Bill, Id like to remind you (or point back to) a C&R fee proposal I drafted and submitted to the Feds over a year ago. It is designed to account for locational COLA differences.

If you (or anyone else) needs a refresher it can be seen at http://www.mfford.com or the Appraisers Guild Website at http://www.appraisersguild.org

Just skip to the last page for the summary. If that makes sense then scroll back and read specifically how that particular sausage was made.

Hey Retired. I understand your difference in opinion with me in the previous posts. I am no stock market guru….I have bought a dollar or two in companies that pay dividends. I enjoy the dividend payments into my account… Heck, they pay for me to cruise on board the Carnival Ship to the Carribbean. The Carnival stock also gives me an extra $100.00 on board credit each cruise. Not much…but I like it! It is nice to have money deposited into your account every month whether you are asleep or awake. Better than working for AMCs! LOL

You haven’t been paying attention for the past year Bill if you have not seen the reasonable side addressed. Its published. Its been submitted to the Board of Governors of the Federal Reserve; the CFPB and the appraisal sub committee. It was presented in person to the Virginia Real Estate Board where a lower rate and metric (VA fee) was already being promoted and that had a better chance of being passed

When links to it used to be published here, many appraisers responded with “By golly I’m not going to have anyone or anything set MY minimum fees!”

Read myth about free enterprise in this blog.

The wording of the law actually read “reasonable and customary” not customary and reasonable. Makes you wonder how the C&R phrase came about rather than it being R&C, right?

Customary was vague and ambiguous. The very method of determining it could be argued forever. Distraction from the banking and AMC industries. Look at the shiny baubles rather than the most important issue. In fact, rephrase it so the fact that customary is said first makes it the issue of concern in most peoples minds.

Reasonable on the other hand could be quantified too easily.

1. Is a fee that is lower than it was 30 years ago reasonable-No.

2. Is a fee for a professional service requiring a four year degree that is lower than a plumber or auto mechanic charges per hour reasonable? No.

3. Is a fee that is lower than the salary equivalent of a county tax assessor appraiser or state enforcement appraiser or federal appraiser with comparable experience reasonable? No.

The ‘R’ part of the argument is the ONLY part we should focus on or discuss as appraisers anymore.

Wayne, I don’t know about the standards board but the appraisal practices board has ONE (1) residentially oriented member on that board. She is an SRA and a great person…but she is ONE voice.

There are two business valuation representatives-one of whom is from Mexico and maintains her business address in Mexico. Seems very intelligent and sincere but I have to ask how and why a board member from Mexico fits into FIRREA and protection of AMERICAN consumers and taxpayers.

this is particularly concerning because business valuators (accountants really) and real estate appraisers have completely different techniques to applying approaches to value that we call by the same names. A BV analysts income approach would be considered blue smoke and chicken bones approach to a real estate appraiser. Its not wrong per se but it is NOT the same. The BV community is exerting undue influence on IVSC. TAF is about ready to adopt IVSC 2017 BUT should not do so. Problem is very few (TAF) members can articulate the reasons why this should not happen yet.

Its especially an issue in third world nations.

There is a business equipment or personal property representative and I believe two commercial oriented appraisers. I’d have to look the others up.

Point is that most of the ASB members do NOT do residential real estate appraisals; and several may share the same biases that the AI does toward non commercial work..

Bill you of all people really do have to read our (AGA) suggested minimum fee proposal which can be set for individual states or nationally. Its been submitted to the feds; Virginia commented on how thorough they thought it was before adopting the lower (easier to get passed) VA fee.

It is predicated on Civil Service pay scales and area multipliers as well as hourly time and appraiser experience. The multiplier range is from 15% to 31% California was a 27% and Virginia was about 24%. No area is lower than 15%.

Let a trainee inspect property by themselves and a fee of around $500 to $550 could be reasonable (anywhere). Require a certified and it goes up. Require a certified for a complex assignment (time) and fee goes up.

http://www.mfford.com or http://www.appraisersguild.org just jump to last page. If it is interesting to you go back and read the in between explanations.

I don’t do much (hardly any) AMC work so take this with a grain of salt. I quote ALL SFR/Condo clients 10 to 15 days. 10 working days excluding weekends and holidays OR 15 calendar days.

I usually quote LRES $1,000 to $1,500 fees and 2 to 3 weeks turn times on there constant rush orders. I’m going to be in trouble if they ever accept.

