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This may end up being the most prolific of my “categories”!!!
We all know the R.E. Appraisal world is changing, oh, and the 90’s taught us that change is good. ( - I could get sidetracked right here, but I SHALL BE STRONG! - ) You’ve probably heard all the woes from the lenders’ side and from the consumers’ side. How about some input from an actual real R.E. Appraiser???
I am a one-person operation, home-office, no helpers - JUST ME. I have a family and a house, two old vehicles (one is 18 years old, the other 24), no extravagant needs. High-speed internet, satellite TV (old CRT sets!), cell phone (6 yrs old, very basic). No gardener or pool or house cleaning services.
Pretty darn lean.
As an appraiser, I grew up on lending work, it was how I was trained and I was staff appraiser for a long time. I went independent about 10 years ago - which I may get into, too, at a later date. Things timed out where I - along with so many others - had more work than I could shake a stick at in the early 00’s, several clients but not too many, so as not to spread myself too thin. Well, schucks, little old me all concerned about giving quality service, both as turn-around time and content go. (”Stupid Appraiser”, was it?)
There really was no time left to “diversify”, to drum up other work aside from the lending racket. In retrospect, I should have TAKEN that time, but that’s one of them hindsight things. Again, silly old me, still thinking there is such a thing as loyalty and value in established business relationships.
So - the short of it - the major client dropped their “fee panel” (i.e., approved independent appraisers - like me) in favor of engaging an AMC (Appraisal Management Company). This happened “over-night”, in December I was still hoppin’, then come January I had two re-inspections. “We sent out an e-mail about this, didn’t you get it?” NO! I never have had ANY spam filters up. And something from my major client certainly wouldn’t have been caught in the spam, anyways.
So I say BALONEY!
“Just work through the AMC”. There is that. Your typical AMC pays the actual appraiser (who is still a “contractor”, a “1099″ - not an employee) 2/3 max. of a regular open market fee, more often more like 1/2! It’s still money. But there is more to such an arrangement. An AMC requires that the appraiser carry so-called E&O insurance, which most independent appraisers do, anyway. The problem is that reading the AMC’s information geared towards their clients - i.e., same-said lenders, et al - they advertise “guaranteed appraisals”. If you find an appraisal to be “faulty”, just tell them and they will help you sue the appraiser.
I’m sorry, but that is just plain old “feeding the Beast”. Yes, capital “B”…
BTW, this major client of mine paid a very low fee per appraisal for the times. But work was plentiful, and with their respected position in the market, it seemed like a stable arrangement, something to rely on for steady work.
Well, on to the next-major client. They were managing the appraisals for a number of lenders, kind of acting as their collective appraisal department - but not your typical AMC. Work was plentiful and they paid well, and they would pay premium for complex and/or rush assignments. Again, there was an established loyalty and trust relationship - I thought. Then a changing of the guard, and all of a sudden the appraisal orders are falling off at a precipitous rate. So, I get on the horn and try to find out what the deal is. Hah, a slew of newly accepted appraisers are charging a lot less. Fine - I lower my fee, eventually beyond my comfort level, but still need to pay the bills, so… Fewer and fewer assignments coming my way. Back to it: WHY? Oh, limited territory of coverage. The explanation, then, is made clear that appraisal shops with split-fee arrangements with fee appraisers get the assignments, because they can boast several Counties as their service areas. Let’s see here: first a much lower fee is required to get the assignment in the first place, then I would have to split THAT with the “shop” (and you’re lucky to get a 60/40 split in your favor in this arrangement, 50/50 is even considered good…). Sounds like I’d end up with even less money than with a straight AMC arrangement.
What’s left? The handful of mortgage brokers that had “honored” me. What happened there? Wild guess, anyone? The values were levelling off, and I refused to inflate them. He, he.
Bottom line:
NO MORE LENDING WORK! DECEIT, DISLOYALTY, DISAPPOINTMENT.
(I gave them the best years of my life!)
