Appraisers Need to Rethink How to Conduct Business
- Federal Valuation Agency Impact on Appraisers & the Public - July 22, 2022
- Is Georgia Going Rogue? - June 13, 2022
- Bias in Automated Valuation Models - February 28, 2022
AMC apps and text messaging does nothing but promote fast and cheap.
Last week we learned of a lawsuit file by an appraiser against an AMC and its owner. The allegations are his personal and business email accounts were illegally accessed and the investigation lead back to an AMC located in Rockville, Maryland and its owner. (You know who it is, no need to mention any names.) This news angered many appraisers as our personal space, property and livelihoods have been violated.
In case you missed the story, you definitely want to learn about it. There are several good sources that have revealed the details. Here are links to them: Voice of Appraisal with Phil Crawford, Housing Notes by Jonathan Miller and Appraisersblogs.
Technology has changed how we all conduct business. Websites, emails, digital photography, GPS systems, MLS systems, laser measuring devices, smart phones and mobile report completion. Even the way we deliver the completed appraisal report has changed. Don’t get me wrong, the advances we have today are great. However, as with anything in life, there is risk. Are appraisers ignoring risks in our day to day activities?
Some AMC’s send text messages to appraisers for assignment acceptance; others have developed their own apps that are installed on our phones. Many AMCs and portals even charge the appraiser for accepting and uploading the order.
In some industries, the use of apps makes sense; Uber drivers, day laborers, and dating and “hook up” sites require an instant response. An app makes sense for those industries. Appraisers are licensed professionals and provide a professional service. There are no professional industries that operate with fast and cheap mentalities and the appraisal industry should not either. The appraisal is the key component to the largest financial investment of consumers. The appraiser should be properly vetted and the agreement to complete the appraisal assignment should be a mutual decision based on communication, research and knowledge. Fast and cheap is harmful to consumers, neighborhoods and the industry. Communication, research and knowledge are all missing with AMC apps. Why would any professional appraiser subject themselves to be abused by AMC’s in this way? Don’t appraisers get abused enough from others?
Prior to AMC’s becoming popular, appraisers would receive an email or phone call and we actually had time to investigate the property to determine not only if we were competent to complete the assignment, but if we wanted to complete the assignment. This crucial form of communication is a far superior system and actually protects the consumers, lenders and investors. There is significant benefit to the appraiser as well. AMC apps and text messaging does nothing but promote fast and cheap.
The bigger question to ask yourself: Are you giving the AMC a way to access your email, contacts, and photos, etc. through these apps? Even worst, what about banking information? How many appraisers give the AMC their bank account information or credit card information? Did you have a background check performed on each and every employee that works for the AMC? Are they bonded? Did you ask the AMC for references? How is your personal information secured? How much risk are you willing to take? How secure are these AMC apps?
Remember, The AMC needs the appraiser more than the appraiser needs the AMC! It is your business, your data, your privacy. Keep it yours and run your business your way!
Don’t forget the very important first step to security, utilizing an EIN#. I’m surprised to find some appraisers still furnish their SS#’s to anyone. As a small business person claiming 1099 income, using an EIN on your W9 is the proper choice. You are still a sole proprietor and the EIN simply gives you an alternative to furnishing an SS#.
I couldn’t agree more, imagine an accountant or an attorney getting an e-mail blast order, how quick and how fast can you get this done? Quality be dammed! (I see this 1st hand every day, my father is a real estate attorney and vets every potential client/property every day, to see if it is worth his time and aggravation and how much to charge.
When I last did AMC work 6 to 7 yrs ago, I always insisted they send me my check snail mail, I would not give them my bank accountant information. (they always insisted on direct deposit, saying I would get paid faster, but I told them this is safer for me. I still prefer this way now with my clients, since there are too many hacks these days. (even Google with their Google docs which looked like the real thing, got many people this past week)
As for the e-mail hack by we all know who, just terrible and petty! I’m sure he will get his comeuppance. (just one lawsuit after another for that SHOP!)
Demanding old fashioned engagement is very protective towards the appraisers personal interests. No broadcast please. Paper checks only please. Full 7 days minimum turn time, add 3 days tat per additional order carried please. No acceptance or upload charges please. Inquiring about the distribution companies policies regarding fee raking and sharing is essential. Or cutting the various forms of middle men out of the picture also helps simplify the process of qualifying better clients. For all this tech capability of assignment companies and lenders these days, the tech that benefits the appraiser first and foremost is typically absent. To me, mobile devices still don’t make sense. I see them as functionally restrictive and I remain mystified why the supposed tech geniuses of the world trade mobile convenience for raw power, lower cost, and uninhibited PC functionality at the desk. An app is merely another in a long line of simple coded programs and a clever way to monetize what should have been free cross platform sharing in this age of advancing technology. aka; Moores law.
The appraiser in the lawsuit may also now be getting retaliatory action from a member of his state’s appraisal board that is ostensibly chaired by a close personal friend of the AMC owner involved in the lawsuit.
Clearly that state has built in conflict of interest issues as long as that Board Member is serving.
He owns his own firm which purportedly specializes in pre listing appraisals (tending to be high according to reports), which are then advertised in the mls when the properties are listed for sale “XYZ Appraised at $xxx,xxx” with XYZ being his company.
