Readers Respond

Customary and Reasonable Fees
In the last 10 days I’ve been approached by no less than three new AMCs with orders they had for me.  All three of them were readily willing to pay be $315 which, while still below the $400+ full fee for my market, is a positive development.  Even more exciting, I got a call today from (medium-sized AMC). I have done almost no work for them for over two years because they still wanted to pay me $230, even with all the extra work to be done. But today when they said they had an order, I told them I was hesitant to even consider it because my fees were very outdated/low in their system relative to current fees AMCs are paying in the wake of the reasonable and customary fee rules. She quickly told me that $300 for the 1004 conventional refi order is considered reasonable.  I took the order.  Still not the $400 that I should be getting but I never thought I’d see the day that this AMC would quickly offer a $300 fee. Guys, keep asking the AMCs every time a new or old one calls with an order to please quote you a reasonable fee and see how they react.  No utopia but things appear to be improving with AMCs a bit.  (posted anonymously to the Challenging Low Fess Blog)

I figured out how to get paid higher fees. Call the AMCs you get orders from and change your profile to your new fees. It’s as simple as that. I have raised my fees to 350 with LSI and Streetlinks and they are still sending orders. Tell all other appraisers how it’s done. The reason they are not paying full fees to most appraisers is because they have simply not called to update the fee they charge for their product. Think about it: why would they pay you $350 for a URAR when your profile still says you are accepting $200 for a URAR? – (Appraiser wishes to remain anonymous.)

Since I stopped working for AMCs (except those who pay MY fee), I have enjoyed life more, been less stressed and have new clients who appreciate my services. Can you believe it? It was scary at first but it’s amazing how the work comes in when you put your foot down and say, “I’m not going to take this anymore!” Sorry, I don’t believe AVMs will win out. – Janice A Hiley, SRA

C&R Fee Survey/Results (now over 16,000)
Can you email this information (the results) or do I have to pay a fee in order to get them?  -Alexander Frank, Adviso Appraisal Management

Editor’s Note: There’s no cost to appraisers to download survey results.  You can find the latest results at WorkingRE.com, Surveys.

GAO Study
Just a quick email to let you know that I was involved in the appraiser independence study in 2010.  I’m an independent appraiser who, along with two other appraisers, made the trip to D.C. We met with the top officials mentioned in the report to discuss appraiser independence issues.  Many of the final conclusions included in the report reflect our discussion. – Dan Drelich

Busy Appraiser
She is exactly what is wrong with the appraisal profession – more specifically the shortsightedness of many residential appraisers.  What will she do when she wakes up one day and some of those AMCs (based hundreds of miles away from her hometown) simply turn off the spigot?  It could be that they found a lower-cost “home-based appraiser,” lost a key client supplying volume in her market, disagreed with her on a report or closed their doors with no advanced warning because they were not profitable.  How will she replace these precious clients- put on her business suit and hit the streets making cold calls to generate more work?  Most AMCs call you out of the blue, right? Does your home-based appraisal business afford you the ability to travel to call on AMCs located in say, California?  Or will you sit by the phone or computer waiting for the next AMC to find you?  That’s a fantastic business model.  This “busy” appraiser is just a few dropped AMC clients away from disaster just like the rest of us. I did not enter the appraisal profession to be forced to work out of a basement or kitchen.  I did not enter this profession because it allowed me the ability to be at home when necessary.  I entered this profession to build a professional career.  To provide the best appraisal services in my market, target the best (local) clients in my market and to be rewarded accordingly.  As professionals we cannot build or maintain a real business in a service industry where you have such limited access to the actual paying customer.  Can you think of any other successful business that operates the way the appraisal profession must now?  Appraisers must have a college degree, take the trainee course, endure a minimum of two years of apprenticeship while completing 300+ credit points experience and then pass the state exam.  Most clients will not accept your work without five years of experience.  You could get a PHD in the time it takes to become a competent Certified Residential Appraiser now. All this to enter a profession/business where you have to work at home to be profitable, much less support a family? Many seasoned appraisers have left the profession or are leaving soon.  Most have a skill set that can pay them far more for their efforts than the appraisal profession can now.  – J. Hanes Walker

Housing Collapse: Whose Fault?
Very well said. Unfortunately, the people who are blaming the appraisal are the same people who don’t understand the process, and won’t understand your well written explanation.  (posted to story anonymously)

It takes courage to appraise real estate, but even more stamina to write a truthful article about your own profession. Thank you for your insight. (posted to story anonymously)

This article hit the nail on the head. Good job explaining. I couldn’t agree with you more. Now if they would only let us do our job. . (posted to story anonymously)

Editor’s Note: This story written by appraiser Mike Foil published in Working RE’s Online News Edition (8/31). You can opt in to the News Edition email by clicking Opt-in Working RE Online.

UAD: Road to Ruin?
The Gurus at the GSEs don’t understand real estate. It is easy to view one property like any other when you are working with trillions of dollars in loans from all over the country. However, homes are not commodities like wheat, gold or oil. You cannot devise a set of codes for real estate to be analyzed by a computer that can apply adequately to all homes in all locations. As the GSEs take more people out of the review equation and eliminate the opportunity for common sense, more fraud will creep into the system. It will be very easy for corrupt appraisers and lenders to abuse the UAD system. Less in-depth information is going to be passed on in the process. Do we really need to learn another hard lesson in real estate on the national level? (Posted anonymously to online story.)

I have been an appraiser for more years than I want to admit. I am used to being an appraiser, and, having my appraisals form a reliable value estimate to assist the lender in making sound lending decisions. I am now reduced to being a form filler, all for the convenience of agencies that could not manage themselves, much less, the appraisal profession. Not only have the taxpayers had to bail out FNMA and FREDDIE MAC but now a responsibly created appraisal report is secondary to form filling. No wonder so many licensed and certified appraisal professionals are not renewing their licenses.  (Posted anonymously to story.)

Expert Witness
I found your article quite helpful at educating us appraisers who want to get into this part of our industry.  What I didn’t see was any kind of advice on how to become one.  I have been appraising for over 10 years.  For the past couple of years, I have been knocking on attorney’s doors trying to get into the field.  Lately, I have been banging my head against the wall wondering how I can get there. I know there’s a market for it.  I have a website, advertise, pass out cards, knock on doors- and nothing’s been happening. I make a very good living appraising for lenders but I want to branch out into something more meaningful and lucrative. Is there some kind of magic saying like “Open Sesame”? – Joe Cicalese   

Reply from author Phil Spool: “The most prevalent type of expert witness testimony needed is for divorce (dissolution of marriage).  You can target family lawyers for that as well as accountants. The up and coming need for appraisers as an expert witness is for deficiency judgments.  It will be difficult to find out who handles deficiency judgments but the best way of getting that work is to contact the lenders you do work for.  It will be in a different department than lending but if you have a contact with the bank, have that contact introduce you to the REO department (Real Estate Owned) or the attorneys that represent the bank.  And when I talk about the bank, it has to be the local bank, not like Wells Fargo or JP Morgan Chase.”

From the Publisher: Absurd, Isn’t It?
I’m quite sure that the thoughts and opinions running around in my head have never been so succinctly expressed by someone else before your Spring 2011 letter.  How in the world can the integrity of work in any field be maintained when the vendor’s history, reputation, and recommendations mean absolutely nothing?  I read your letter two more times just to make myself feel better!
– Kathleen Glass, Certified Residential

Closer Look Home Inspector Safety
Great commentary and 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

Editor’s Note: You can find these stories at WorkingRE.com under Library (Vol. 28).