I don’t want their business. Unless Im broke after bills and nothing is in the queue I simply wont do a five day turn time. I explain that while I CAN, I also insist on enough time to do a cold review after a couple days where any errors will literally jump out at me versus a ‘hot’ review where my eyes may see what my brain meant to write rather than what I actually did write.

Baggs, The dirty little secret of the AMC industry is that many use undisclosed kick backs on a per assignment basis to the people making the selection of which AMC to use.

Sometimes this is a direct split from the sales person for the AMC with or without the AMC knowledge. Example: AMC pays sales man $35 to $70 per order (based on volume produced). Sales person tells VP at mortgage brokers that he will kick back $20 to $25 (actually the numbers are much higher in the real world). I ‘ve heard of the kick back amount alone being as high as $75.

it explains why some of these completely off the wall companies that only work for a couple lenders are able to ‘compete’ with the big boys in the AC world; or why despite terrible report quality they stay in business.

The VP authorizing the order for 100 appraisals a month is getting an extra $2,500 to $7,500 a month.

The bank may also tell the AMC that they have to do all this for $495 to $550. AMC MUST get $75 net profit per order after kick back and sales commission. They’d prefer to get double that.

So they take $150 for themselves; $75 for the VP and $25 for their sales person…appraiser only has $300 UNLESS he can cut into that $150 the AMC wanted to keep for themselves. The AMC really needs nearly 1,000 a month rather than 100 to maintain these kind of payouts.

Until the fee is removed from TRID limits and guidelines ad until the fee paid to an AMC becomes market driven cost plus arrangement, this will not change. AMCs don’t set the total appraisal fees. The banks and mortgage lenders do.

I am glad to hear some of you all are getting better fees and terms but what happens when rates go up and refis go away and sales are fewer.

It is a permanent rat race they put everyone on unless you have a private client base.

Good Luck

If you guys want to work with the AMC scum… that is totally your choice. I do not give a damn what AMC you work with. If you want to do so…that is your choice and I wish you would not do such…but your choice!

I turned 65 today and all I want to do is play. I have done the appraisal of the explosive manufacturing facilities, the steel plating facilities, the high rise office buildings, the flood plain, right-of-way, construction easements, slope easements, the national guard armories, etc, etc. all I want to do is make a few bucks to pay for the next cruise! I want to play and have fun…you guys do whatever you want! A few nights ago I was at the steak house on board the Carnival Breeze…an 18 oz rib eye cooked to perfection with french onion soup, cesar salad on and on…$35.00 per person…. Are you really dealing with some pitiful AMC clerk telling you how your report should be prepared? Really? Have you completely lost your silly mind? Grow a pair!

Totally up to you…grovel at the feet of an AMC or play any game that is offered.

I have no degree in finance. I do love to play the game! The computer generated “sell, sell, sell” that is a part of the computer finance game is funny.  Great Britain dropped out of the European union and Kinder Morgan stock took a hit. Does Kinder Morgan have any pipelines in Europe? What about Old Republic Insurance? They do title insurance of property in the US…why did they take a hit? You have to admit that it is a very fun game!

If lenders do away with appraisers as you seem to think will happen it will be a wonderful world again. I remember in my youth that banks and savings and loans were ruled by the “loan committee” these folks were the dude that owned the Ford Dealership, the State Farm agency, etc. etc. They had absolutely zero clue about real estate valuation. That was the way it was back then. If I could only go back to those times, knowing what I know now….I would be as rich as Donald Trump!

Valued Veterans: “Schedule this immediately or we will reassign the order!”
Me: “Good, reassign it, don’t call, don’t write.”
Follow up: “Please could you keep this order please.”
Me: “Too late, already filled that slot. Again, don’t call, don’t write.”

Senior person wrote me to apologize for the employee stiff arm. Too bad, they should have hired better trained more professional staff to begin with. When a know nothing unlicensed fresh brookie green thumb greenhorn newb jr office cubicle worker thinks I’m the one to push around, well, there is a reason I refuse to work at the office any more. 

When computers replace the appraisers, there will be no effective check and balance system in place and consumers of mortgage products nationally will be irreparably harmed.

