AMCs Add Weeks to The Appraisal Process?
By my math, this is a 18-day process… appraisal part only took 3 days as a rush…
Despite being approached all the time to add our firm’s name to an appraisal management company, we decline. However, when wealth management companies were forced by their parent company, they made arrangements to help attract better firms like ourselves to consider working with them:
- Pay our fee
- Respect our turn time quote
- Not inundate us with clerical addenda requests
Last fall we were approached by 4 different AMCs because their wealth management clients demanded they fix the problem of not attracting the better appraisers in their coverage area.
In the first three that onboarded us, we got a lengthy addenda request that included things like inserting the “floor” level” of the office address of the client in the report. I’d push back and request a conference call with all the parties and to their credit, they rethought the review process and we rarely see addenda anymore and when we do, its fair. That’s how it should be.
It also proves a very significant point – most of the laundry list items included in addenda requests are either over-interpreted or simply made to justify the AMC’s existence but on our time and money. They are not regulatory requirements that is claimed when appraisers give pushback.
The fourth of these firms finally on-boarded us and our appraisal timeline looked like this:
- Day -3 – assumed it took 3 days to find a cheaper appraiser since it was ordered as a rush (borrower wasn’t in a hurry)
- Day 0 Rush appraisal requested
- Day 0-5 days borrower allowed access
- Day 5-8 we delivered report 3 days later as quoted
- Days 8-13 reviewed by AMC
- Day 13 – AMC delivers a 30 point review of clerical fixes that had nothing to do with the multi-million dollar valuation
- Day 14 – I send an email to both the bank and AMC requesting a call to discuss review process. AMC responded that chief appraiser would review
- Day 15 – no response yet
By my math, this is a 18-day process although we don’t have a response yet. The appraisal part only took 3 days as a rush.
Here’s a redacted partial (admittedly terse) response –
if [XXXX] continues to apply this approach to the high-end review function, we will no longer continue to accept assignments or will simply triple our fee quotes to reflect the incredible amount of time needed to complete the requested clerical busy work.
I’d be happy to discuss this issue with you and members of the [XXXX] team to resolve this relationship… Let me know how you would like to proceed. We’d love to continue to work for you and I’m sure your high-end clients would like for you to continue to rely on our services.
We don’t have this issue with lenders we deal with directly. Read more »
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I love the article. However, sending an email like this to vendor management (speaking purely from a residential perspective), results in a) circular file b) response from AMC monkey asking you if you are requesting to be removed from their panel – without any acknowledgement of the subject matter or c) a phone call from vendor management reiterating option b. You see, the AMC business model is not relevant and like a schoolyard bully, they take their fears and lack of self-respect out on others. They cannot comprehend they have no relevance without us.
Oh yeah, they can put you on and take you off at will, no permission or notices required. If you’re not a large firm with some muscle to flex, send a letter like that, your login will suddenly not work and you’ll never see an order again. They’re sharing secret do not use lists and they’ll put you on it. Basically everything that blips needs escalated, that’s the only way an appraiser can speak to a qualified person. A constant catch 22. When you’re managing the ‘managers’, you know there is a problem with adequate personnel qualification processes.
Great points! I think independent appraisers need to push back and let the lending industry know how much time is wasted just on price shopping the order, to the LOWEST MOST INCOMPETENT appraiser. I no longer do AMC work, but I still receive blast e-mails from several, even though I’ve requested SEVERAL TIMES to be removed and I cannot tell you how many times I’ve gotten the same request 7-10 days after the initial blast. These are the same JACK WAGON AMC’s perpetuating the MYTH of the so called appraiser shortage. They can only survive by placing $250 orders while charging the borrower $500+. Since good appraisers will NOT stand for this, they are left searching, sometimes weeks to find the cheapest. How can this business model be allowed to continue??
How long will this business model last? As long as AMC’s continue to get appraisers to pay to play and as long as AMC’s spend more money on lobbying than appraisers do.
You said the key word lobbying. AMC’s are not only lobbying to plant their roots but also positioning themselves in the regulations boards as well. I just hope it’s too little too late
The AMC business model is a joke, everybody is aware of it. The AMC business model allows the banks and lenders to pressure appraisers using a middle man who probably is not responsible for any appraiser pressure. The old adage comes to mind……you get what you pay for. That is probably true in most cases but not in our line of business….lol.
We should get an undercover person into these companies, there is a lot which goes on behind the scenes which is not admitted publicly. Publish an article with a hefty whistleblower fee, someone from within the assignment industry will bite, they have as much turnover as the appraisal industry has personnel attrition.
I would chip in money to see that happen !!! Even though I refuse to work for AMC’s
On a happy note – If and when we get rid of the AMCs we can increase our fees by 50% because the public is now used to paying a much higher fee (our fee + amc fee). The process will be faster, more efficient and we get a raise!! We just got a new client that bypassed their AMC to save their clients money!! Finally some common sense.
I believe in keeping your friends close, but your enemies closer (monitoring purposes). An AMC has the answer as per an e-mail they said the following.
SPECIAL PANEL INVITATION.
“We’re anticipating significant volume from a new division of one of our existing clients. This opportunity offers a fixed fee of $325 for each FHA appraisal. If you are interested in these assignments and will accept the fee on standard properties, we would like to add you to this client-specific panel. Accepting this invitation will not change your fees for our other orders but will give you priority on higher paying assignments.”
Sooooooooooo lets all agree to work at high volume for $325 today (locally we charged $450 (FHA) in 2000), while acknowledging it won’t change our other fees, but we will get priority on higher paying assignments. In other words, work at gross fees from the 1990’s while paying business costs of today, and we make no promise to pay you higher fees on other assignments, but rather will make you and every other appraiser a priority.
Seek the truth.
I will happily pay you Tuesday for a hamburger today.
Appraisers could learn a thing or two from teachers across the country that are boycotting. Teachers are WINNING in every arena with their walkouts. Appraisers on the other hand have yet to figure out that they’ve had the power all along to solve their little problem.
This award goes out to the appraisal “profession”. For 9 long years I’ve been listening for the pop of enlightenment.