a la carte Appraising

I was speaking with an AMC executive recently (yes, appraisers and AMC employees can talk to one another) as a friend.  He and I were swapping stories and he told me one that just made me recoil in shock and simultaneously laugh at the irony.  

 

He said that one of his panel appraisers had recently called him for the purpose of explaining his new fee schedule.  In a paraphrased paragraph, here is what he said;

 

“My base fee is $350.  For that amount of money, you will get a basic inspection (measuring, standard pictures, and notes), and a basic write up (three comps and no extras).  If you want additional comparables or listings, they will cost you $20 each.  Additional inspection items such as attic and/or crawlspace will be extra.  If you give me revision requests, that will cost you $50 each.”  

 

Now, I am not faulting this guy for being creative, but really?  You think the AMC is going to go for that kind of business model?  Yeah, me neither.  

 

a-la-carteAfter the conversation with my friend who works for a successful AMC, I thought some more and why this appraiser has felt backed into a corner.  We are in a tough spot right now in the appraisal profession.  Scope creep is real.  The extras we are asked to do (sometimes with no bearing on value) are oftentimes nothing short of ridiculous.  It can, and continues to be, a challenge to be a professional and still make a decent living as a real estate appraiser.  That being said, perhaps there is a better way out of this mess.  

 

It is wise, at times, to step back from our emotions and remember the real world we live in.  You do not order an entree at a restaurant and pay separately for the chicken, herbs, and sauce.  An appraisal product is a service.  It is typically paid for in a package.  Certainly, there are extras (i.e. rent schedules, operating income statements, final inspections, etc), but most of the time your client is paying for the complete service, not each component a la carte.  Furthermore, though it is not always the case, aren’t at least some of those revision requests coming because you failed to do your job in the first place?  


I am as frustrated with our current lot as the next guy.  We should do all we can to influence change for the better.   However, I am also a pragmatist.   I have no Fairy Godmother to wave her magic wand and send me off to the ball.  In the end, life is life.  We either choose to be an appraiser in today’s world (with all that goes with it) or we do not.  I, for one, choose to stay.

43 thoughts on “a la carte Appraising”

  1. Pingback: a la carte Appraising - Appraisal Buzz

    1. Richard Brotzman

      I’m not saying this appraiser’s attempt to use a pricing structure that you call “a la carte appraising” will work with AMC’s, but I would like to point out that your analogy is flawed. In the appraiser’s pricing structure, for $350, you get what used to be considered a standard appraisal: property inspected, 3 comps with adjustments and discussion, and a supported opinion of value. That’s a complete service. That’s equivalent to a complete meal ordered in a restaurant. The pricing for extra comps or revisions, is not like ordering an entree and then having to pay extra for the side dishes in a restaurant, it’s more like….I’d like not one, but two backed potatoes with that meal (extra comps), oh, and now that the meal is finished, I’d like dessert (revisions–assuming the revision wasn’t to correct an appraiser’s error or oversight). I can assure you that any restaurant would indeed charge extra for those requests. In many restaurants (like Chili’s or Applebee’s), if you order an entree that has some kind of sauce, and you ask for some additional sauce, you’ll even get charged for the extra sauce. Just because you expect to get paid extra for extra work that goes above and beyond what used to be a typical complete appraisal, does not mean that you are doing appraisals a la carte. It simply means we’re not running an all-you-can-eat buffet.

      1. Richard, my local McDonalds charges me 10 cents per extra sauce for my nuggets, but the Dustin’s of the world, the AMC’s, our clients and by reading the comments on this topic most appraisers, seem to not care when the scope creep has added hours to each report.

    2. Over the forty some years that I have been in the appraisal business
      I have seen appraiser try the piecemeal fee quotes. I have never seen
      it work.

      An example, last month I received a request from an AMC for a UAD 2055
      in addition, there fee quote was $275. I thanked them for considering my service
      however, the fee would be $650. With-in ten minutes they responded with the
      order at the $650 quote.

      I was able to deliver the report in less time than they required and all
      of the adjustments were supported with linear regression and the final
      value supported with multiple regression. In the following two weeks
      they sent me six more appraisal at the higher fee.

