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Communication Gone Wrong: AMC Communications Have Failed Consistently

AMCs communication have failed consistently….

As a Certified Residential Appraiser that started my career as a loan officer in the early 1990’s, I am baffled how many who claim to be mortgage or valuation professionals that are just clueless. Don’t get me wrong, I am not talking about any one person, group or business type, but a true lack of understanding of the underlying principle of Real Estate… that is each property is unique. Even in cookie cutter subdivisions where every third home is the same model, there are differences both in the land and the improvements. If you don’t believe me, just pick up any real estate book and read.

Some would argue that the role of a Real Estate Appraiser is to determine an opinion of value. I would argue the role of a Real Estate Appraiser is that of a communicator. Yes, providing an opinion of value is a component of the Real Estate Appraiser, but it is not the role. Communication is the key to a successful appraisal and it starts with identifying the problem.

How does an appraiser identify the problem? Well, it’s not through any text message blast or mobile app that the AMC has forced upon you. Nor is it through an email blast to every appraiser that covers the locality of the property and it certainly is not the blasts asking for your fee and turn time.

Digressing back to my days as a loan officer, I would fill out a complete application on the borrower and talk to them. Just like an appraisal report, the loan application tells a story. Not only did this build rapport and trust with the borrower, it gave me the information needed to help the borrower. I found out about any credit issues, the type of property and any issues with the property. Most importantly, I found out the reason for the mortgage loan and put them into the right loan program. Applying this to the appraisal process; I identified the problem and determined the scope of work!

It is through communication, talking to the client: What is the purpose of the appraisal? Mortgage financing? Divorce? Estate Settlement? Right of Way? What are the characteristic of the property? Are there any unusual situations? Easements? Encroachments? Is the property historic? Historic designation? In other words, tell me all the details so I can help you or point you in the right direction. This is where the AMC communications have failed consistently.

The practices of text blasting, email blasting and requesting fee and turn time are detrimental to all parties involved, most especially the property owner. Federal and most states laws and regulations require the appraiser be vetted and be qualified to complete the assignment. This does not mean their license is active and they cover that area. This means does the appraiser have the qualifications, background education and experience to complete the assignment.

Any entity, AMC or lender that utilizes these practices, I encourage to stop. You are failing at you intended purpose and quite frankly are embarrassing yourselves with your lack of understanding of the core principle of Real Estate. An appraisal report is not a fast and cheap document. It is the unbiased expert opinion of value that protects the client, homeowners and investors. The success of the report is directly related to the communication done by the appraiser. This communication starts with the assignment, getting all the pertinent information, communicating with homeowners, agents, governmental agencies, and other appraisers. The appraisal report is a story and concludes with an opinion of value. This value is only credible if the communication is successful from the beginning.

I recently learned some state regulatory boards are watching closely how appraisal assignments are initiated by the AMC. This is being tracked when complaints are filed against an appraiser. I am unaware of any disciplinary action against an AMC for this practice thus far, but I would place a large wager it is coming very soon. Rumor has it there is one state that is in the process of trying to pass very specific legislation preventing and/ or limiting electronic blasts of appraisal assignments. I hope the bill passes. This will help appraisers across the country as other states will follow with similar laws.

There is no doubt technology has helped each and every one of us. Knowing when it is appropriate and beneficial is the key to success. As an appraiser, you have choices. You can chose to succumb to these degrading, harmful practices or you can be the Professional you are and refuse to work under these conditions.

By John J. Appraiser, Certified Real Estate Appraiser – author requested to remain anonymous

Image credit flickr - Andrew Mager
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38 Responses

  1. Anonymous says:

    I am on a committee for a state board attempting to pass similar regulations to the ones you mentioned (I won’t mention which state just to be safe). I too hope these regulations pass. I truly believe there is a right and a wrong way to go about appraisal management, and assigning appraisals orders by lowest fee/turn time is not the right way. However, there are some good AMCs out there, and I’m hoping that the outlawing of this practice will rid the industry of the bad ones.

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  2. Positive Appraiser says:

    The thousands of online lenders that have taken over from the block and tackle paper loan officers should be enough to get any appraiser on track that digital is going to be the way. I don’t understand the constant push for appraisers to go back in time. The reality is that times are changing and their will be ups and downs during these changes. At one point we didn’t have any forms for appraisals, then their was 10 different forms you had to buy from the bank, now they have a handful of forms and overlays, then an online portal etc. I am thriving like never before in this new environment. You can easily hire someone to update all the website, everythings online and you have all this legislation requiring you to get paid timely.

