice accompaniment to the diverse skill sets appraisal has given me.

        My personal take on appraisal is that it’s an essential check and balance and the position is best suited for independent advisors. Although the tech guys provided so many of us tools to ‘build businesses’ around this, I just think this little segment of the industry is better suited for straight up full speed full access independence. Like you said, but under a different light, we’re creating our own problems.

        Amc’s just really, well, can these non licensed ancillary people please just try to manage someone else instead? We’ve rejected them in unison enough, they should get a clue. Like how Mercury network promotes amc’s and shares lists of them freely, but then refuses to release lists of which lenders assign direct and don’t use amc’s. They know very well that if appraisers were given easy opportunity to market away from amc’s, the entire body of them would jump ship like the very next day. 9 out of 10 would at least, which interestingly enough is the inverse proportion compared to how amc’s try to build up on a few of the appraisers and leave the rest riding the bench. What’s wrong with full fee, no splits, rotational assignment, and shutting down appraisers whom game the system?

        I don’t know, no easy answers but thank you for participating. I just try to make the best of it and add some color now and then. This really is an uncensored site where sponsors do not have control of content, a rare benefit in this modern day for sale media environment. I said I was never going to post again like years ago, here I am still, ha. What’s most interesting to me about this site is that all content gets higher search visibility for outside researchers and is not held behind a login wall like appraisers forum, and the content is not constantly framed around the wishes of the various sponsors and such. Anyone with anything relevant can write here which is why I find myself here for my daily fix quite often. Thank you.

        Hopefully the tides are turning in this country.

        https://www.pbs.org/newshour/amp/education/decades-pushing-bachelors-degrees-u-s-needs-tradespeople

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Customary and Reasonable Fees?

by Guest Author time to read: 4 min