      From the get go we should determent how much time will be
      involved and then ask yourself what is my time worth. If we can estimate
      the value of a house, we should be able to determent the value of our
      time.

      1. I want to know how you develop your regression support data??…I have listened in on webinars and tried to “comprehend the regression thought process and derivation” and I have tried a few different software assist’s such as Savvi, Redstone, CompCruncher, etc…?? Advice?

  2. A quick note. An appraisal is a supportable opinion of value to a client. As long as the appraiser discusses the scope and gives his Suport for that opinion, he or she did his job.
    After that the appraiser should charg for any additional services. I know accountants architecs, attorneys and all other professionals charg for additional services, so should the appraiser.

    1. Appraisers have acquired a wealth of knowledge which is not appreciated or rewarded by the amcs’ and since we as a group have not pushed back and rather chose to be pushed around we have a long climb up the ladder to achieve recognition and reward. We have one but to blame but ourselves. But I think blame and anger are negative we as a creative and knowleable group should address our financial needs independent of tight fisted amcs’ and other similar concerns paralyzing us by utilizing that valuable self acquired knowledge for our own benefit. Why not buy property ? Why not become a broker and sell property? Why not do al the functions in between to accumulate wealth. We should view ourselves as more than just real estate appraisers. We are also real estate solution experts and knowlege is power. Take a look at my website and you will see what I mean. Houselogicny.com. If you have any questions send me an email. Use your knowledge empirically . Fund your financial independence with it. Send a message to the amcs’ (and brokers) as well. Refuse those low paying jobs. Make your money elsewhere.

      1. Excellent thoughts and I agree with you.
        I am also diversifing myself have couple of my owrn rentals and work as RE broker on referral basic beside doing full time
        appraising. Use the knowledge you acquired doing appraisals to do other aspect of Real Estate. I don’t sell myself cheap. If
        AMC don’t pay me as Certified Residential appraiser I don’t work with them and keep myself busy doing other than appraising and read the article like yours to gain the knowledge.
        Thanks,

        Ash

  3. Coming from someone with a relatively new and atypical business model yourself I found you point of view both “laughably shocking and ironic”. There are a variety of business models out there. You may not agree with them but the a la carte method can be viable. If this individual want to push the boundaries by applying it to an AMC then more power to him/her I say! If it does not work for this one, then I am sure he/she will find a market where it does work. The more stories I hear of appraisers having the sack to push back against the traditional AMC business model the better I like it.

    1. I agree with Mike.

      The statement by this self proclaimed know it all author of “You think the AMC is going to go for that kind of business model? Yeah, me neither” is both condascending and pathetic.

      Its simply his buisness model, and if the AMC boneheads want t osend him (probably crappy) work, they are going to pay the fee. If they go with a shop that uses trainees to do much of their work they will get what they deserve, a below avg. report.

      Give it a rest Dustin, you’re not half as smart as you act like you are.

  4. Well. I do agree with him. However it will never happen. But, if these appraisers do not raise their fees to cover all the time we spend researching title on 4-5 comps and the subject, writing a narrative report on everything else except explaining in detail what enzymes our brain uses, to come up with every thought we have to verify what is put into the report, we will all be bankrupt!

    An appraisal is only a reflection of what a typical buyer is willing to pay for a property. Behavioral Psychology is the degree of choice for this one, not statistics!

    Example: You the Appraiser Coach……why are you not making a living wage off doing appraisals only.
    The Guy who taught my USPAP class last year…..He is an General Appraiser, a Realtor, a Property Manager , a USPAP instructor ETC:
    Has a large office and a staff. He cannot always take a pay check as there is not enough funds to go around a lot of the time. He is now paying office staff overseas to cut costs. Anything wrong with that picture?

    Economics 101……We are not charging enough money! Neither is anyone else. I do 6-8 files a month and I do not need to do anymore. I almost NEVER work for AMC’s, and sometimes I sell or buy real estate as I have a license. But no I will not work for anything south of $400. FHA is $650. New construction is based on how large the house is going to be. It takes more time.
    Every year my business grows, as more people bankrupt them themselves. I pick what I will do based on what is most challenging. After 28 years, this stuff gets boring as we do more of other peoples jobs such as Title Work and FHA Building inspections. Its the Scope Creep that eats every ones time, AMC’s that steal your profit, and not charging enough that causes the demise of today’s Appraisal Practices. All the hairdressers I know pay $13.00 for their license and make $80,000-$100,000 a year.

