Readers Respond
Customary and Reasonable Fees
I do not understand how the AMC can take their fee out of my normal fee. I used to charge $400-$450 and now make $200-$250 and cannot afford to live. Why did I have to take a 40-50 percent pay cut? I am forced to work for the AMC and they are controlling my income at a reduced rate. When asking if I want an assignment, AMCs ask what my fee is and how quickly I can get the report back. They never question my qualifications or expertise in the area or ability to offer a good appraisal. If I do not accept, they move on until they find someone who will accept the lowest fee. HVCC was not well thought out…what it created is a middleman that is not being controlled. How can I be forced to work for the AMC and at a reduced rate? Isn’t that unconstitutional? – Bob Woytovich
VA Fees
Regarding reasonable and customary fees, I would say that the time taken to (1) complete the 1004 MC Form, (2) analyze, report and verify the 66 percent increase in comparables that are required to produce a report (all my clients require two actives or two pending sales) and (3) sorting out the impact to a value determination from REO & short sales, requires at a minimum, two hours of additional time. It is clear to me that the VA fee schedule does not represent the highest fee for services but the base point for a start. I, like many of my fellow appraisers, have gone from having all the business I (we) could handle to working part time. I have been appraising for over 20 years and under HVCC, have lost my American right to be competitive. I have no way to differentiate my quality and service in the mortgage financing industry.
Diary of a Happy Appraiser, Part 2
I congratulate Mr.Montero. I was a Certified General in Washington and know that most AMCs are aware by now that most appraisers in that state do not compromise so readily as in other states, so he has backup about fees and turnaround expectations. Although his fees are not at Washington standards, they would be worse if he were elsewhere. I once had an office in a remote beach town in Washington and called the shots with the AMCs knowing they had few alternatives. But now in California the AMCs call the shots because the field is saturated with cheapo appraisers who are tripping all over each other to provide deeply discounted reports. A guy can do much better detailing luxury cars with less stress and liability than he could giving away his profession in the Golden State. – Baron K
The pros (of working with AMCs) are that I don’t have to chase my money and I don’t have to argue about value anymore. The cons are that I took an approximate pay cut of 22 percent. I’ve culled the sub-par AMCs and still do bank business and have gotten my fees up to close to where they used to be. My business has slowly come back and I seem to have better clientele after a year of rebuilding my client list from almost nothing. I do think that until appraisers start refusing appraisal assignments at absurdly low fees, there will always be bad AMCs. I think that as the economy gets better and more appraisers can pick and choose assignments due to demand, the cheap AMCs will raise fees or go away. Overall, my opinion is that the HVCC is a positive influence and helped get rid of some of the “yes men” appraisers and eliminated the unethical broker/appraiser teams that were rampant. In a good economy the HVCC will be an efficient, hassle-free system for the appraiser.
FHA Q&A
Are you sure about the answer for number five (of a previous Q&A)? When I researched this question, FHA told me that I could complete the inspection (effective date) but could not submit the report until I received the case number. – Anonymous
(Answer provided by FHA Checklist, Checklist Instructions and eBook author Lore DeAstra, MBA, SRA, CDEI, ACB.)
“The effective date of the appraisal cannot be before the case number assignment date unless the lender certifies, via the certification field in the Appraiser Logging Screen in FHA Connection, the appraisal was ordered for conventional lending, HUD REO or government guaranteed loan purposes but was performed by a FHA Roster Appraiser and is being converted to a FHA-insured mortgage. The mortgagee must retain documentation in the case binder substantiating conversion of the mortgage to FHA. Hope this answers your question.” – Lore
Customary and Reasonable Fee Survey Data Released
Recently we contacted a national appraisal management company about why we are not receiving work in Horry & Georgetown counties (NC). They contacted us back and said the usual customary rate is $250 for FHA and $240 for conventional. This is a very large appraisal management company. I printed the usual and customary fees (UCF) for these counties from your survey and unless I am reading this entirely wrong (50%+) the UCF is $350 to $400 conventional and FHA (50%) $350 to $450. How can they say it is $240 to $250? Smaller management companies that pay reasonable fees will be put out of business because of fees being assessed to them by states, according to one company who orders appraisals from us and always pays $325+ for the appraisal. The federal government is making things worse. The large management companies will continue to bleed appraisers and the appraisers who are doing the appraisals for this amount are hurting every other appraiser. Thanks, Diane —Strickland Appraisal & Realty Inc.
In the past several years the add-ons and extras that are being requested and required have added significantly more time to each assignment. They include extra sold comparables, pending or listing comparables, interior photos, MLS spread sheets, market search results, MLS numbers, non-living areas included in sketches, aerial images- the list grows each month. The point is that the appraisal reports now take much more time in research, field work and analysis than two to three years ago and the “customary reports” now are not the “customary reports” that the old fees were based on before the flawed business model, now in place, was forced on our profession. – Fred Hankins