I Reserve the Right Not to Serve You Anymore
Dude, I Reserve the Right Not to Serve You Anymore! OK, let’s face it: real estate appraisers are in the service business. We provide a service – real estate appraisals. We provide those services to anybody willing to pay for them. That’s what service providers do. To which you say, “Dustin, you have a deep grasp of the obvious.” Well, let’s go a little deeper.
Part of what I do is stay in touch with local real estate brokers and appraisers. Some of us have a local restaurant we frequent. At the front door is a sign letting all patrons the management reserves the right to refuse service to anyone. I’ve never seen this restaurant refuse service to anybody. You don’t make money turning away customers, but the management of the restaurant reserves that right.
That realization got me thinking; do appraisers have the right to refuse to provide service to any potential customers? I surely hope so! And it is a right that I think sometimes we do not exercise often enough. Let me give you an example. To keep my finger on the pulse of what’s happening in real estate appraisal across the country, I spend time on Facebook and the other social media. Sometimes the comments on those forums can get really heated, with appraisers accusing clients, AMCs, lenders, other appraisers, and so forth of the most awful actions. AMCs are a favorite target of the vitriol on these forums.
Against the AMC industry in general appraisers hurl the accusations that the AMCs fees are too low, their turn-around times are too short, their stips are too frequent and stupid, and with their ROVs they send sales that are utterly not comparable. Clearly, they are just trying to force the value up to support the broker’s inflated listing price (thus inflated commission). Whether these accusations are true or merely appraisers’ pet peeves is irrelevant for this discussion. So let’s get to what’s relevant.
For the purpose of this blog, let’s assume these accusations are true. Let’s assume AMCs are Satan’s malevolent spawn. OK, there is not much we can do about that. But instead of bitching at them (uselessly and irrelevantly, by the way, since the lenders want their services), why don’t we just fire them? Why don’t we just refuse to provide them service, just like the restaurant does? Why don’t we take off our frilly pink tu-tus, put on our sweat- and grease-stained overalls, and get to work getting clients who recognize the benefits of our services?
This is not to advocate firing all of your clients between now and tomorrow morning. It does mean, however, sitting down with a list of clients, ordering them by the amount you billed them last fiscal year, and then firing the bottom 10%. Then it means the next time one of the surviving AMCs calls with a rush job and a low fee, you professionally reply that it will take X amount of days, and the fee will be X amount. This will get their attention.
If, after three more assignments that AMC sends your way it is clear they are not willing to compensate you to do the job correctly, then fire that AMC, too. Mules are generally stupid. But you hit one up-side the head enough times and they will generally do what you ask (if, for no other reason, so you don’t hit them again). AMCs may be smarter than mules, but they won’t change until they have a reason to change. And if you keep taking their jobs with low fees and short turnaround times, they are not going to change. And whose fault is that?
It’s OK to vent on social media forums. But venting (a passive activity) must give way to action, otherwise nothing will change. So refuse service to those who are not worthy of it. Then, actively seek out those who are worthy of it and provide it to them.
For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode 336:
- Be Nice or Be Quiet - July 2, 2021
- Being Liberal with Values Hurts Homeowners - June 28, 2021
- Why Are Appraisers Banned? - April 15, 2021
Don’t we all already do this, Dustin? Fire them, I mean. I fire anyone who is a pain in my ass. They only have to be a pain in my ass once…bam. Gone. I have plenty of work. I turn down plenty of work every day. The “bad” AMCs are the ones who use the newbie appraisers; the trainees; the hungry. And there will always be “the hungry”.
Maybe he’s late to the party. I had a bank tell me we bid to high, I told them we’re the best, not the cheapest. Let someone else work their deals for little pay. There’s more than enough work out there and I don’t want to play games if someone doesn’t grasp that sometimes you do have to pay more if you’re trying to underwrite a difficult property.
Did you ask the bank if that high bid was after the AMC hide their part of the fee with the appraisal fee and fleeced the home owner for an outrageous amount, because we don’t know since we are not allowed to include our invoice. What other business don’t want an invoice included. Can’t think of any. We need Cost Plus, Full Disclosure and Transparency.
