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If you can’t beat ‘em, join ‘em (?)– Are you already an AMC?

By
Real Estate Appraiser with Estimation Nation Corporation

While investigating options for survival in the appraisal industry post-HVCC-2009, I started to research (as I'm sure many of you have) what it would take for our company to become an AMC (appraisal management company).  What I found out was that according to TAVMA, we already are [by definition] an AMC.  (Michael Talbotto had mentioned this to over six months ago... and now I say to you, Michael... ‘Bravo').

 Here are some key points that you (as an appraiser/appraisal company) may want to take note of:

"Appraisal firms typically lack capacity to perform other mortgage services, whereas most AMCs offer title, flood reporting, closing service, etc. Hence appraisal firms cannot claim "one stop shop" status." 

This is a hoop I think could easily be jumped through ...

"Appraisers for appraisal firms tend to work on orders generated only by that firm. AMCs hire small and large firms but can claim almost no exclusivity to individual appraisers' book of business"

 If everyone has to go through an AMC next year, aren't we all working for AMCs and none of us working independently?  

"Does not develop and report an opinion of value (i.e. engages in the practice of appraisal). "

As long as the appraiser is solely responsible for the final value, then this is covered. 

Now some of you may remember that I have a track record of scorning appraisal management companies.  Yes; There are three major points that irk me about AMCs:

  1. Most are cutting salaries of appraisers to the point where appraisers cannot survive on appraisal alone or the appraisers choose quanitity over quality (I'm sure that is not what the creators of the HVCC had in mind).
  2. Their clients are mostly lending institutions and there is little to no advocacy on appraiser's behalf (which really negates the entire HVCC rule about excommunicating lenders and appraisers, doesn't it?).
  3. Many are not experts in either appraisal or lending and so the communication is cumbersome and much of it lost causing time and additional confusion and inevitably a lessor product.

With an appraiser controlled AMC, all three of these points could be eliminated (promise me if you look into doing this as an appraiser you do not become greedy and forget about bullet point #1).

There may be some updates in how you pay your employees and you may need to dub yourself a new personal title at the company, but otherwise I see the difference between Appraisal Company and Appraisal Management Company is like you saying to-ma-toe and me saying to-mah-toe... (so... let's call the whole thing off?).

Comments (18)

Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

A very intersting post I have some appraiser freinds I will point to this blog. Thi sis what I love about this network all the information

Nov 01, 2008 06:56 AM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

Thank you, Charlie!

Nov 04, 2008 01:38 AM
Alisa McKeel Willson
Appraisal Pros in Texas - Huntsville, TX
Certified Res. Appraiser

Hi Sara,

Funny you should blog this...I have two appraiser friends here that I have been having this same discussion with.  I think the idea is a good one -- and I totally agree with the points you made.  I especially agree with your number one point about the fees. 

I recently received an advertisement from an AMC looking for appraisers. I started filling out their forms.  When it came to fees I was amazed.  They wanted to pay $200 for a 1004 and $225 for and FHA 1004.  It was amazing to me...check the crawl space, attic and test everthing else for $225..!

Great post.

 

 

 

 

Nov 13, 2008 11:34 AM
Jim Anderson
Jim Anderson - Happy Valley, OR

Alisa-

Check the crawl space? Are you crazy?  Like I told Sargon...go to google maps...get a pic of the subject...then from google maps...get 1 pic of a comp...make up 2 more comps...pull a figure out of the air...then send to client.  15 minutes, tops!

15 minutes work for $225...not too bad!

Jim

P.S.  If you want to save more time, just find an old appraisal and change the address...

 

Nov 14, 2008 05:55 AM
James Graner
Residential Services: http://appraisalmo.com - Saint Charles, MO

Sara,

By the time we are out of this period of downtime, I am not sure if our profession will look anything like it has in the past.

This is a yo-yo that might have a pretty thin string.

 

Dec 12, 2008 03:53 AM
George Bennett
Inactive - Port Orford, OR
Inactive Principal Broker, GRI

Great post Sara. You have clearly identified a problem. Hopefully, individually and collectively appraisers will turn down jobs that don't pay a fair price.

Dec 16, 2008 04:00 PM
Meg Stewart
Reliable Appraisal - Frisco, TX
Appraiser-Frisco, Texas

Sara.  Thanks for taking a leadership role in are area that will certainly impact our businesses in '09 and beyond.   Do you truly believe we are beyond "if" and not to prepare for "when"?

 

-Meg

Dec 18, 2008 10:23 PM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

(Sorry guys... I was pretty sure I was keeping up with the comments, but I'm not sure if AR is catching everything I write.)

Alisa - The $200 range seems to be pretty much the norm... I've certainly seen lower, though - I hear appraisers nearly every day talking about getting out of the business.

Jim - Watch it now.  Not everyone will get that you're a kidder.

James - Thin string is right.  Save you're pennies.  You'll be needing them next week.

Hi George - I wish that were the case, but there always seems to be someone... and I'll admit sometimes it's even me... If I get a request for a property right down the street, or a property that I can see is going to be a pretty cut and dry report, I've been known to take them.

Hey Meg - I've been looking at appraisalscoop.com a lot these days for the answers to that.  There's nothing definitive yet, but nearly every article they're posting as of late has been about HVCC or AMCs.  I'd say it will at least get pushed out to March '09 and at that point we'll have a new administration and so the future is still pretty foggy.

Dec 19, 2008 04:54 AM
Toby & John T. Williams
Douglas Elliman Real Estate - Medford, NY

I used to do 10-12 appraisals a week. Mostly Refis,   But since I WON'T work for $150-200 for a FULL appraisal (hah, I meet appraisers who don't have time to do any research due to AMC demands).

