Ask & You Shall Receive – VaCAP
Smoke & Mirrors? Could it be as easy as updating your fee schedule?
I got an email from an appraiser today. The only thing the email said was “Call Me 804-XXX-XXXX”. The email had a read receipt attached to it . My first thought, “What did I do now?”. With hesitation, I called the number. The appraiser said, I have to share something with you, but you have to promise not to mention my name or the AMC. I agreed.
The appraiser received an order request from an AMC for a fee that was low, but not nearly the lowest we have ever seen. As Virginia just passed the Veterans Administration Fee Schedule as a base guideline for determining customary and reasonable fees, the appraiser accepted the order and then called the AMC. The discussion went like this:
Appraiser: My base fee is $XXX. What do I have to do to get that fee?
AMC: You just need to update your profile to reflect the higher fee.
Appraiser: That’s all? How do I do that?
AMC: Log into our portal and update your fee schedule.
Appraiser: OK. Thanks
The appraiser logged into their portal and updated the fee schedule. Within a few minutes, the order was changed and the new fee was reflected on the engagement letter. Could it be true? Ask and you shall receive.
There is only one way to find out!
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These fee schedules and concepts behind their scaling, were developed under an entirely different working climate for appraisers. The concept of the fee scale at 400/450, from a decade ago, and even 350/400 from prior periods, was the highest average fee, so lenders did not have to deal with sudden paperwork changes and unpredictable fees. The highest reasonable fee became the appraisal standard fee. That should have climbed at least 10 dollars per year, backdate that 20 years now. Now with the preference for micro managing every order and every individual fee, the lenders and distributors constantly feign surprise that the appraisers are requesting modernized fees which better reflect the effort expended. Truth is that amc should never have sent orders out below verifiable C&R levels. The only permissible way for an amc to distribute orders based on lower fee preference, is for the cost savings from reduced appraisal service charges, to be returned to the borrowing consumer.
Fee returned to the borrower, yeh right! In my market the AMC is collecting $ 75-100 per report for what ever they think they do. The collect upfront and pay me 45-90 days later….How come all the accounting people wear turbins?
Fritz, please allow me. You can go to any state regulatory authority where amc’s are licensed, and get long lists of them. Just market down the list, get approved, and then wait to talk fees and terms, when the orders are actually assigned. Repeat until you find direct assignment and C&R or better fees. I’ve found that answering each and every ‘panel application’ email is an effective method, and some turned out to be direct apps, which looked just like amc app emails. I apply with all of them, get approved with most, negotiate most of them away, and land with the ones whom play fair, and pay fair. Even when the market was slow and distribution was restrictive, I used those methods to land higher fee complex work. $100 rake is not bad at all, as long as you’re still getting $450+ on your end. Review more closing forms if you have ever have opportunity to do so. Total appraisal service charges to borrowers are climbing into the $650’s all over the country. Only the desperate amc’s undercutting each other, and a few static CU’s whom don’t have rakes, are left whom still only bill the borrowers $400 or less and such. They’re anticipating increasing fees with the renewed attention to C&R. They’re hoping to keep that surplus and have already raised base billing quite a bit, just in case they have to pay more. The time to rake that surplus yourself is right now. Establish your new fee position right now today, because tomorrow may be too late. You win some and lose some, but if nothing hits after you’ve marketed everyone, you can market alternatives or drop down your price a little with better exposure as a result of your marketing. Either way, you’ll win. When the peer market finally forces these guys to pay $400, they’re often surprised I’m up to $450 or more. Hey, tough cookies. Take it or leave it. I’m on a 3 weeks straight 12 hour a day set, and I don’t mind bouncing away orders if they’re not up to speed. When the volume is slow, I feel good about only taking one or two, because I’m thrifty like that, appreciate some down time, and can afford to say no, any day of the week. You must have what I like to call; A back pocket client. A client whom pays 400 or better, has minimal stips, and feeds you at least one a week. That’s all the regular energy you need, to boost your potential energy position.
Worthy of rereading several times over folks. Some of the best advice I’ve ever read.
OK, maybe not ALL areas will find it workable, BUT what exactly do you have to lose? bad clients?
ALSO, WHENEVER you are asked for a copy of your fee schedule, PLEASE just send them this: the higher C&R fees we developed at AGA based on civil service scales. BANKS AND AMCS use YOUR fee quotes and price lists to bolster THEIR lower than C&R fees! They do NOT hire you based on their surveys!
USE these fees for any “surveys” you are asked to fill out. You can ALWAYS change your panel fees when you actually find an AMC you don’t mind working with! Use the hourly equivalents for non URAR/UAD products. (LAST PAGE in link) http://mfford.com/html/c___r_fees.htm
NONE of us should ‘charge’ (imho) less than $65 an hour; on up to around $130+-; though we all know specific sfr job bids may often work out to less than that.
This one time anonymous example does in no way prove anything. Was the client in a bind and thus just gave into the request this single time? Will future assignments still be given to the cheapest appraiser, thus the higher noted fee in the appraisers file will prevent him from getting work in the future? Will this lack of work last for months or years due to the most likely extended time it will take to bring lawsuits to the client/AMC? Have these VA licensed AMC’s sent out notices to all appraisers to request higher fees? Have they sent out official notices saying the new minimum fees are $450? Have all of their lender clients changed the scope of work to remove the cost approach, the requirement for active or pending sales, etc. as this was made part of the law? If this information is still required, have the AMC’s set a la carte what additional comps are worth, what the cost approach is worth? Have the appraisers been provided the opportunity to update there files to reflect these now extra payable items? Even if VA state law, the AMC’s and their clients will not change as they will continue to make more money from the appraisers than what the fines will be years down the road. Or the situation will be like the state of LA where they originally thought there were 140+/- C&R fee violations only to have the lawyers on the other side provide loopholes for most and only ONE fine was enforced.
