Don, the ‘split’ is the split.  Period. LSI used to pay us $250,000 a month (multi state appraisal firm). Our fees (gross fees) were 90% of mid-normal range. The in house appraisers got about 50% to 60% of that and never had a shortage of work.

After ATM (including some original LSI founders) split off and started their own firm out of San Diego the price competition and undercutting got so bad that gross fees dropped down to around 60% of normal and I left the firm along with about half the in house appraisers (I was salaried at the time).ALL of our staff came from other backgrounds. One of ‘my’ trainees was a (refugee) nuclear engineer and another was a retired (refugee) Iranian Air Force General. Educated non banking folks. Almost all had formal educations far more advanced than my own. Only two remain that I know of (In CA)-both are now ARs. Some of the best people I ever had the pleasure of working with.

I may have mistakenly used the colloquial American-English version. I think the Queen’s English spelling is ‘headuptheirarseitus’. I apologize for any possible confusion that may have

Mike, I think I read that word in WEBSTER’S. Did microsoft’s speller accept it?

Mike,

Was this fee split before collection, or after. The split fee had no responsibility without the measurer-photographer suffering fee collection and liability.

Years ago I sub’ed out work to hard money lenders, guaranteeing the fees. That was how I expanded my business and the hard money guys knew the subs. The hard money guys all paid well, some in front some, you trusted.

Most appraisers started out from other jobs, not from schools. Bank tellers, carpenters, plumbers, construction specialties aided greatly in sales research, verifying, cost analyst, before measuring.

The early appraisers all came as bankers, economists, bookkeepers, etc.

They formed protective society’s to keep lender-bosses from holding them liable and firing them

Today our clients expect our insurance to protect them and make their loans invest able.

They know most appraisers are worthless having to pay insurance premiums to guarantee income.

WHERE WE COME FROM? WHERE WE ARE GOING? This remains the big questions only we can direct.

don

Well said RealRose, (but I’m rarely accused of brevity).

Have a nice day!

Baggs, the idea of ‘splitting the fee’ was never intended. AMCs got their start long before USPAP (LSI and and their founding staff that later became ATM come to mind).

They took “A fee” from the amount they contracted with their clients for. Appraisers were typically paid 10% less than going rate for the convenience of not having to do any marketing; and a reliable payment source. It actually worked well for a couple years. (circa 1990-1992). The appraiser received a reduced fee but not a split or variable fee.

Post HVCC World “A fee” became “The fee”. It also became a ‘split fee.’ Both meaning a portion of  the actual appraisal fee now rather than a separate service fee.

Once that fee was disassociated with the actual tasks of appraisal management and became a variable or CONTINGENT fee for the AMC, it was an easy matter to start whittling away at it and usurping a greater percentage of it unrelated to actual management overhead.

Doesn’t it strike you as counter productive for USPAP to require a half page definition for the term ‘significant assistance”?

The only reason we arrive at conditions like this is that both most regulators (other than yourself Sir!) as well as the authors of the bi annual special interest papers called USPAP, suffer from headuptheirassitus.

1. Head, meaning that portion of the anatomy attributed to be the center of thought;

2. Up, a direction. Typically in a vertical orientation.

3. Their, a possessory description concerning ownership

4. Ass, an area not originally intended for the storage or optimal performance of the cranial content or container

5. Itus, A pseudo medical-latin sounding suffix  to help focus attention on the real problem.

There is no greater objection than absence.

CO put out this ambiguous disclosure about the FNMA inspector rule change.  It’s all smoke and mirrors, and if you have a conversation with homeowners about how they’re lucky to get you and not the other guys who use unlicensed inspectors, they’re always fully shocked, 100% of the time.  People whom actually have money on the line can not even fathom how companies could take risks like that.

Amc’s and ethics?  A tough cookie to bust.

This is your new favorite amc greeting card.

Been saying this for many years now;  I’ll fall over backwards in my chair if a lender ever gets the 10k/20k daily fine for violation of appraiser independence.  And I’ve added another one;  I’ll fall over and spill coffee, if Mercury network and the other software platform providers force a clear disclosure for which appraisal groups do use outsourced services and who does not.  Outsourced services nullified everything to do with ratings matrix, turn time comparisons, and a long list of other previously available performance measurement tools.  My most effective marketing tool is simply to brag that I do it all myself and refuse outsourced service assistance.  Now, how to convince companies like Mercury to allow me to have a little checkbox which clearly identifies to clients I’m not a cheater, I’m not a corner cutter, and I don’t use unlicensed inspection assistants.  You’d think a company like Mercury would be all over that but quite the opposite in fact, they’re scared pantsless to even consider putting forward such a straightforward disclosure point for appraisers.

The concept of splitting the fee in the first place does not compute. It’s your signature, your work, your insurance, your business. The amc’s confused the appraisal fee for the management fee, but that is easily corrected by the appraisers themselves. Or at least it will be that way when you strike out as true 1099 with an EIN#. Get away from amc’s and you’ll be fine. For how to transition that’s easy, I’ve built 2 small appraisal businesses with a fax and a flyer, that’s all it takes, sub fax for email these days I guess. All it takes is one good client, and the best tip anyone can give is exhaust every direct lender lead before you even consider prioritizing an amc over a direct assignment lender. It’s a simple analysis, why share when you can keep 100%?

Feel free to message me directly

Yes because it was published on AppraisersBlogs today. So we published it today on our website but we made sure to reference the newsletter by including the date, volume & issue numbers at the bottom of the article. Sorry for the confusion.

And yes I saw the bottom