Dude, I Reserve the Right Not to Serve You Anymore!

OK, let’s face it:  real estate appraisers are in the service business.  We provide a service – real estate appraisals.  We provide those services to anybody willing to pay for them.  That’s what service providers do.  To which you say, “Dustin, you have a deep grasp of the obvious.”  Well, let’s go a little deeper.

Part of what I do is stay in touch with local real estate brokers and appraisers.  Some of us have a local restaurant we frequent.  At the front door is a sign letting all patrons the management reserves the right to refuse service to anyone.  I’ve never seen this restaurant refuse service to anybody.  You don’t make money turning away customers, but the management of the restaurant reserves that right.

That realization got me thinking; do appraisers have the right to refuse to provide service to any potential customers?  I surely hope so!  And it is a right that I think sometimes we do not exercise often enough.  Let me give you an example.  To keep my finger on the pulse of what’s happening in real estate appraisal across the country, I spend time on Facebook and the other social media.  Sometimes the comments on those forums can get really heated, with appraisers accusing clients, AMCs, lenders, other appraisers, and so forth of the most awful actions.  AMCs are a favorite target of the vitriol on these forums.

Against the AMC industry in general appraisers hurl the accusations that the AMCs fees are too low, their turn-around times are too short, their stips and too frequent and stupid, and with their ROVs they send sales that are utterly not comparable.  Clearly, they are just trying to force the value up to support the broker’s inflated listing price (thus inflated commission).  Whether these accusations are true or merely appraisers’ pet peeves is irrelevant for this discussion.  So let’s get to what’s relevant.

For the purpose of this blog, let’s assume these accusations are true.  Let’s assume AMCs are Satan’s malevolent spawn.  OK, there is not much we can do about that.  But instead of bitching at them (uselessly and irrelevantly, by the way, since the lenders want their services), why don’t we just fire them?  Why don’t we just refuse to provide them service, just like the restaurant does?  Why don’t we take off our frilly pink tu-tus, put on our sweat- and grease-stained overalls, and get to work getting clients who recognize the benefits of our services?   

This is not to advocate firing all of your clients between now and tomorrow morning.  It does mean, however, sitting down with a list of clients, ordering them by the amount you billed them last fiscal year, and then firing the bottom 10%.  Then it means the next time one of the surviving AMCs calls with a rush job and a low fee, you professionally reply that it will take X amount of days, and the fee will be X amount.  This will get their attention.  

If, after three more assignments that AMC sends your way it is clear they are not willing to compensate you to do the job correctly, then fire that AMC, too.  Mules are generally stupid.  But you hit one up-side the head enough times and they will generally do what you ask (if, for no other reason, so you don’t hit them again).  AMCs may be smarter than mules, but they won’t change until they have a reason to change.  And if you keep taking their jobs with low fees and short turnaround times, they are not going to change.  And whose fault is that?

It’s OK to vent on social media forums.  But venting (a passive activity) must give way to action, otherwise nothing will change.  So refuse service to those who are not worthy of it.  Then, actively seek out those who are worthy of it and provide it to them.   

For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode: 

31 Comments on “Dude, I Reserve the Right Not to Serve You Anymore!”

  1. Pingback: Dude, I Reserve the Right Not to Serve You Anymore! - Appraisal Buzz

  2. Nice Article I do exactly that Fire Them and I know we cant talk fees but I do quality work and If your fees are all about the
    cheapest Im not your man

  3. ive fired many amcs over the years. some of the worst are no longer in business. there are still many that pay low fees and request ridiculous revision requests. stop working for low fees and stop making stupid revision requests. its your report. you dont have to make any revision to it that you dont want to. and im not making a comment in my report that yes theres a plat map in my report and then sending it back to the client. thats not a uspap requirement when the amc reviewer is incompetent or just lazy. there are fewer and fewer appraisers everyday. stand up and demand higher fees and better revisions from amcs. love it when the reviewer tells me “Im an appraiser too”. i tell them yeah but you must not be a good one if you are working for an amc for $35k a year.