    1. Debbie is right.

      I have said this before and I will say it again. Diversify your practice. We have a strict policy against working for AMC’s. If it says management anything on the caller ID we won’t even answer the phone. By the way, we also don’t work for clients that require us to pay to get the assignment (appraisalport and Mercury network are an unnecessary drain on my time and my compensation). We have a diverse list of clients that range from banks (that don’t use AMC’s) to Attorneys and individuals. Trust me, the fewer of us that work for peanuts the better we will be compensated.

      Another issue residential appraisers should be thinking about is being replaced by automated valuation programs using data that you collected and provided to Fannie and Freddie. Eventually the function of the residential appraiser will be reduced to measuring and verifying the condition of the property. I once had a computer programmer that worked for Wal Mart tell me “we can model anything”. Every advancement in data collection and publication is one step closer to the major residential appraisal user’s ability to bypass us.

      I know this will be controversial but all most residential appraisers are doing now is looking at the property and completing independent comp check anyway. There is very little due diligence completed, no independent market analysis, no determination of highest and best use, no real cost approach using market data and, most of the time, no income approach. How do I know that? I have paid for many appraisals over my 20 year career in real estate and most of the time they were nearly complete crap. So quit whining about being under paid and become a better appraiser…the pay will increase by itself. By the way, if you have the chance, become a commercial appraiser there is less competition and better pay.

      1. “all most residential appraisers are doing now is looking at the property and completing independent comp check anyway. There is very little due diligence completed, no independent market analysis, no determination of highest and best use, no real cost approach using market data and, most of the time, no income approach. How do I know that? I have paid for many appraisals over my 20 year career in real estate and most of the time they were nearly complete crap.”

        First time I’ve heard an appraiser the TRUTH about 95% of residential appraisers and their “work”.

        And its usually some of the laziest and least competent appraiser whining the most about being “underpaid” for their “professional” work. LOL.

        Congrats to you sir!

    2. To agree with the a la carte guy shows a lack of understanding of the appraisal business. You say you agree with him and then go into a discussion of economics 101. Economics 101 says that guy will never have his demands met. You can choose to not work with the AMCs but to say they are stealing our profits is absurd. I work with many AMCs and assure you I am far from bankruptcy. Appraising is not boring to me and if you think so maybe it’s time to find another line of work. Hairdressers making 80-100K a year? Get real.

    3. “I do 6-8 files a month and I do not need to do anymore.”

      Just curious how you spend the other 2 1/2 weeks out of every month?

  5. AMCs probably won’t accept an a la carte fee schedule: they want their compliance document – capable of going uninterrupted through whatever upstream scrutiny it is will receive – their way in the shortest possible time at the lowest possible cost. Scope creep is real, but appraisers err in putting up with add on requirements not specified by the assignment agreements they accept and/or the overriding service agreement they sign when taking on a new client.

    Additionally, appraisers are at a disadvantage, as additional, not previously agreed to, requirements are imposed with the threat – implied or stated – that refusal to provide those additional services (extra comps and all the rest) of non payment or of having a complaint filed.

  6. I was approached by an AMC (Coester) to do some business. I called and asked for a fee schedule in my area. After some time on hold, I was told that they have no set fee schedule in my area (Boston). If a client has no fee schedule, I don’t work for them. If they do supply a fee schedule, get a few from different clients and make some choices!

  7. I recently had a AMC asked why I wouldn’t accept their fee of $450 ( I had requested increase by $50). I told the AMC they required a lot more information than was required and if they wanted more information then the fee would be increased to meet that demand. The person I was talking to said “We heard a lot of that lately”. Guess what they raised their fee to meet my requested fee.
    Gary

  8. I agree AMC’s may not go along with that model, but perhaps other clients would. I have always considered an accountant. The accountants I have had in the past always charge that way. It’s not $350 for your taxes filed. It’s $350 for basic W2 employee, plus $75 for 1099’s, $150 for S corps, etc… and the add-ons continue. A single w-2 employee is much different than a small business owner’s tax return, yet they are both tax returns. This is not unusual in the business world.