Yep. Audit the amc’s. A statement that when released, is like a whirlwind at any amc office where even the whisper of it may be heard. Can you imagine what an audit of amc selection process and associated application of their own internal tech processes would reveal? Oh lookie here, your normal selection criteria is to populate the appraiser based on low fee first. Hey look at this. You try to pay appraisers the same appraisal fee amount for a condo and a mansion, even though you upcharged the lender billing on the mansion an additional thousand dollars. What’s up with that? LOL. The final solution to the amc problem, is to audit them based on HUD1 charges, vs appraiser payouts. Unearned fees, junk fees, variable rakes, unpaid service fees, improper and mismatching ratios. It’s all fair game, and right there, in the records for almost every major amc out there. Also; Don’t capitalize amc, it’s not a proper word.
My friend’s AMC always offers $300. Also they ‘almost always’ accept counters at $375 for THOSE THAT COUNTER! Rarely, they MAY go with a lower fee but not usually. At $375 they are still making $75 to $125 and frankly they prefer the better appraisers on their own lists-less follow up work in the end.
When they ARE jammed up then they have been known to give the entire fee away ($450 to $495) for them. Obviously not their ‘norm’. They also pay twice monthly.
I have some ocean front property to sell in Kentucky to any Virginia appraisers who believes obtaining fair fees from AMCs will be that simple.
I asked and was told I had priced myself out of the market.
Oh hell, maybe I should move to Virginia!
Then you need to bracket what the market is…or work for another AMC. THEN work for C&R fees in your state! Kentucky shouldn’t be significantly less than 10% lower than Virginia. Maybe 15%.
I get broadcast emails for orders from iMortgage Services LLC. I never respond because I no longer do that work but have clicked the link curious as to the fee, it was something like $175 for a 1004UAD w/MC Addendum. Haha. Really iMortgage Services LLC?? Sadly these broadcast orders are scooped up quickly by low-self-esteem-appraisers which still amazes me. As long as they exist and are desperate R&C fees may just be a pipe-dream.
We look forward to audits when formal complaints are made. Many are correct, the fair and honest AMCs have no worries. Others not so much, imho.
I’ve file several complaints months ago. The AMC is licensed in VA and continues to do the same crap. Send you a low ball fee then cancel when you quote them market. With new below market orders I’m quoting market fees and sending a copy of the Appraisal Board’s C&R fee memo. We’ll see how that works but I’m not holding my breath because there has to be enforcement for it to work.
RLC Check with Pat Turner or Damian Gliattis at VaCap but my understanding is that VaCAPS new deminimus C&R at VA rate ($450) requires that you accept the low ball assignment, and complete it BEFORE you can file an actionable complaint.
That’s not as strange as it may seem on the surface. In many cases laws require some form of ‘loss’ before one can make a claim. Take one for the team and accept it. JUST ONE! Make sure its a FNMA 1st TD transaction.
Complete it and them file the claim. I think its a $5,000 to $10,00 penalty…maybe $2,500 but its the point more than anything, that SOMEONE files it to get the ball rolling. I’m not sure what complaints you filed months ago. VA didn’t really have an actionable limit law until last month. YOUR complaints may well have helped get THAT law created, along with VaCAPs effort, and our added support!
By the way, you can argue the fee SHOULD have been according to this (link) http://mfford.com/html/c___r_fees.htm even though the law is predicated on the lower VA amount. (You don’t have to read whole thing – you can skip right to the last page grid). I suggest citing the higher range as “reasonable” based on hours spent. Then cite VA presumptive minimum.
iMortgage Services are just one of the repeat offenders, USRES & Dart are famous for their under cutting fees of 250 for a full appraisal, I make them remove me from their list after they won’t change their ways. Now I am getting quote requests for preset appointments, really? Just goes to show you these idiots at the AMC’s are looking for something to do to justify their existance, then they want to come back to you after they get the fee approved maybe 2 or 3 days later, really? Sorry I’m now booked up that day you took too long. Sorry about your luck!
For years, I did not raise my fees because I was afraid I would lose clients. I had built up a base of a few steady AMC clients that sent work and were relatively easy to work with. Then I got a new client who had lots of work, told me the C&R fee in my area was $325 and desperate, I accepted it and got lots of work but they had lots and lots of revisions on each report and it was very annoying and time consuming. When I complained to their vendor management department, they told me to raise my fees. I was astonished at the possibility but did so. They continue to send lots of work and don’t care that I charge more. I have also increased my fees across the board for all other clients and am no longer afraid to ask what I think the assignment is actually worth versus what I think I can get. I am making more money and working less than before and have not lost any business volume due to my higher fees. There is a shortage of certified appraisers in my area and those still active are in high demand. Lesson learned: don’t be afraid to ask because you might just get what you want. If you don’t ask, you probably won’t get it. AMC’s are in the business of making money. They don’t care personally about appraisers or their welfare. They just want to make money.
I’m in Virginia and the other day an AMC I hadn’t received any work from since 2012 due to my high fees, called and wanted to know if I can do one for them within a week. Although I’m pretty swamped, I accepted. I wanted to test VACAP “Ask and you shall receive” theory. Within minutes I received the order for $325. I accepted the order, and asked them to increase the fee to $450. I also added that Virginia had passed the $450 presumptive minimum C&R fee in February. Within minutes the fee was increased to $450.
Thanks VACAP! I can attest to the accuracy of your theory!