The hypocrisy and ruthless opportunism of amc’s continues to shock and awe. They know very well that all these activities are deemed by various individual states as being consumer safety issues. In CO we are required by amc reg, to disclose our compensation amount if accepting from an amc. Amc’s can no longer try to force us to sign indemnity agreements to access the workflow. And like how one state has to include invoices, tech had a big deal about recoding their systems to allow that, yet nobody but that one state gets the benefit of this new allowance. The other state has rules the amc’s can no longer engage in limitless ‘potential order’ spamming. The next sought to force cost plus. The other, qualified review. The list if individual state amc regs is substantial, if they were ever to be compiled in total. Yet unlike the blanket application of FHA standards, meant for fairly balanced consumer protection for all, the amc complies only complies minimally and fights tooth and nail to avoid applying such sensible consumer protection standards elsewhere, furnish a different scope of work document there too. It’s an illusion and they know very well how corrupt their approach is, increasingly so do the employees. These companies don’t protect anything, they are predatory through and through. If they cared about consumer protection, they’d apply all these mis mash here and there state rules in uniform so we could all as a group benefit from the smart consumer protection applications laid out individually through various states.
Refusing to honor an appraisers request to opt out of a neverending stream of bid request emails should be a licensing violation. An amc suggested, and Scope agreed it would be better if I was delisted, removed from the appraiser directory, or added to their internal lenders do not use lists, as the only solution to make amc bid emails stop. The Corelogic option is accept the abuse, go out of business, or voluntarily delist yourself. Real world examples of how amc’s and their supportive tech industry partners ‘promote appraiser independence’.
Amc told me in email, they ‘mass grab’ appraisers emails from the Scope directory, then spam away sending that order email to every appraiser in that city, county, or even state, for every single ‘potential order’. And that’s just one amc, so many other ones have similar methods. That is not how the appraiser contact directories or the ASC database was intended to be used. The cumulative loss of total productive appraiser man hours is incredible. We may be the only industry in the entire country which is denied standard compliance with email opt out guidelines and anti spamming policies. Corelogic refuses to provide solutions. Other than that, refusing amc services was the smartest business decision I ever made. These are predatory companies.
“But instead of bitching at them (uselessly and irrelevantly, by the way, since the lenders want their services), why don’t we just fire them?”
That statement by the author is a bit ignorant. If we do not “bitch” at them they would not know we are upset. Seems pretty simple.
I already refuse to work with most AMC’s. The ones I do work with pay fair and quickly.
Now……go write something that helps appraisers rather than wasting our time.
What informative appraisal info have you wrote for us to read lately Scott?
Everyone has an angle and Dustin has a point.
I bitch a lot about what lenders send me to appraise, but we all can hit the decline button!
Scott What is the best way to fire them? I just repeatedly turn them down but it would be better to not have the emails. Do you tell them you are firing them or what?
I don’t waste my time w/AMC’s but I receive at least 20 fee and quote requests a day from AMC’s I’ve never heard of, and been receiving numerous requests for field reviews, from XYZ AMC, so shows you the quality of people they are getting is poor. I don’t even respond, but for those of you accepting this work you should be raising your fees!
There are certain builders and big shot Realtors I will not work for. If you cut them you get blackballed for the rest of your life.
I encountered a first after 20+ years of dealing with AMC’s and 30+ years in the industry. I quoted a fee on a significantly complex waterfront property to the AMC that commonly refers to me as “2k Mark”. After shopping my fee around for a few weeks and finding no one willing to accept this assignment for any fee, they came back to me. I accepted the assignment and contacted the borrower to schedule the inspection. Upon contacting him, the borrower stated the appraisal fee was “too high” and he didn’t wish to proceed at this point. I informed the AMC.