    I read this blog because it’s entertaining but appraisers need to wake and up realize that theirs almost no other profession you can make $150k or more per year, work from home, be out on the road and have very little to no interruptions per day.

    If the worst thing in your day is that you have to update a website or get a blast text message fro an order (they are paying you) then I think you lived a very blessed life.

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    • Baggins - Trolling here? Baggins - Trolling here? says:

      Down voted. Sounds just like the argument many an amc managers have made, with a slice of fairy tales from the 1%.

      If you’re an amc worker and would like to blow the whistle on concealed unethical behavior with your amc employer, past or present, please contact the administrator of this website. There is a hundred thousand remaining appraisers, fewer daily, waiting for some non appraisers to do the right thing. We need reliable jobs too. Thank you.

      There are tools to promote the new technocracy rule over the appraisal industry as we transition away from reliable independent human based checks and balances and fair compensation for all industry workers. Welcome to appraisal.

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    • John J. Appraiser says:

      Wow, only three comments in and someone already embarrassed themselves! Thanks for proving my point Positive Appraiser!

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    • Diana N. says:

      I guess you are one of the appraisers that grab all the “flash orders”. Sorry I don’t agree at all and I have been doing this over 40 years and proud of it. By the way it’s spelled there, not their

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    • Chris says:

      We make $150 + a year because this job is complicated, hard, takes 12 hours a day, a lot of weekends and a lot of mental brain draining analysis. Then the idiot $8.00 and hr AMC’s workers who think we are all over paid and frankly very jealous of our earnings. Because you know, all we really do is drive around and take pictures. They don’t know or even care we do it in the rain, the heat, the snow, the ice, when we are sick or when we stayed in the office till 12 pm to keep our desks caught up.

      No one but us appraisers know what it takes to write an appraisal. And only the good ones know how really hard it is to write a top shelf appraisal report.

      The rest of you non appraisers in this industry barely passed high school. And we have to deal with all of you ! Endlessly. God forbid the realtor over sold the property by 30 k, because they all know we appraisers don’t know what we are doing when we don’t hit their numbers !

      Add that to your equation.

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      • Baggins Baggins says:

        Chris it’s important to give credit where credit is due. The amc’s are so good at manipulating pay scales that many of their employees earn more than the appraisers they send orders to. Sometimes they’re salaried, hourly, and commission based. Just a little factoid for you.

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    • Tom C says:

      Positive Appraiser, you find this blog entertaining because you’re an AMC troll. We can smell AMC trolls from miles away. Best keep away and do what you do best. Steal from appraisers and lie about how much appraisers really make. What a joke!

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    • Any residential appraiser telling me they are making $150,000 a year* and obeying all the laws, rules and client requirements while performing fully USPAP compliant appraisals is one I view with skepticism out of the gate. (*in a 40 hour work week).

      Now that FNMA announced they’ll allow trainees to go inspect properties it may well become feasible (again), but THAT did not happen because appraisers sat quietly and did no complaining.

      It involved a LOT of public outcries, public testimony before Federal agencies; and constant bashing of FNMA in blogs like this and others. CAUTION! Make sure YOUR state allows you to do this!

      If they do not, then work with your state coalition (or even AGA) to try to get emergency legislation passed that allows YOU as the supervisory appraiser to determine when the appraiser (trainee) can complete property inspections on their own  with CAREFUL review by you and them together back in the office!

      No two people are alike. I’ve had people that did a great job after three monitored inspections, and others that never did get the idea even after months of co inspection.

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      • JAMES says:

        I WAS ALSO DUMBFOUNDED WHEN THE APPRAISER STATED THAT HE WAS MAKING A $150K A YEAR. THAT’S BULL! IF THIS FELLOW WANTS TO HAVE A LONG CAREER IN THIS PROFESSION, HE BETTER WALK A STRAIGHT LINE AND FOLLOW ALL OF USPAP GUIDELINES. THE ONLY WAY TO MAKE THAT MUCH IN A YEAR, THIS GUY HAS TO BE FULLY AUTOMATED, RUNNING APPRAISAL THROUGH THE MILL AND MAKING EVERY CONTRACT PRICE THAT IS PUT IN FRONT OF HIM. GOOD LUCK WITH THAT.