    Eric

  9. While a la carte may not be appropriate, we need to be paid for scope creep. Using the restaurant example, you do not go to place, order a meal, and expect to get dessert, additional sides and drinks for free which is what many AMCs expect. They got their “complete meal” when the appraiser submitted a properly completed supportable report, yet they ask for more and expect it to be for free. I do not know a restaurant in the world that operates like that. If they did, they most likely wouldn’t stay in business very long….neither will appraisers. If it is not within the four corners of the engagement letter, it will and should be subject to additional costs.

  10. Frank - North Carolina

    I appreciate your blog and country wide comments. It is an interesting point made in one comment that a good number of appraisers need add’l work (ie. teach, brokerage, etc.) to meet their income requirements. I am blessed with a spouse that also works outside the home and with our combined income we are “ok”. The scope creep issue is real and we all know it. It strikes me that the amc’s think they should get the “buffet complete” when only wanting to pay for the single entrée meal. I do blame some in our profession for taking the low fees and continuing the amc’s perception that all of us should thus do all they request (ex. photos of water heaters, elec. panels) for the cheap fees. It really should be expected that for more work the customer should pay more. We all need to have the courage to quote a fee we want for our quality work and accept no less. It really appears that the amc’s are trying to make a “commodity” product out of appraisal reports and they are not! Appraisals are custom work every time, as all properties are different to varying degrees. We should be paid for our experience and expertise in the analysis of the individual properties and respected for the quality we bring to the real estate transactions we analyze. We need to CHARGE FOR WHAT WE DO!!

  11. Hey Guys,
    I have read quite a few comments and articles regarding our fees, but the reality is that not much has changed for us appraisers.
    However, the fees for the appraisal services are increasing. To confirm this fact, I spoke with title companies, realtors and past clients who are currently using Appraisal Management Companies (AMC’s) and have access to the final prices of our products.
    After speaking to parties who requested the appraisal services through some of the AMC’s, most of them were quite unhappy with high prices and low quality of work.
    That brings us to this article with one of our colleagues and “A la carte” ordering.
    We can take quite a few industries to present as examples of pricing but I will stick with the easiest example of every day common sense.
    Housekeeper will charge more to clean larger and dirtier home vs smaller and cleaner, the same as surgeon will charge for operating on your brain vs your leg.
    More complicated, complex, better cost more.
    However, in our industry, Appraisers performing more complex or more time consuming assignments are being paid less than the performing the simplier ones. (Acreage, water front, large GLA, mother-in-law suites rural areas vs cookie cutter homes, small GLA, urban areas, etc)
    Our industry went even further than my examples of the surgeon and the housekeeper by establishing one fee for any house anywhere in United States.
    Are we only industry, where the common sense does NOT apply?

    There are many reasons why, the parties ordering the appraisal services through AMC’s are not happy with the final product and the price.
    (Good appraisers leaving the industry or finding better paying work elsewhere, other appraisers are cutting corners to survive and more)
    AMC’s trying to maximize the profits by ordering the cheapest appraisals with the fastest turn- around times and selling them for the highest fee market would bear. You can probably name many and many more.

    We as appraisers can NOT be paid by the percentage of the sales price like majority of Realtors or Mortgage Brokers, but maybe the AMC’s could and should.
    If the industry was able to derive our fees without any complicated formulas, there should a simple way to derive/establish “Reasonable and Customary fee” for AMC’s in percentage of Appraiser’s fee.
    In my opinion, that would motivate appraisers to perform and produce much better appraisals, obtain more education, it would make the parties requesting the appraisal services more satisfied, it would justify higher fees and AMC’s would promote the best and most expensive appraisals to increase their share.

