you failed to mention one more example of why fees are not inline right now Mike, and thats the training of trainees. if a mentor is training a trainee, and they are being paid $300 for a 1004, and then are having to split that fee 50/50, they are both making $150 for that report. nobody in their right mind would do an appraisal for $150! what are they both left with after all expenses (taxes, insurance, electricity, heat, car wear and tear, e&o, etc) – $120?! $120 for six hours worth of work? there are plenty of other jobs out there that pay at least that, and dont carry all the BS like we have to deal with right now. this is how we attract people into the appraisal profession? this is how we expect to retain good people? this is how we make appraising attractive to future generations? really?

like you said, if an appraisal was billed at $650, and both parties made $325 each on a 1004, that would actually make it worth training someone. but i absolutely REFUSE to do it for $150, and i highly doubt anyone else in their right mind would either. and until that changes . . . . .

the bleeding continues . . . . .

“And so we keep on tweaking…”

~ Jocelyn Wildenstein

Tweaking Consultant For The U.S. Banking Lobby

Databases are merely information depositories (or suppositories depending on how they are used). Your views on advertising are spot on; though in our profession’s case it is coupled with that other form of influence; lobbying. Not ‘all’ of it is honest. OK, very little of it is. The whores that do the lobbying only want single issues; not complex solutions. They tell us Congress and Senate members are too feeble minded to deal with complex issues. Really? Maybe they just want to prolong the lobbying fees as long as they can.

In any case, the appraisal profession does not have a single unified voice speaking for it. We have disparate interest professional associations and state coalitions, but no one sending Congress a single unified message that protects ALL appraisers. Each has their own sacred cows to be promoted. The Appraisal Institute greedily adopted appraiser assisted AVMs almost as soon as they were announced. How’s THAT working out for their members, and lenders? Promoted as a new source of revenue to augment existing income streams in tough times, it merely provided cover for lenders to reduce our primary income stream and replace full appraisals with computerized garbage no better than a ‘comp check’ even when “appraiser assisted.” By the way appraiser assisted in many cases is really secretary or other non appraiser clerk-performed and appraisers signed.

Lets top nibbling around the edges of known solutions. We don’t only need appraiser and AMC fees separated on settlement disclosure statements. we need complete pricing and fee collection autonomy. A practice that current FNMA guidelines prohibit!

As long as Good Faith Estimates are allowed that permit LOAN OFFICERS to make initial appraisal fee quotes to borrowers, we will never be able to set fees in accordance with the anticipated assignment difficulty. These brokers use their own good faith ‘judgment’ of what is customary based on the suppressed AMC fees they see most often. They tell the borrower his or her appraisal fee should be ‘around’ $450.00. OK, most of us would agree that’s reasonable for a non complex conforming limits SFR, but that fee ALSO includes the AMCs $150 cut! NOW we are stuck with $300 OR not accepting the work.

The very FIRST thing we need to do is set MINIMUM fees for non complex assignments across the nation plus variable state multipliers consistent with Federal Civil Service Pay multipliers.

For example California could be $650 which includes California high cost of living bonus of 27%. This is derived from federal GS pay scales (GS1131-7 to GS 1131-9) and time it takes to complete excellent quality appraisals plus costs of overhead and business. A GOOD appraiser doing three SFRs a week (8 hour days, 5 days a week) would gross about $1,950 a week or $7,800 a month. Netting somewhere between $5,000 to $6,000 for a home office single person fee shop. About $4,000 to $5,000 for small professional commercial office space in average locations.

More complex assignments requiring more than five years experience and a certified level appraiser would be higher. A 20 year mixed residential and commercial appraiser would earn (gross) somewhere in the range of $80,000 to $110,000 with supervised trainees.

Additionally there are many abuses to be resolved at the same time. Stronger, meaningful CRIMINAL penalties against either AMCs of their lender owners for intimidation. Differentiation between relatively non significant technical errors in state investigated reports versus fraudulent or truly ethical violations involving outright dishonesty rather than the “pile on” compounded system of “offenses” that currently is used. USPA are principles. They are NOT always black and white facts found in the marketplace. CE training should cover at least 50% NEW MATERIAL rather than the same regurgitated courses taken repetitively due to cost and time considerations. USPAP does NOT need and should not be modified every two years. Real principles don’t change with business whims or regulatory trends.

They are CORE principles that should have long term consideration of consequences before they are changed.

Lets acknowledge that AMC use by lenders and FNMA has NOTHIGN to do with appraiser independence. Lets admit is purely to enable large institutions to do away with having many regional and local appraisal departments staffed by qualified people. That’s OK. AMCs can still be used. Just cut out the dishonesty in their justification. Many smaller ones are run by hard working appraisers now and have informed staff on hand to do review. Others are merely profit centers for huge corporations (lenders or title companies)where stand alone bottom line profit is the prime consideration…coupled with making the corporate client ‘happy’.

JOIN ME in the American Guild of Appraisers (AGA) of the OPEIU AFL-CIO. We are a new kind of Professional Guild. We will work WITH business to seek and find win-win solutions that meet all our needs. After all, we are professionals and business owners ourselves. We KNOW profit is a requirement of ALL businesses – even ours!

Mike Ford, SCREA, AGA, GAA, RAA, Realtor

California General Certified R.E. Appraiser

Chairman, Appraisers Guild National; Peer Review Committee

http://www.appraisersguild.org