I haven't done an appraisal in about 6 months for any banks anymore.

The quality and understanding of appraisal work has gone right down the tubes.

 

Dec 20, 2008 05:45 AM
Kenneth Miller
Miller Appraisals - Fremont, OH
NW Ohio FHA Appraiser

Sara, Have you checked out the Mercury Network through alamode. Huge network of appraisers and other real estate players. Great thing about it is the $15 cut they get instead of the $150-300 chunk most AMC's take.

Dec 20, 2008 09:47 AM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

Hi Toby & John - That's what so many appraisers have been experiencing. 

Hey Kenneth - That would be great if it didn't include an upfront fee as well.  (The lowest set up I see on their site is $300 per year with no guarantees attached).  That being said, we use Alamodes services. They're alright ... except I thought Dave Biggers was going to be one of appraiser's only advocated about HVCC until he worked this 'we're now an AMC, so we're going to zip our lips and collect our checks' new path.  In addition, I believe that it is a breech of Alamodes membership to be an AMC and use their services... and so you would have to make a business decision.

Dec 21, 2008 02:26 AM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

Well so much for that idea.  (Brian... are you proud of me for catching up on my Appraisal Scoop reading? :-) )

Jan 18, 2009 12:10 PM
Donny Carter
Carter & Roque Real Estate - Frostburg, MD
Mountain Maryland Real Estate Expert

Sara, We just recenly had to pay nearly $500 to get set up with one of these amc's.  They sent us three appraisal within 2 days in early December.  To date we still have not been paid. 

Feb 24, 2009 12:41 PM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

Hi Donny -

I wonder if this will be the new trend... fly-by-night-AMCs .... especially with the HVCC making invoicing the new norm.  It might be about time to start a 'good and evil AMC blog' so that we can all be alerted to which are reputable and which to avoid.

Feb 25, 2009 02:52 AM
Anonymous
Ed Jones

I found this blog when researching new AMC's to try and expand my business which has slowed down the last 4 months.  I just wanted to thank you Sarah for starting this conversation.  I have been appraising for 18 years and several years back one of my largest lenders was bought out and the new owner required work through a AMC, that they controlled.  Since I wanted to keep the business, I signed up, but quickly found out that they only wanted to pay $225 for a 1004 and wanted the inspection made within 48 hours and the report completed in 24 hours after inspection.  I had been completing work for the previous company for 13 years for 8 different locations and my fees were between $300-$400 depending on the locations.  I work in a fairly rural area and was covering a 70 mile radius for the previous company but I could not justify that much travel and research since this was in 4 different parishes (that what they call counties in Louisiana) and MLS only covered 1 1/2 of the parishes.  So I dropped the AMC because I could not get a decent fee.  Well several months later the Regional Manager called me and begged me to start doing their work again because they knew that the appraisals that they were getting were way over valued.  The officers in this company had to inspect the homes before they could order the appraisals and they knew that the were getting inflated values.   I told the manager that I would try again but only if I could get better fees.  Well after months of negotiating the fee for every order, I just had enough and quit.  That new company went bankrupt a year latter due to loan loses.  It is very difficult to find a AMC that will pay a livable wage.   I have seen on some other blogs that some appraisers complained about payments from Landsafe, but I have not had any problems with their payments.  The only beef I have with them iswas when Bank of America took over Countrywide, the communication was real bad for a while.  I usally get paid within 2 weeks after completing a report and I don't feel any pressure to reach a certain value.  I wanted to know if there are any other good AMC's out there that someone could recommend that are not a pain in the neck to deal with?  I just joined the NVS Coop.  Can anyone tell me how it works?

Feb 15, 2010 09:36 AM
#15
Tim Ventura
Digital Marketing Consultant - Blaine, WA
Digital marketing & technology consultant

Fly-by-night AMC's will probably be a temporary trend the same way fly-by-night BPO companies have managed to build marketshare: eventually appraisers wise up to it, but it takes a while for news to travel. We have a pretty comprehensive registration tool online for them at http://www.appraisal-management-companies.net

 

Jul 28, 2010 07:53 PM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

Hello Ed - Thank you for your input.  I think all of us appraisers are feeling it.  For the most part, I have only stuck with Equifax for my AMC business, but they're really trying to low-ball fees and their requirements are laughable.  Here are some conditions sent over by them today:

  • Tax year must be only a 4 digit year.
  • Sale price of the subject can not read REFINANCE.
  • Price high, price low, age high and age low are numerical fields only. They can not read NEW
  • Number of stories can not be spelledout.
  • Please change to 1 Effective age can not have letters in the field. Please remove E
  • Refrigerator can not be marked P. Please mark with an X or leave blank
  • Subject age and comps 1-5 are numerical fields only. Please remove all other letters, characters, symbols. no slash marks or E or A.
  • Prior sale date of the subject and comps 1-5 can not have verbiage in the field. This is a date only field. please change to a date in chase format. if no date available please use zeros. 0000/00/00
  • Prior sale price of the subject and comps 1-5 can not read verbiage int he field. This is numerical only. Please change to 0 Prior sale source date for subject and comps 1-5 can not have verbiage in the field. THis is a date only field. please change to formatted date 2010/07/00 Cost appraoch data date must also be in chase formatting. please change to 2010/00/00

Perhaps a fee for ridiculous conditions should apply here?

 

Aug 02, 2010 04:44 PM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

That's a great resource, Tim!  It's sad to see that it's hard to find an AMC that rates over 2 1/2 stars ~

Aug 02, 2010 04:46 PM