    Since, I have to go back to work, I will just say;
    Thank you very much to ALL of you who are taking the time and resources to help and stand up for our disappearing industry in everyday life without any recognition or pay !!
    God Bless

  12. For the last year we have come up with a better answer for AMCs.
    Almost every week or certainly 2 weeks , we get a solicitation from some AMC announcing their new expansion into our area or an Email stating that they have orders in our area and need appraisers to sign up.
    We have developed a standard answer:
    “Thank you for your interest in ________________________ Appraisals, However at this time we no longer do appraisal reports for AMCs of any kind”.
    Doug_________
    _______________________Appraisals

    That decision has been a relief and all of our work now is full fee and with reasonable turn times and no silly requests which do not add to the quality or credibility of the report and which are not FNMA or FHA/USDA requirements.

    Also I am sure most all of us are not complaining about being asked for revisions where-in we made a mistake. Its the over the top revision requests that AMCs can come up with . Most of which are sourced from the ridiculous promises the AMC made to the client in their desperate pitch to gain the business connection. (ie) ” We will require 4 day turn times” We will require at least 2 comps that are less than 90 days old” and etc. etc..

    Doug

  13. Dustin, you never stop amazing me. Without a somewhat free market the lenders have been in charge for years and have continuously added things to the assignment above what is required (USPAP). The Dodd/Frank bill specifically gives the appraiser the ability to ask for an additional fee based on the scope of work. Not that its the answer, but the regulators even understood that what is being asked of us can vary significantly (USPAP compliant versus Streetlinks 15 pages of guidelines) and we should bill accordingly. I have been preaching for years and have had limited success, however the public, the lenders, the AMC’s, etc., need to have a crash course as to what is being asked of us (USPAP). On a side note, those states that are asking for and getting fee studies for establishing standards (Louisiana), should clearly spell out the fees for a USPAP report, and other services. My other services are for additional comps, expanded inspection instructions, unsupported requests for value reconsiderations and the customary and reasonable fees need to take this into account. Excuse me Dustin while I select my nugget count of choice from McDonalds and am told I get one sauce for a six piece, 2 sauces for a 9 piece, but a la carte, I can buy other sauces for 10 cents each. Separate the fees and services on the surveys so we as a profession can establish what is typical.

  14. The Appraiser Coach

    Thank you for all who have participated with your feedback. I never know which articles will get peoples’ hearts pounding, but this one obviously has. I appreciate and respect all points of view. I don’t normally chime in on the comments section, because I’m a believer in putting my words out there and then allowing others to debate various aspects. In this case however, I want to make a couple of clarifications. It is apparent to me that my tone in this particular posting came off as “holier than thou” and a bit condescending. My apologies for that. There is always a disconnect between how I actually feel and what ends up on paper when you’re trying to communicate in the written format. I can assure you that I am as mindful of my place in this profession as anybody. I’m just a humble schmuck with the typewriter and a microphone. Secondly, I want to make sure that I make clear my position. Specifically, as it relates to my philosophies regarding economics. I am a free-market guy. Any of you who have followed my blog and podcast episodes knows that I am a huge advocate for being a business owner and not just a technician. You should demand to be paid fair market for what you do. I am not against the a la carte model. My point was simply a reality check. In our current environment, if you are going to work for AMCs, the a la carte method for every piece and part of the appraisal process is not reality. If you choose this model with non-lender work or in house lending, you may have some success. But if you want to work for the big AMCs, and I am respectful of those who choose not to, I don’t see this model as being effective. They will dismiss you without further argument. This is especially true with TRID. We may not like reality, but reality is what it is. With that, I encourage all to carry-on the dialogue.

    1. I don’t think it came off as holier than thou at all. I think you were spot on. Appraisers, put yourselves in the shoes of that AMC exec. If an appraiser told that same thing to you, you know what YOU’d be saying? “See ya!” We don’t like to admit it, because it’s scary, but appraisers are a dime a dozen to AMCs. We are expendable. And there’s no unity in the profession, no matter how much appraisers beat their chests and say “we need to work together to get fees up and fight scope creep”. That’s true, but those same appraisers are also business owners, husbands and fathers, wives and mothers, and they will make business decisions in order to get a paycheck and feed their family. Ultimately, if you’re tired of the rat race you’ll do what this appraiser did and effectively tell the AMC that you’re not interested in working with them anymore (at least not on their terms). But don’t be surprised if your work dries up because it’s likely another appraiser will agree to those same terms you just walked away from.