A few weeks later the borrower called back and stated he wished to proceed, so we scheduled an inspection. The borrower was on a phone call while I was completing the interior inspection, and I heard him state he had something he had to take care of and would call this person back. As I was leaving, I was effectively “ambushed” by the borrower complaining about the appraisal fee. He stated his lender told him he could “negotiate” this fee with me at the time of inspection. I explained to him this was something I couldn’t discuss with him, nor was any arrangement regarding the appraisal process between he nor I. He continued to plead his case, citing local “buddies” who got recent appraisals for less than 1/2 of what I was charging. I left, having stated I can’t promise anything other than “I’ll discuss this with the AMC”. This was obviously not an AMC issue. I declined to complete the assignment, as this was a clear case of regardless of outcome, the borrower was going to complain to the state board. Been down that road with my wife and her appraisal “complaint” and after 3 years the board found “You didn’t do anything wrong, but don’t do it again”. Don’t need that grief for any fee.
I still do work for the AMC, and for appropriate fees. I won’t do any work for that specific client, regardless of the fact they consistently specifically request me.
I don’t take jobs involving some big shot Realtors and some builders who build nothing down homes. If you cut them you get black listed. Better to let someone who will step over the line have them.
Recently a family member simply asked what current rates would be if she refinanced some property. She told the lender to direct any brochures etc to me as she wasn’t in the mood to basically be bothered with them.
Next I get a package from “Mr. Cooper” (a servicing partner or subsidiary /dba of Amrock) citing specific loan application disclosures (keep in mind no loan was applied for).
In the paperwork were all the TILA/RESPA replacement forms that used to be meaningful. One caught my eye in particular. It was the one that said “Charges which the borrower may NOT shop for a lower cost” .
It was the appraisal fee at $675. The lender disclosure form is telling us they have fixed that price and nothing we can do …in fact nothing we are permitted to do would change that fee.
Now the property involved is a duplex. $650 to $675 is probably a fair fee if 100% went to the appraiser. Certainly that kind of fee leaves no meat on the bone for the AMC.
Dustin, you are right that we can and should fire certain clients. But there are still others out there that are routinely violating federal anti trust laws (As Mr. Cooper the dba was doing in the above case).
As a property owner I think they should be turned into the feds (even if it is only CFPB)…though in this instance it would be HUD for deceptive loan practices and outright lying about the appraisal fee.
As an appraiser would I (hypothetically do the property involved for $675 (assuming I weren’t an involved principal)? If I were still willing to do lending appraisals, sure. Its a fair fee if it goes 100% to me. Would I do it for $500 or even $550?
Not a chance in hell.
I just finished the book, Chain of Title by David Dayen (2017) about banks and wall street mortgage fraud. As a new appraiser, I am glad I have this history lesson under my belt as I go forward and I hope you all have read it too. It was so stunning, could hardly put it down.
RB as a new appraiser the best thing you can do for yourself (aside from understanding what USPAP compliance means) is to take a webinar or course on what constitutes a bulletproof workfile.
Its the number one most common cause of sustained or alleged appraiser complaints that I see. Also in an odd way, understanding data that must be in your work file will help you avoid falling into the trap of impermissible short cuts that so many appraisers fall victim to.
When time permits, read FIRREA 1989 (Chapter 11), and Dodd Frank Act. Good luck.
Mike, do you have a particular webinar in mind? I would be interested.
McKissock has such a course (Workfile Requirements-counts for CE in my state); I am also a fan of Richard Hagars Courses via OREA.edu; Haven’t taken it but I’m told Tim Andersen has an excellent webinar-about 3 hours. I don’t think it gets CE credit but that is secondary to the quality of the information presented.
As I’ve stated already, the importance of this cannot be overstated. It is CRITICAL. (At AGA we have considerable experience with various state boards handling complaints. Most often it is not the original complaint that causes punitive actions. It is / are workfile deficiencies more than anything.
I go over specific reports with our AGA members before they submit their work files to discuss the specific types of things required to be in a workfile for a prosecutorial-minded state such as mine (CA). I usually don’t have enough time to go over as much as a good course does. Frankly, some instructors also teach it better than I do (In my opinion).