This appraisal business is a very good business. Do not let the nay-sayers tell you different. Just do not be a chump and be a slave to the AMCs… Think about all of the users of appraisal services within your market area and go after those folks. I paid dues for years to organizations that promoted designations that I do not have. I paid for subscriptions and publications prepared by folks that do not even do appraisals. I decided to spend that money to market my own business and it works just fine! Good luck to you!

Bagins:

“Buried by the same algorithms which things like trading rely on. Just this week we’ve learned facestupid routinely censors conservative opinions. You’d never know that though, if you only acquired your information from facecrook. They promise to adjust the algorithms, yeah right. The writing is on the wall regardless of which industry you choose, corruption is rampant nationwide.”

i am not sure what you mean by all of that. I am not a very good investor but take a look at DBD… Paying a yield of 3.22% for the past 61 years; or NWN paying 4.33% for the past 59 years; PG paying 3.34% for the past 58 years… on and on and on… There are many Champion Dividend Stocks… Take a look in that direction if you want to secure your retirement. Wish you the best… hope to see you on the next cruise!

Retired Appraiser,

I share your disappointment in our industry. I do see your point of view but I believe that the total responsibility lands with the individual appraiser. NO BUCKS… NO BUCK ROGERS…. If I do NOT accept an assignment then the AMC cannot earn their fee unless YOU accept the assignment and provide them with an income. it is NOT me that is keeping these parasites feed!

Honestly, there are so many sources of work for the typical appraiser I do not see how any of us are out of assignments. We have been misled to believe that the AMC way is the only way. If that was true I would been out of business a decade ago instead of busy as hell!

It appears that we may soon have more AMCs in control of our industry. Unless appraisers can come up with a way to rid our industry of the plague of these AMC taskmasters our numbers will continue be reduced. The current information indicates that as of 12/31/2015 there were 76,800 actual appraisers. This number is decreasing at a rate of about 3% each year. With approx. 64% of this number being over the age of 50 the number of appraisers leaving the industry may increase. The study indicates that of the total only 31% prepare residential appraisals.

There are many who believe that computers, etc. can and will take the place of appraisers. That may happen one day for the mortgage lending industry. I do believe that we will most certainly see more changes to come!

I had to give you a thumbs down Ralph as your statement is incomplete. Although it was not a true free market at the time, prior to HVCC the business models that were in play often determined varies fees from company to company for the same work (in theory). Overnight, the number of appraisers did not change, nor did the available work, but yet our service was suddenly seen as equal and we were lumped in together with that individual appraiser. If I had a company of 10 seasoned appraisers, varying local officers, a regional presence, could be present for monthly meetings at local bank/lender branches, etc. then by skillset was visible and my higher fees were a bargain. The supply used to be skilled offices/appraisers versus rookie individuals, and the demand used to be experience versus no experience. The business model was blown apart by way of not being able to transfer appraisals (inter-office), thus we have all been lumped together.

One key point there Retired. Insider trading fraud is very real. From everything form algorithmic structure and alerts, all the way to nefarious NSA style phone tapping and systemic misuse of such informational privilege, there is probably more insider trading than not these days. I dismiss that entire argument about the relevance of mass data with a simple yet logical point; You’d have to trust the programmers behind the data, in order to trust the data itself. There is no such thing as basic real estate valuation. It’s a people business and until computers walk, talk, smell, and have logic equivalent to a human, they will never be effective substitutes for a human.

If you thought fraud with humans involved was a big deal, just wait until you read up on fraud involved with automated systems. It’s always right there under the surface, you just have to look for it. When using google, try applying these fun keywords after the end of any research request:  hack, crack, whistleblower, fraud, complaint, legal case. Any number of disclosures come towards the top hits, which you would otherwise never see as they’re purposefully buried in corporate based web searches…. (Drumroll……)  Buried by the same algorithms which things like trading rely on. Just this week we’ve learned facestupid routinely censors conservative opinions. You’d never know that though, if you only acquired your information from facecrook. They promise to adjust the algorithms, yeah right. The writing is on the wall regardless of which industry you choose, corruption is rampant nationwide.

Ron Paul: We should not reject free market principals, because the truth is we have not had that.

We are in a constrained controlled market without an effective advocate. Appraisers used to be their own advocate. Now that a decade has passed, I see why HVCC rolled out the way it did. Lenders wanted insulation from independents, but sold the package the exact opposite as if such insulation was good for appraisers. In the moment a distributor whom hand to answer to the lender was in place (amc or not), the appraisers lost their only advocate, which was themselves.