  4. I agree with the information in the article, but it only goes partway. Not all residential properties are the same and therefore do not command the same fees. Many appraisers accept any assignment blindly only to find out after accepting the assignment that it’s very complex and will take considerably more time and effort to complete. It seems that most AMC’s and other clients have a set fee for a residential property no matter how complex. It’s up to us when making the decision to accept the assignment or not to inform them of the complexity. Another issue I have is experience. Why do all lenders and AMC’s think we’re all worth the same amount? Why would an appraiser with over 20 years experience in a particular market accept what a newly licensed appraiser just getting started makes? Doesn’t experience count for anything? Even the fry person at the local grease pit gets a raise as they gain more experience and can contribute more to the organization, but when we try to raise our prices the assignment gets re-assigned to the lowest bidder, or we’re told that the assignment has already been assigned to another appraiser. Go ask your mechanic to do a complete brake job on your car for the same price he charged 20 years ago and see what he says. Low fee AMC’s and lenders will always find an appraiser willing to work for low fees mainly because they don’t understand their business and what they are actually worth.

  5. I’m with Gary Marsh. I am definitely not the cheapest, although I do work for several AMC’s. I decline their typical work and wait in the background for my time to pounce. When a complex assignment comes up and I can see they are having difficulty placing it, I make a bid that may make them choke for a minute until they see that I’m the only willing victim. 🙂

    Jim

  6. The best way to fire them is to ignore there idiotic “Bid and turn time” emails that come into your box. There so much business now, that we
    are the kingpins or the kingmakers, whichever you prefer. They need to treat us with respect.

    1. their. is. appraisal correction. Too early to be responding in a appraiser’s forum. Better drink my coffee first.

  7. Going back a year or two…I was running an office doing strictly residential appraisal work. I was firing clients at a rate of about one per month. It was always some variant on the same theme – phone call from the client (usually a mortgage broker in those days) asking that I revise the value so they can make the loan. When I would inform them that they just asked me to commit fraud, the common response was, “No one said anything about fraud, I just need the appraisal to come in $10,000 higher!” *facepalm* It was usually followed by the threat of no new business if I didn’t play ball. To which I always replied, “That’s fine, because as of today I’m no longer accepting work from you.” Most were incredulous. I don’t think they had ever been “fired” by an appraiser before. Eventually, I got so fed up with it, I turned over the business to my partner and went to work managing an appraisal department for a lender and made damn sure no appraiser we worked with every got treated that way!

    1. I ignore the bid requests. If they are looking for a cheap appraiser, I’m not the one. Generally if it is a complex assignment, they will call in a day or two and ask if I can do the assignment. If this happens I know they didn’t get anyone qualified and I give them my highest fee. I have 24 years experience and I won’t even get out of my chair and walk to the computer for the fee some of them want to pay. Not worth my time!

  8. My problem is more the AMC in another part of the country telling me how to do an appraisal in Georgia. I had a complaint last year because I used townhomes as comparables to a townhome. It came down to value, I’, sure. The homeowner indicated what he thought the property was worth on my visit. My appraisal came in at a little over half. The AMC said I should consider the park adjacent to his property. Oh, you mean the park that cars drive through the middle of it at 70 miles per hour? You want your kids playing in that park? Another, “better” appraisal was done not using attached housing. He made adjustments based on the fact that his comparables were detached. Huh?!?! And where did that adjustment come from. I hvaen’t exactly fired them. I just ignore what they send me unless I can walk to the subject from my office.

  9. I had to fire one of the realtors that used me for pre listing appraisals. We set up a lower fee deal a few years back that was supposed to be beneficial for all parties involved. I was ok with the lower fee just to not have to deal with revision requests and some of the other AMC nightmares. All was good until the realtor (who ordered the appraisals) continually passed the buck when it came time to get paid. My normal procedure was to collect up front from the seller, but often times the home was vacant or I was granted access via a lockbox with nobody home (my preferred inspection scenario). Most of the time a check was sent to me within a few days or even left on the kitchen counter. Then I had a couple of appraisals that the seller did not feel like it was the appropriate value. Not sure why these expert sellers needed me to do an appraisal if they already knew the value? Needless to say, the few “experts” decided they shouldn’t have to pay for an appraisal that wasn’t to their liking. Now I have to change hats and become a debt collector when the realtor who ordered the appraisal says they will send the invoice to the seller again. Months pass and no payment and the big shot realtor/broker won’t take the financial responsibility and pay the outstanding invoice. This happened 3 or 4 times, but I did collect on a couple of them after chasing the money down. I finally had to end the deal when he called and needed me to run out and “knock one out” for him. I made it clear that I still had 2 outstanding invoices from assignments completed earlier in the year. He swore he would get it resolved but never offered to pay those invoices, rather he was going to re-forward already sent invoices. Well that had a 50% success rate. He did state that the one seller was not happy with my appraisal but they did sell the home for slightly less than my appraised value. I never received that payment to this day. I guess my question is, if my service is valued why am I not compensated when I fulfill my portion of the agreement? I finally stopped answering his calls. I think he got the message but still never paid that invoice. I almost want to call and tell him “your’e fired” in my best Trump voice. Anyone else ever have to deal with this?

