AMCs are not the Enemy...the enemy is within

I contend that the real "hot button" is not the lowering of fees - but the inequity of appraisal standards.

The trainees or newly licensed appraisers who cannot afford to open their own shop may indeed get a raise in fee by accepting an order for $200.   That is logical and a true fact of the matter.

I think where long time appraisers get very irate about this issue is when they are asked to complete an appraisal for $200 when they typically charge $350-$450 for the same home.  In the scenario where a staff appraiser in an appraisal office is completing the order and being paid a fee split - I agree that this is similar to an AMC set up.  Except that typically in an appraisal office - if all the proper steps are taken, likely the supervisor or other staff appraisers may be helping with the process, etc.  So the full fee is indicative to the work produced and shared among a group or office.

 Where things fall apart and the "inequity of appraisal standards" are noticed - is when a newly licensed appraiser, who has only been trained to measure homes and fill forms, takes the same work for $200 and only completes a "form filler" quality report.  No measuring the market, no discussion of value trends, and many times, no investigation of the highest and best use in regards to zoning, etc.

I have been both.  I was trained from 1994-1996 to be a form filler.  I measured homes, I pulled comps, but only filled forms and checked boxes.  Pretty average stuff.  No calls to Realtors to confirm concessions, motivations, etc.  So you know what, I could inspect a home in 30-40 minutes.  I could even drive and take pictures within 1 hour for my comps.  I could sit down and write the report in under 3 hours typically - after all, I was just filling forms and using adjustments like "$20/sf if it is REALLY nice, $15 if "Good", $5 if fair."

And to make matters worse, I was isolated from the real world.  I had only known my form filler trainer, bought his business (another fiasco of a story) and did not work or associate with other appraisers.  So I worked in a vacuum and only got feed back from clients and underwriters.  And hey, if my jobs were within 15% net and 25% gross, comps within 2 miles, values "came in on par" - why complain?

It wasn't until an appraiser, an SRA with the AI, reviewed one of my appraisals and called me up one day to say, "What the hell are you doing?!" - then the crack in my bubble formed.  I welcomed the criticism and she continued to mentor me - untraining and retraining.    Then, I got with the Wintotal Group in 1999 and later the Inland CA group - and now have added market measuring, graphs, charts, verification of data, etc.

Ooh boy.  These appraisals now take hours and hours of research, commentary, analysis, etc.  I am not too happy about taking that AMC work anymore since my "standards of reporting" have increased to a level where I realize I am no longer making $40 an hour but now more like $10 for that $200 job.

And there lies the TRUE challenge.  I don't care how much anyone charges.  Undercut me and take my business by being faster and cheaper.....AS LONG AS you also meet these same reporting standards.  THAT is where we need to elevate our "profession" and the rest of these discussions become moot.  If we were ALL doing the same level of work - same standards of analysis, reporting, etc - then those who take $175 URAR jobs are truly working for peanuts.  And we know that won't last long.   Then, if someone wants to beat out a competitor - the playing field is even.  The inequity of appraisal standards now made level.

 That is where the AMC discussions HAVE to go.  Because if the AMCs approach anyone, knowing that the expectations for an appraisal go from a current "2" to an expected "10" (on a 1-10 scale) - people will think long and hard about taking any fee that comes their way.

Join the discussion over on the Water Cooler with Patrick Egger at

http://www.appraiserswatercooler.com/group/urars 

 Let's get to work on raising the bar.

Make it a productive day