  15. Dustin, with the battles being won on a state by state basis (Louisiana / fees) and with AMC regulation set to take hold in 2.5 years, ALL STATES WILL BE REQUIRED TO ENFORCE POLICY INCLUDING APPRAISAL FEES! The standards to determine customary and reasonable appraisal fees in part, is by way of independent fee studies. WE as an industry must fight like hell to breakdown what is minimally required, and what our education standards are taught too (USPAP). WE must lead the industry and TELL our clients what a standard fee is (USPAP compliant) and breakdown a la carte what our services and time is worth. If on an a la cart basis our varying services are worth $25, $50, or $250 dollars, then these standards need to become know when fee studies pick up steam. If my car wash provider can breakdown and determine the expenses of 5 different washes, or on an individual basis determine what their 5 minutes of time is worth vacuuming, cleaning my wheels, etc., then why are our 10 minute, 30 minutes, or 5 hour blocks of time not considered billable a la carte? WE the appraisers need to set the standards on the upcoming fee study questions!

  16. I think the way to handle these sort of extra fees is at the time when the client requests the additional service. The appraiser needs to know upfront what the SOW is, then simply complete the appraisal. If the client then comes back for additional comps or some sort of service that wasn’t in the original SOW then simply provide your fee. It’s no different than going to a restaurant to order food. You order what you want at the prices advertised in the menu, then expect to pay extra for any other food that you might later order. I think providing an upfront fee schedule like this to an AMC is just going to result in being taken off their approved list, so wait until a particular item needs to be billed for separately and deal with it at that time. I don’t do any AMC work because of these problems. I also do very little lending work. I did get an in house loan appraisal order last week and charged $450. That’s much higher than what the AMC’s are paying, but my client got a high quality appraisal.

  17. Lol, this made me laugh. Dustin, you didn’t even mention how this could potentially violate USPAP!!! I’m sure this probably crossed your mind but decided to take your article in a different direction. There are some properties that simply cannot be appraised accurately with just 3 comps! Not possible. Furthermore, a “basic inspection”? What does that even mean? Finally, charging for revision requests when those are quite possibly (even likely) due to your lack of adequate explanation due to your “basic report”? I believe any Appraisal board would have a hay day with that one! Good luck buddy.

    This ‘business model’ is not really a business model at all, it’s a slap in the face to the AMC and surely what the appraiser is effectively doing is handing the AMC his “resignation” if you will (Dustin, your favorite phrase). 😉

    1. “it’s a slap in the face to the AMC and surely what the appraiser is effectively doing is handing the AMC his “resignation” if you will”

      Nearly EVERY AMC deserves to be “slapped” for their failure to pay reasonable appraisal fees. And as far as “resigning” from the AMC I would rather call it FIRING the AMC which I have done to over 20 of these “clients” over the past few years. Amazing how mant still want me to do work even at my “high” fees. Sorry, you have been blacklisted, so to speak.

    2. Jacob, the argument is not what it takes to develop an opinion of value, but rather what is mandated as a minimum (increased over USPAP). Do you know what is required for basic photos? If the scope of work has been increased to include multiple street, front, rear, side, the house across the street then they should pay for the extra work. If an appraiser completes 350 assignments a year and spends 15 minutes per report meeting these EXTRA photo guidelines, than in the real world we spend 2 extra weeks working for free (350 X 15 minutes – 87 hours). If those 2 weeks are you planned vacation Jacob, I ask, what is your time worth? If we are to fully read and understand the 400 pages of new FHA guidelines, than why should we not know what a basic inspection includes Jacob? If my local McDonalds franchisee collects 10 cents per extra sauce I want, then is my $25, 50, or $250 not billable?

  18. When I started in this business 2005 we charged 350.00 for 3 comparable sales directly to banks, then came the lender required 4th sale, we said nothing. Then came the lender required pending and listing, we said nothing, then came the 1004MC – FOR FREE again.
    I have raised my fees, lost work with most low AMC’s, good riddance. Hold your ground on your fee increase people.
    FYI Puget Sound area $450.00 to$ 500.00 standard 1004 w/MC —no problem, if you charge less YOU ARE THE PROBLEM.