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      • Diana N. says:

        James, I have been getting e-mails and cards from an appraisers who claims to be making an average of $5,634 a month for doing Desk Appraisals, he even send an audio. One appraiser claims to have done 45 jobs over 4.5 days. What’s up with this, I won’t print his name unless I’m asked to, don’t want to give him any publicity. What does everyone think of this ???

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      • JAMES says:

        45 JOBS IN 4.5 DAYS, IMPOSSIBLE! I APPRAISED ANOTHER APPRAISER’S HOME SEVERAL MONTHS AGO. HE STATED THAT HE DID 50-52 APPRAISALS A MONTH. I DID THAT BACK WHEN I FIRST STARTED IN THIS PROFESSION. I WAS BEAT OUT BY ANOTHER APPRAISER IN MY OFFICE. ANYONE WHO IS DOING THAT MUCH WORK IS GETTING PEANUTS FOR PAY AND HAS TO DO THAT MANY APPRAISAL TO MAKE ANY MONEY. I GUESS WHEN EVERYTHING YOU HAVE IS AUTOMATED, EVERY STATEMENT IN THE APPRAISAL IS A CANNED-COMMENT, ONE MIGHT BE ABLE TO DO THIS. THAT’S JUST WRONG. IT WILL CATCH UP WITH HIM OR HER SOON ENOUGH. WHEN THIS PERSON GETS PULLED IN FRONT OF THE APPRAISAL BOARD AND IS ASKED TO SHOW SUPPORT FOR THE ADJUSTMENTS, I THINK HE OR SHE MIGHT REALIZE, O LORD WHAT HAVE I DONE.

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      • for Diana N (below?)

        45 jobs in 4.5 days? 36 hours if a workday is still 8 hours (Lol!)

        That’s one every 48 minutes.

        In my area nearly all appraisers are reporting a frightening prolonged slow season. Winter is traditionally slow, but most claim this time around they are not even seeing the expected modest upturn.

        I talked to one that said he started doing $75.00 evaluations for use by credit unions (NCUA are you LISTENING???). We had the usual discussion about USPAP compliance and he says the preprinted forms have all the nifty required disclosures, extraordinary assumptions etc..

        Now in 48 minutes I could probably ‘state’ all the required elements of an AVM or AAVM…but I certainly could not analyze or explain them in that time frame.

        So back to your question Diana. If he is earning $5,634 that’s only 75.12 ‘appraisals” a month. He must be ‘slow’. Because if all I need is 48 minutes per report, even working only half a day I should still earn $375 per half day or $7,500 a month.

        Tell you the truth though, IF I could earn that much in half a day I’d just bite the bullet and work 8 hours a day! Admittedly I’d have to give up eating or taking a bathroom break, but we all have to make sacrifices. Besides I could just blame spilled coffee for any visible consequences of my ‘dedication’. I mean come on people it’s $180,000 a year as an appraiser!

        Why we’re talking Coester AMC VP’s kind of money now!

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      • Diana N. says:

        That’s what the spiel says, 45 in 4.5 days. I remember working 12 hr days 7 days a week now….sorry, I’m to old for that pressure, been there, done that, now I just want to pick and choose. If they want to pay my fee, fine, if not, let the trolls take it. I like my private work, tax appeals, divorces, estates, etc. Keep up the great column, love the comments. Stay warm & well.

        Diana

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  3. WayneCourtney says:

    Really? An AMC is discussing understanding the appraisal profession? What part of parasite do they not understand? This is so stupid that I cannot even laugh anymore. If the AMC’s want to do appraisals…I say they should get a license/certification and go do the damn appraisals. Leave the rest of us the **** alone!…Really, I did not take them to raise and they are not my dependents. Let them go to hell and I do not even wish them the best! LOL

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  4. Mike Ford Mike Ford says:

    John, one of the best posts I’ve read in a long time!

    Part of the problem stems from appraisers (and especially AMCs and lenders) that think we ‘just appraise physical real estate.’ We do NOT!

    What we appraise (not to quibble overly much) are clearly identified specific interests in real property. As you already know, there is a huge difference.

