Texas Appraisers and AMC 2015 Survey Report

The Texas Appraisers and Appraisal Management Company 2015 Survey Report

In January and February 2015, the Texas Appraisers and Appraisal Management Survey surveyed a total of 1,421 Texas appraisers and 55 appraisal management companies doing business in the state of Texas. The questions in the survey were specifically designed to achieve the following:

• Clearly distinguish between the fees paid to appraisers by Appraisal Management Companies (AMCs) and fees paid by non-AMC clients for residential appraisals.
• Capture any difference in fees paid by property type: single family, condominium, size or square footage, or other factors.
• Capture the impact on fees by market area or locale: urban vs. rural, (MSAs, county, zip code, etc.).
• Determine whether appraiser qualifications (experience, education, specialization) impact fees paid to appraisers.
• Determine how far the appraisers travel for an assignment; and if from another state or distant region, how much time they spend gathering the data for the appraisal.
• Determine what fee structure the AMCs offer appraisers for residential appraisals.
• Determine whether those fees vary by property type.
• Determine if there is a difference in the fees they pay based upon urban, rural or other location factors.
• Determine whether AMCs pay differing fees to appraisers based upon their experience.

A brief highlight of the survey results follows:

• The vast plurality (41 percent) of respondents completed assignments within 50 miles of their cities, which was similar to the number reported in 2012 (42 percent). In addition, 16 percent completed assignments within 100 miles of their cities, while 10 percent completed assignments regardless of their location. Both of them were the same as the results in 2012.
• 25 percent of respondent appraisers did not complete assignments for Appraisal Management Companies compared to 5 percent who exclusively did. 38 percent of respondents completed at least half of their assignments for Appraisal Management Companies, whereas 51 percent completed half or less. The percentage in 2015 was similar to the proportion of 2012 that 41 percent of respondents accomplished at least
  half of their assignments for Appraisal Management Companies and 57 percent accomplished half or less.
• 15 percent of respondent appraisers completed appraisals exclusively for lenders, individuals, or other non-Appraisal Management Companies, whereas eleven percent did not complete any appraisals for them. 47 percent of respondent appraisers completed at least half of their assignments for lenders, individuals, or other non-Appraisal Management Companies and 51 percent completed half or less. The percentage in 2015 was similar to the proportion of 2012 that 45 percent of respondents accomplished at least half of their assignments for lenders, individuals, or other non-Appraisal Management Companies and 52 percent accomplished half or less.
• The majority of respondent appraisers received between $300 and $450 for residential appraisals from Appraisal Management Companies. By contrast, they received between $350 and $450 from lenders, individuals, or other non-Appraisal Management Companies. The amount of fees received by respondents for residential appraisals from Appraisal Management Companies and from lenders, individuals, or other non-Appraisal Management Companies in 2015 was not much different from that of 2012.
• Respondent appraisers reported that factors that would likely lead to an increased fee included a complex property (88 percent), a property that would require greater travel to complete the appraisal (80 percent), a large property (77 percent), and a property in a rural location (66 percent). The factors that would not affect the fee included a property in an urban location (80 percent), a property in a high cost-of-living area (55 percent), a property in a low cost-of-living area (77 percent), a property with many appraisers in the area available to do the appraisal (69 percent), and an appraiser with greater experience (51 percent). Very few factors would decrease the fee, but 12 percent of respondents stated that having many appraisers in the area to do the work would decrease their fees. On the whole, the findings from the 2015 survey were the same as the results from the 2012 survey.
• All Appraisal Management Companies reported that the complexity of the property would cause an increase in the fee followed by 83 percent citing the location being in a rural area and 78 percent indicating the large size of the property as affecting the fee. 70 percent of Appraisal Management Companies also pointed out that an increase in fee was also related to a greater distance traveled to complete the appraisal. From the perspective of Appraisal Management Companies, the factors that would not affect the fee included a property in an urban location (100 percent), a property in a high cost-ofliving area (70 percent), a property in a low cost-of-living area (98 percent), a property with many appraisers in the area available to do the appraisal (85 percent), and an appraiser with greater experience (74 percent). Similarly, very few factors would decrease the fee, but 13 percent of Appraisal Management Companies demonstrated that having many appraisers in the area to do the work would decrease the fee. In general, there was no much difference in the findings between 2012 and 2015 except that all Appraisal Management Companies thought that a property in an urban location would not affect the fee in 2015.