Appraise it for less than his firms unsupported values, and risk a complaint being filed which HE IN TURN HANDLES!
What could possibly go wrong?
The Governor of Georgia needs to rethink his appointments as well as policies that permit clear conflicts of interest by regulatory Board appointees.
Doesn’t surprise me…
I keep watching hundreds of appraisers dropping out of this profession each month. It seems that will be a problem at some point. Our office just deletes any email from an AMC requesting an appraisal. You guys/gals can work with this scum clients all you want. Some of us will not! It is going to be interesting to see how all of this works out in the very near future. AMCs cannot continue in business unless YOU (appraiser) earns their money for them.
Do you feel used?
I am in California, and let my Certified Residential License Expire August 2015.
I had renewed it and let it expire twice before, hoping things would improve.
I am pretty sure, I will let it go for good at this point. I am almost 50 years old, and see no reason to appraise for such low fees.
I quit appraising after the Home Valuation Code of Conduct (HVCC) and the mass shift in work to be filtered through an AMC, basically after the financial crisis and the creation of the resulting legislation.
We saw fees drop from $350-$400 for basic Single Family, to $200 or less, based on the new reverse bidding at the AMC’s. From what I understand, fees are back to as much as $325-350, but still far less than where we were 10 years ago taking into account inflation and increased addendums, electronic reporting, shorter turn times, etc.
The legal contracts that AMC’s seem to want an appraiser to sign off on, are also too much for me.
So anyway, I will keep my broker license active until I am an old man, but this nearly worthless appraiser license can go to the scrap heap in August. Sad, since I like to think I used to be one of the good detail oriented appraisers, which doesn’t matter in this day and age of low bid rules.
Mark just read comments. Even if lapsed, you can still renew for what is essentially a nominal penalty fee and some additional CE courses. Call and check.
As a licensed Broker, also being a certified appraiser simply lends more credibility to you as a broker. Do a few specialty assignments per year to relieve boredom, or pay for the cost of the license such as legal work; proposed projects, estate tax/or establishing new basis, or some other aspect that pays decently without all the baggage of loan production appraisals.
You’re only 50. God willing you may choose to stay active through your early to mid 70’s. Your license is simply another arrow in your experience quiver. Good luck!
That’s not good, sorry to hear that. In Colorado our amc regulation came with some sort of prohibition against indemnity agreements. Despite the fee and sourcing issues that single rule saved the day for many Colorado appraisers. I remember sending back return letters at first, I don’t have to sign that. And then eventually I was able to sign up without having to agree. It’s like night and day. Mike bumped this thread and I’m with him on this one. Times have changed rapidly, a lot of new direct assignment leads in 2017. This is a result of sourcing issues in the hot states like tx, co, or, etc. Lenders know that one area is hot, then not, and such localized growth can and will consistently move from one locale to the next. The whole point of origination is to strike the iron while it’s hot in the popular areas. So it makes no sense to constantly place your company in a disadvantageous position against your competition who is turning deals, is sourcing appraisers, and is not using amc’s. I’d say test the waters and don’t walk away just yet, at least make some calls. The thing about quality appraisal is the long term effects. The money makers in the appraisal industry are often like shooting stars, here today, gone tomorrow. Tech may help with speed, but it is not helping very much with lasting approval and quality control issues despite how much R&D they put into it.
Appraisers who accepti low fee assignments from AMC’s are enablers and their own worst enemies. AMC’s are simply taking advantage of appraisers fighting one another to the bottom with no cohesion or strategic plan. PIW’s will further contribute to AMC failures and bankruptcies leaving the appraisers holding the bag. Automation is first your friend and can later become your competition.
Craig, you are right. I’m not sure when automation / computers and “Big Data” stopped being our friend, and became our burden. Perhaps as far back as 1993 or 1994.
That seems to be about the time all the software developers at the largest appraisal form providers starting creating all the hybrid boutique products for lenders that couldn’t abide the idea of being constrained by that pesky USPAP thingy.
It was also around then that appraising transitioned from using the three best comparable sales as an accepted norm to four being routinely required; as if a fourth less than best comparable somehow added some extra measure of safety in all appraisals. Thank you GMAC and LSI.
The we got away from 35 mm film and all of a sudden front, rear, street, LR, Ba and K & any specific problem area was no longer enough. I mean the added cost of digital pics was only an increase in ink costs. Until reviewers decided enough pictures sufficient for them to appraise the property were required.
Anyone remember feeding hard copy report pages into the proprietary Heyn / LSI ‘commuting’ machine system?
I don’t want to go back to pre technology days, but neither do I want to be the uncompensated administrative or secretarial- clerical staff worker for ALL clients.
If FNMA requires they be permitted to steal my work product, so be it, but don’t add insult to injury by making me pay for the privilege in upload fees OR added time converting to delivery systems that allow my report to be decompiled even further.
Big Data? Best I can say is ‘mis-used and misrepresented.
Just read that Core-Logic is continuing to expand. Its latest purchase has been for REITs in the prison system. These REITs amount 25% of Core-logic revenue.
Just think, how sore appraisers could complain!!!
I wonder if that is why they were downgraded? Anyway it’s 3:23 AM and I couldn’t find the REITs article you referenced reading