    1. This is constantly one I never understand when they want an appraised value of property to know what its worth in order to know what to ask, yet complain. What was the point if they had a pre-determined value already. If they don’t like the appraised value on it they don’t have to show it to the world.

    2. I try not to even start the work once I inspect if I’ve gotten no payment and I tell the realtor that. Then they try and hurry and get it to me. It’s easy to fall in that trap of trusting it’s coming when there’s already a relationship. I regret it every time I break that rule. With it busy right now there’s no need to ever risk it. I’ve been using Venmo and cashapp more to collect if needed. Mail is just too slow. I just teach them how to use it and they end up liking it.

  10. Mules are NOT stupid, but they are stubborn! Neither are Clients or potential clients! They are getting what they want. So, who are the stupid ones?, or should I say insane ones? Does the lay persons definition of insanity ‘doing the same thing over and expecting… different results,!’ ring any bells? I’m just saying!

    1. Yes Ben, they are stupid because they are breaking Federal Law by trying to (influence Value) by (Stealing money from the banks). Anyone willing to make that mistake is not that SMART.

      Getting what you want is not the definition of being smart.

  11. Nice article. I too agree. I get requests all the time and the client wants a fee and a turn time. They are shopping. I get it. The appraiser in my opinion sets the appraisal fee. If the client does not want to pay it, I move on. I also have AMC tell me that they want me to change the report to some obscure strange request like removing a comparable sale. I refuse and tell them that in this appraiser’s opinion the request is not in this appraiser’s opinion acceptable. I have also said that if I do what you want, it will be your report and not mine. Here is something that I added to a report when a client wanted to change the entire report from a 1004 to a small income with no added fee. It is called a triple constraint rule. The client paid the added fee but, I did not get any new assignments. I moved on. The idea here is stand your ground. YOU are the appraiser.
    Triple Constraint Rule.   Scope, Time and Cost. If one changes, one or two of the other items are changed. This applies to all appraisals.
    Scope: Many requests fail on this constraint because the scope of work request is either not fully defined or understood from the start. When you increase a appraisal’s scope, you will either have to increase its cost or the time.
    Time: As the saying goes, ‘time is money’, a commodity that slips away too easily. Appraisal’s all have a deadline date for delivery. When you reduce the project’s time, you will either have to increase its cost or reduce its scope.
    Cost: All appraisal requests have a finite budget or fee; the customer is willing to spend a certain amount of money for delivery of an appraisal or service. If you reduce the project’s cost, you will either have to reduce its scope or increase its time.

  12. Wow look at all the comments this is something all appraisers get fired up about. Most of the comments are AMC’s pay low fees which is something I have not seen in my market. I guess most appraisers have not been around long enough to remember the $200 and $250 appraisal which is what most everyone got 15 years ago. I my opinion the average $400 an appraisal is something I did not know if I would ever see in my lifetime. What I have seen lately is AMC’s are worried less about fee and more about service and they want the appraisal back as fast as possible and if you can be completed reports back in 48 hours or the same day as inspected ifn you can’t get access you will keep them happy and stay very busy. I do not ever drop any clients because you never know when that bottom 10% goes to the top 10% which I had happen recently. A AMC that was ordering 3-4 appraisals a month started sending me everything they have in my area and that went up to 1 a day because my turntime is so fast because we do team appraising. Alot of times the volume is based on your performance and my opinion traditional appraisers that go out measure the property come back to the office and complete the report days after the inspection and do all the work themselves are dinosours and going extinct. When you have a team and a process you do not have to worry about complex appraisals or unreasonable turn times because a system is being used to complete all the reports in a repeated process that does not require extra work to complete and is most always done the same day as inspection. Everything is geographic and the typical fees in your area determine alot. If you are in a non-competative enviroment and getting $700+ an appraisal you can be more picky and do not have to do them all. If you are in a area with lower fees and alot of certified appraisers I would suggest getting and keeping every possible client. Appraisers, AMC’s, and markets are all unique and in making business decisions you have to put it all together and my the decision that is right for you personally which could be very different from your piers.