    In 1986 & 1987 my AIREA (now AI) instructors pounded into my head that real property is only part of the problem. My mentors taught the same thing; and I have continued to harp on it with those I’ve been fortunate enough to train.

    Finding out what the exact ownership interests are is the rest of the problem. I don’t mean only fee vs leased fee. I’m talking about easements (shared common drive? Maintenance agreement? Obligations for regular or incident related maintenance?), or fee MINUS an easement for ingress & egress? One that may make huge portions of a property unusable. Mandatory neighborhood owners associations even though it is not a PUD?

    C C & Rs (used to be 3 Cs-conditions, covenants, codicils and restrictions).

    Even something as innocuous as a 6.5 acre ranch style in a sub division of similar 3.0 to 10.0 acre ranch styles, OR 6.5 in an area where there are no other large parcels within five miles and the lender tells you to “only consider the first five acres”…whatever that is, requires careful thought and analysis…not a race to accept the order.

    My Favorite is a so called ‘live-work’ unit in a 110 unit attached condo project zoned mixed office/residential in a predominantly industrial area being gentrified, and where each owner owns an undivided percentage of common area plus their individual unit. “Single family residence”, OR “residential dwelling unit in a commercial mixed use condominium project”? I’d LOVE to hear the views on this particular one since there is an ongoing dispute involving that specific issue.

    John your prior loan officer experience interviewing property owners clearly made you a better appraiser. My prior 6 years as an agent plus 8 in a large financial institution helped make me a better appraiser. These are exactly the components that are missing in most AMC staff these days…relevant experience.

    AMCs are not inherently evil so much as they are incredibly ignorant about the things that affect the service they purport to provide. No single regulatory agency has the authority or desire (apparently) to correct this.

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    • Wayne Courtney says:

      Hello Mike….thank you for all you do!

      I am the appraiser chairman for our local board. Being in that wonderful position, I was asked to chat at the “lunch and learn” meeting at the local board. (really I have done similar chats with this group dozens and dozens of times) I am not sure why I keep accepting this type of chats but I get to meet some new and great Realtors)

      Gee, maybe I just do not understand! We have all of these appraisal gurus that have never built a home, have never sold a home, never rented a home. They are awesome! Do they know the difference between an internal rate of return or a financial rate of return. Do they know what a debt coverage ratio or a mortgage constant is?…but they want to be YOUR COACH? Really? How many of us are stupid enough to pay money be coached?  Or even more stupid…lets pay our money for the EXPO! Come on…appraisers are NOT fools…why cannot we reject these clowns? Really….Let me show you how to fish for bass! LOL (cheap…actually for free, lol)

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  5. Agree with John J says:

    What do you do if your next quickly accepted assignment is a 2 bedroom 700 square foot home on acreage in a low density market? How far are you driving for your comp photos? How much explanation are you going to need to put in the addendum about adjustment guidelines being exceeded? If you haven’t read the Scope of Work at the top of Page 2 of the URAR 1004 form lately you may want to revisit what you are certifying when you sign the appraisal. The Scope of Work rule in USPAP requires us to identify the problem to be solved.  Why wouldn’t this be done before agreeing to an assignment? Know what you are getting into before your accept the terms from the client. How many more times are you going to say I wish I hadn’t taken this one or I’m not getting paid enough to deal with these nuances….train tracks, power lines, water frontage, busy street, swimming pool, large garage, In-Law suite, Private road with no maintenance agreement! Lowering the rate of surprises such as these allows for appraisal work to be much more enjoyable. Know before you accept! If you identify the problem up front and are good with the assignment terms you will be a much happier appraiser.

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  6. Tom C says:

    Excellent article John J!

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  7. JAMES says:

    I HAVE BEEN APPRAISING FOR 31 YEARS IN JUNE 2017. THESE ARE THE SAME ARGUMENTS THAT HAVE BEEN GOING AROUND SINCE I STARTED WITH MY FATHER, WHO WAS THE CHIEF APPRAISER AT HUD FOR A NUMBER OF YEARS. I WON’T SAY WHERE THIS WAS. I WAS AT A MODEL HOME THE OTHER DAY TALKING WITH A SITE AGENT OR A PERSON I THOUGHT WAS A REAL ESTATE AGENT. AFTER A CONVERSATION WITH THIS PERSON, I FOUND OUT THAT HE WAS NOT AN AGENT AT ALL AND I HAD TO SHOW HIM WHERE THE COUNTY RECORDS/WEBSITE WAS. HE STATED THE HE WOULD BE THAT MOST OF HIS CO-WORKERS DIDN’T EVEN KNOW THIS EXISTED. HE HAD NEVER SEEN IT BEFORE. I FELT LIKE THE WHOLE CONVERSATION WAS A WASTE OF TIME.