• According to survey of Appraisal Management Companies, the most important factors influencing the selection of a residential appraiser were the appraiser’s proximity to property (86 percent), followed by the appraiser’s experience and reputation for quality work (equally 84 percent). Moreover, three-fourths regarded the appraiser’s previous experience for their companies as important when selecting a residential appraiser. Compared to the results in 2012, the findings were different that the appraiser’s proximity to property and reputation for quality work became more important when selecting a residential appraiser in 2015. When asked which factor was the most important in their companies’ decision when selecting an appraiser for a residential appraisal, 44 percent of Appraisal Management Companies regarded the appraiser’s reputation for quality work as the most important, which was the same as the result in 2012.
• 80 percent of respondent appraisers reported that their higher fees were due to refusing to work for less. Nearly two-thirds (64 percent) stated that more experience was the reason for their higher fees. 40 percent responded that having a specialization allowed them to charge higher fees. The findings in 2015 were identical to the results in 2012. By contrast, slightly more than half (51 percent) of respondents reported that the main reason for their lower fees was due to the fact that they accepted lower fees to make sure they had work. Compared to 2012, the percentage has decreased by 16 percent in 2015.
• 46 percent of Appraisal Management Companies indicated that the Market Conditions Addendum increased the fee they paid for appraisals, whereas 39 percent stated that the Market Conditions Addendum had no influence on the fee. The former was higher than that of 2012 by 6 percent, and the latter was lower than that of 2012 by 12 percent. It is noted that eleven percent of Appraisal Management Companies said that they had never paid an increased fee for appraisals due to the addition of the Market Conditions Addendum in 2015 and the corresponding figure in 2012 was zero.
• Only 14 percent of respondent appraisers said that they received an increased fee for completing market conditions addenda, whereas a great majority (65 percent) of respondent appraisers did not. The findings were similar to the results in 2012. Beside, only 17 percent of respondent appraisers reported that they always received an increased fee for completing market conditions addenda, which was the same as that of 2012.
• Slightly more than half (52 percent) of Appraisal Management Companies mentioned that appraisers turned down appraisal assignments for them because the fee was too low, which was lower than that of 2012 by 12 percent. Besides, 46 percent of Appraisal Management Companies had not chosen an appraiser they previously worked with because the fee was too high, which was slightly higher than that of 2012 by 2 percentage points. However, a great majority (70 percent) of Appraisal Management Companies did not ask an appraiser to accept a lower fee than quoted for an appraisal, which was higher than that of 2012 by 5 percent.
• The vast majority (82 percent) of respondent appraisers had turned down an appraisal because the fee was too low. While 43 percent of respondent appraisers accepted a job with a fee lower than they wanted because they needed the work, 36 percent of respondent appraisers mentioned that they had to increase their workload to make up for lower fees. Nevertheless, slightly more than half (51 percent) of respondent appraisers thought that the increase in their workload did not influence the quality of their appraisals. Furthermore, three-fourths of respondent appraisers mentioned that they had not been chosen for an appraisal because their fees were too high. Overall, the findings in 2015 were similar to the results in 2012.
• Nearly all respondent appraisers (97 percent) hold a current license to conduct appraisals in Texas. More than three-fourths (78 percent) of respondents are male and 20 percent are female (2 percent refused to answer). 86 percent of respondents are White, whereas 6 percent of respondents are of Hispanic origin. 52 percent of respondent appraisers have completed a bachelor’s degree, with 13 percent achieving a master’s degree and 2 percent completing a professional or doctorate degree.

Texas Appraiser AMC 2015 Survey Report
 

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