    1. I never had to settle for those low fees 15 years ago. I feel bad anyone ever felt they had to. Sometimes I find they only pay that because they can always find a few when it’s slower who will settle for that. No one has to right now with this volume. Hopefully when it slows down we will continue to demand a reasonable fee.

  13. Valid points. Providing bids for appraisal is a service. AMCs should pay for the bids. If everyone charged instead of providing free bids the AMC would be forced to pay fair amounts. Bid charges can be applied to the appraisal fee.
    Over the past 5 decades I have found it beneficial to require payment at or before the inspection on private appraisals. It simplifies book keeping, helps cash flow and eliminates slow pays and no pays. Experience has proven that few appraisal request were withdrawn. 50 years ago an investor request a sizable assignment. He never responded when a retainer was requested, ergo one must assume that he had limited interest in paying for the service.

  14. Appraisers have every right to refuse service to any customer. Can you let us in on the secret sauce that will stop those customers from knocking on our (email) door daily, looking to get service? The requests for fee and turn time from customers that have never had a serving from our tasty appraisal bakery, are endless. But alas, currently appraisers are in control and can call the shots. Enjoy it while you can, it is rare that the demand for appraisers exceeds the supply of appraisers. Be nice and dont burn bridges. That low tier client can always change their stripes.

  15. amc’s are the ambulance chasers of the appraisal profession. They have managed to insert themselves in between the client/intended user and the appraiser. When they first came on the scene, it didn’t take me long to realize that I would never work for them. Never have.

  16. Never did an assignment for an AMC, quit doing mortgage work years ago (my wife mentioned about a week or so after I did that how much more relaxed and happier I seemed – my wife is a great observer). So now, my fees are higher, I am usually not rushed (there are exceptions), I do quality work for such things as estates, legal issues, things like that, and never have to answer to a review appraiser. And, if it is an assignment I don’t want to take on, I don’t take it. Life is good.

  17. Pingback: Dude, I Reserve the Right Not to Serve You Anymore! - Appraisal Buzz

  18. Fellow Appraisers just stop taking phone calls and only take emails. This stops a lot of issues and gives you documented prof of what they want to get you to do. It shuts a lot of issues down right there. And forward all there emails they send to you to your Lawyer so they see that your lawyer will be aware of the conversations. Take your power back.

  19. I wholeheartedly agree that if you have clients/lenders who are not fitting into your business plan, you most definitely should eliminate them, but you have to do it in such a way that is professional. I have had a couple of clients whom I’ve eliminated from my “approved list” but I have been perfectly honest with them (the fees do not fit my business portfolio, the turn time in this particular area is unrealistic, the 30, 45 day waiting period for payment is unacceptable). Fees are a personal preference; some appraisers are running a household, some are retired and are supplementing their income, some have spouses to share the load, etc. I find myself criticizing those appraisers who accept the lower fees but I should not; I don’t know their circumstances. I come from an era where I was receiving, a split fee (approximately 1/2) per appraisal completed and I was completing 10-12 per week to maintain my single parent household. So when I finally went out on my own, the “whole” fee (no management company) was a significant pay raise (low by today’s standards considering the added work because that was 15 years ago). The industry changed (more work/extra research fell on the appraiser, liability increased, analyzing data became a challenge because of erroneous information provided in MLS, town hall, etc.) AMC’s came on board so you now had to become your office staff. Answering emails requesting an inspection date, asking how many times you called the borrower and when, did you complete the inspection, will the report be in on time, when will we have that revision, etc. It took me years (approximately 2) to increase my fees to where they are today. One year of almost no work; but increase they did. If you think you deserve more, then ask for more but be ready for no. Can you handle no? Are you going to play the waiting game? Or are you going to give in? Because if you give in, game over and don’t complain. I could write all day about the injustices and the disrespect that we the appraisers have to deal with every day, all the way down from federal regulators to the borrower, but honestly I would be writing all day and I’m not sure there is a market for a book on The Everyday Life of an Appraiser. I love being an appraiser, it’s been good to me and I’ve been good to it. AMC’s may not disappear completely but they are dwindling. They are running out of appraiser’s to use and abuse. You have to stand up for what you believe in and you have to be ready to stick to your guns.

    1. Thank God it’s busy. No one had to accept low fees this year. There is a real shortage of appraisers. Get the fees you deserve right now. They will pay them. When it was slower it was different. The more the appraisers accepted low fees the worse it got. I never had to accept low fees, but I know some people felt they needed to in order to get the work. They probably didn’t but they didn’t have the confidence to say no.

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