    THE MORE EDUCATION WE RECEIVE ALLOWS TO US AS APPRAISERS, TO BETTER EDUCATE OUR CLIENTS AND OTHERS IN THIS PROFESSION. IF MORTGAGE CO’S & THE AMC RECEIVED THE SAME EDUCATION WE DO AND THE TIME SPENT WITH CONTINUING EDUCATION, I THINK THE APPRAISAL PROFESSION WOULD BE A MUCH BETTER AND INFORMED PLACE TO DO BUSINESS.

    WHY HAS THIS NOT HAPPENED OVER THE PAST 30 YEARS?

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    • Diana N. says:

      Because they don’t care, and as long as the machines will do their work, and the Feds approve it, they don’t have to learn..

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      • JAMES says:

        I’VE BEEN INFORMED THAT A PERSON DOES NOT NEED TO BE LICENSED IN VA TO SELL HOMES FOR A BUILDER IN THE MODEL HOME. THIS IS BULL _ _ _ _. IF WE CAN NOT COUNT ON OTHER AGENTS IN THE PROFESSION TO LEND SUPPORT WHEN IT IS NEEDED AND CERTAIN APPRAISALS, WE’RE FIGHTING A LOSING BATTLE. IT IS A DAMN SHAME IT’S BEEN LIKE THIS FOR SO LONG.

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  8. James, with online mortgage companies many so called Loan Officers do not even have real estate licenses. Question is why your state allows unlicensed sales people to even sit on open houses for new home sales in the first place?

    If the related entities we deal with will not even comply with the relatively few laws governing them, why would we think they’d bother top learn our jobs too? Good suggestion, but I don’t see it happening anytime soon.

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    • Diana N. says:

      Mike, great job as always, but  read my reply to James.

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      • Got it Diane & concur. Question remains (as with most things affecting our profession) is (1) CAN we change it; and (2) how to best go about doing it.

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      • Diana N, says:

        Mike, I honestly don’t know. There was a loose knit appraisal organization started in CT. it never seemed to get off the ground, so we here in CT have no one to speak in our behalf in Hartford regarding changes that will dramatically effect the way we do business. I also learned that when the appraisers around the country got bitten bad by ES Appraisal Services and Chase, myself included, the state of CT did nothing to help us out. Anyone doing mortgage work is at the mercy of AMCs and judging by the outcome of ES I guess they know they can get away with most anything.

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      • Jack Of All Trades says:

        And they also sit around in a yacht, smoke high end cigars and laugh at us all day.

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    • JAMES says:

      I APPRECIATE YOUR RESPONSE. IT’S A ROTTEN SHAME THAT LICENSED AGENTS ARE NOT AT THE BRAND NEW SUBDIVISIONS IN THE MODEL HOME. I WAS BESIDE MYSELF WHEN I FOUND THAT OUT. I WAS TRULY AMAZED THAT THE KID THERE DIDN’T EVEN KNOW ABOUT COUNTY REC’S.  HE REFERENCED ZILLOW SEVERAL TIMES AND I JUST LAUGHED.

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  9. Wayne Courtney says:

    Hello Mike and my other buddies!

    All of you know that I am a bit of a loose cannon as far as comments concerning appraisal requirements and profession. I have  strong rooted opinions regarding this profession based on over 40+ years of playing the game. I really wish to be of benefit to our occupation. After 40 years I SEE someone wanting to COACH us….I really want to puke!  Really…If you want to spend your money for that crap go for it! I really have NO problem..spend your money over and over again…just your opinon….I would not do that but go for it it!

    If he wants to charge you a fee  for him to have you coach yhrm…that sucks

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  10. Diana N. says:

    James, I have been getting e-mails and cards from an appraisers who claims to be making an average of $5,634 a month for doing Desk Appraisals, he even send an audio. One appraiser claims to have done 45 jobs over 4.5 days. What’s up with this, I won’t print his name unless I’m asked to, don’t want to give him any publicity. What does everyone think of this ???

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