    1. “if you charge less YOU ARE THE PROBLEM.”

      Ever heard of “pricing competition?”

      If you demand $450-$500 for an appraisal order and I can make money by “selling” my appraisal services for $400, guess what?

      I get the order and you get to whine and cry.

      Tough luck…….LOL

    1. “And the industry wonders why there is a growing shortage of appraisers.”

      Which industry, lending or appraising?

      The only “industry” Ive heard of complaining about shortgae of appraisers is APPRAISAL industry.

      The lenders will be happy when EVERY res. appraiser goes away and they can rely on AVMs and that is coming much sooner than later.

      Dont believe me? Ask Corelogic what their plans are…..

  19. Dustin, I never think you are being condescending. Even if I disagree with you. Your ‘reality check’ is spot on, BUT it also overlooks another side of the business facts of life and yes, even the free market system itself. I also posted a flippant shoot from the hip response to an order inquiry a couple days ago from LRES. It was for some type of SFR on a busy cross town connector where “the zone has changed to commercial” and they now needed a commercial appraiser to do the sfr because of the underlying zoning (their words, not mine). I know the area well. I know the property types generically pretty well. Its nothing more than a legal conforming use within a “higher” zone. Since I had no intention of doing ANY work for LRES in the first place (I posted one of their ‘orders’ absent personal info on line not too long ago as a topic for derision), I simply responded that my fee would be $1,000 (for what I expected to be about a $500 job) and turn around time would be sometime next month. Usually when I do this to them, they ignore my responses. This time I received a polite declination suggesting I may have been underbid *g*. Ya think???

    The point is that the “push back” is being felt among AMCs. I LIKED the a la carte appraisers response! Not for the pragmatism, but for the added ‘complaint straw’ that he sent to the AMC. Eventually the weight of all those straws may be enough to do to the AMCs what they did to the proverbial camel. Several other posters suggested AMCs are starting to feel the push back.

    For anyone else that does not particularly care if you receive a specific assignment that you know has too low of a fee, may I suggest you send them a copy of our (AGA) “Reasonable Fees Proposal”? http://mfford.com/html/c___r_fees.htm
    Its also perfect for filling out fee surveys when and if asked.

  20. LOL. I love it!!! I have tried the a la carte thing a few times, makes perfect sense to me. Guess how many times I’ve received that particular order? Zero.

  21. Dustin,

    What is truly laughable and shocking is that the vast majority of AMCs are willing to pay say, $325-$350, for an appraisal without consideration given to appraiser experience, education, etc. with no variances whatsoever for appraisal quality. The fact is that garbage appraisals by appraisers who are on the fast and cheap train get paid the exact same amount as appraisers who will provide a more detailed analysis of the market conditions, property characteristics, and you have vastly more experience and/or education. This is why appraisers who spend additional time working on appraisal assignments and who have taken for more appraisal classwork and who have far more experience are simply leaving the business. They are leaving the AMC business to the fast and cheap crowd who can do the appraisal inspection in fifteen minutes and turn over a report within twenty-four hours. This is where the AMC based appraisal business is going whether we like it or not. The fees are based upon the lowest common denominator and not on quality, experience, or education. Those factors simply do not get compensation in the AMC model. Unfortunately, the public at large are the victims who wind up buying cheap and quick rather than having their property valued by a true professional.

  22. As this blog is several months old I’m sure no one will read this, but here goes. With the state of VA setting customary and reasonable fees at their VA rate ($450) (02/23/2016) they have also set a starting scope of work (SOW) requirement. ANY appraisal guidelines from lenders that go ABOVE the VA standards will result in a requirement in higher appraisal fees. If they want a cost approach, that will cost extra! If they want to demand a 4th, or 5th additional closed sale as a minimum requirement, they will need to pay for that! If they want ANY ACTIVE OR PENDING LISTINGS, you guessed it, they will need to pay for it. Will lenders/AMC’s still DEMAND this data be in the report? If so, we MUST determine a la carte what our extra time is worth! Will they simply delete these extra’s so as not to pay for them? See my previous post above.

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