Readers Respond

AMCs/Customary and Reasonable Fees
WRE has received many hundreds if not thousands of comments from appraisers posted to its surveys and blogs, with many also emailing us directly discussing AMCs, customary and reasonable fees and the state of the industry. These are representative of many. – Editor

This AMC is complaining about a fee of $325 for a rural appraisal in Creek County outside the Tulsa (OK) Metro area. Before AMCs dominated the Tulsa market, lenders were widely accepting $350 to $425 for this type of appraisal in this area. I know because I did many such appraisals in this market since 1989, before AMCs monopolized the market. AMCs scoff at a $275 fee for an appraisal in this area. Where fees of $350 to $400 were widely accepted, I have been told by AMCs that my greatly discounted fee of $275 is not “competitive.” The fees I am being forced to accept are 25-35 percent of what they were before the AMCs controlled this market, without exception. I have been forced to either lower my fees (that were customary and accepted as reasonable by lenders before the AMCs dominated this market) or face the prospect of being forced out of the appraisal business. HVCC was so concerned about the lender interfering with the appraiser’s objective process of the appraisal. But the AMC “bidding war practice” is becoming just as dangerous to the appraisal industry, in my opinion. I have never seen anything as threatening in the 34 years of my appraisal profession.  – Wishes to remain anonymous.

I don’t think it is possible any longer to do good quality mortgage appraisal work and earn a decent living. I have been an appraiser 25 years and I am completely out of mortgage origination work and glad to let it go. Whenever I get a call from a young person asking about this profession, I advise them to stay away from it. My niece wanted a job in real estate and I wouldn’t even give her my residential business I spent 25 years building.  I closed it instead. I would not wish such misery on someone I love. – GD CRP, SRA

AMC Talkback
Joe, I have been running my own appraisal firm for over 10 years.  As most appraisers will agree, we all had our own clients until they started using AMCs like yours.  I produce quality reports that I will defend in court if necessary. AMCs are nothing like an “appraisal shop” because I don’t need someone going over my reports with a fine toothed comb and giving me additional stipulations. That is why I am a certified appraiser and not a trainee.  If I needed someone to hold my hand, then I would consent to a fee split.  Give me back my clients, I’ll get the full fee from them and we’ll call it even. – Posts to the HVCC Talkback Blog are anonymous

Interim Final Rule
I plan to write to my congressional representative about the low fees that are more in line with 10 to 15 years ago than what is customary and reasonable in today’s market. This is an issue that was specifically addressed by the law and should not be occurring. I think writing to the federal agencies that are supposed to be handling complaints will result in months of delays. Let your representative help with this. Let’s all make a landslide of letters to Congress about these violations of law and the antitrust monopoly that the AMCs have over the market. — Posts to the HVCC Talkback Blog are anonymous

Customary and Reasonable Fees: Fighting Back
I still don’t understand what we do if we receive updates from AMCs, etc. about their new fees and it they are below market. Where do we report them and how? I just received an updated fee schedule from (huge AMC) and it is ridiculously low. They state their new schedule is based on what they have been “customarily” paying over the past year. BS! – Joseph M. Kavanagh, CREA

Editor: See Fed Board in Industry News

UAD
Am I the only person who finds it ironic that Fannie Mae, while being investigated by the government for its inability to figure out how to do its own work effectively is, once again, going to tell appraisers how to do their work? – James Lett

Non-Permitted Buildings
Appraisers must understand that “as is” does not mean “as something else.”  The job of appraising becomes something of a crap shoot when they start applying “what ifs.”  “What ifs” are by definition departures from fact.  – Edd Gillespie

Giving Clients What They Want
I am starting to wonder if the line is being crossed by lenders between the Summary Appraisal Report, that the Standard 1004 form is labeled as, and a Complete Appraisal.  With all the additional photos, regression analysis (1004MC form), aerial photos required by some lenders, inclusions of research results and various other lender specific requirements, are we not approaching the reporting level of a Complete Appraisal?  – Elizabeth G. Roth

Depositions and Court Testimony
The story offered some valuable tips when performing expert witness testimony. I am pursuing more of this type work in order to offset the dwindling mortgage work of recent months. I have been “on the stand” in property settlement cases a couple of times and appreciate the tips that you offer. It certainly is not a pleasant experience the first couple of times due to nervousness, but I was able to work through the testimony due to being well prepared. Thanks again for your help! – Gary J. Hollingsworth

Home Inspector Safety
Great advice about letting someone know when you’re alone in a home. I usually try to call the listing agent or buyer’s agent to let them know when I’m starting and when I finish.  I’ve always believed that’s important info for the record.  However, I think I will be more vigilant in making sure someone always knows when I’m starting and when I expect to be finished. Thanks for sharing. – William A. Zoller, CRI, U.S. Inspect, LLC

Story first published in Working RE News Edition for home inspectors. See Home Inspection – Staying Safe out There.)

Customary and Reasonable Fee Survey
Hello, I see you have undertaken a survey of customary and reasonable fees for appraisers.  We are looking to integrate survey data into our appraisal management platforms to give our vendors an end to end solution for defining their product offerings. I’d like to setup a meeting with someone from your team to discuss the possibilities (of getting the data). – From an AMC (not willing to be identified)