‘Opportunity’ to Work for Free is Not a Plan
I gave this ‘opportunity’ further critical analysis in terms of time spent versus the fee income potential.
Appraisers, I’d like to disclose a personal ‘opportunity’ that was presented to me last fall, early winter.
A company with AMC roots was, or is, recruiting people to become “property inspectors” with the resulting reports potentially fed to other appraisers who do HYBRID, or maybe even DESKTOP reports. The GSEs never intended the DESKTOP report to incorporate separate ‘property inspections’ from a hired third party, but that’s been the evolution because they just look the other way.
Last fall, due to the slowdown we were experiencing then, I thought “well, maybe.” And I told the recruiter I’d do 3 of these assignments to give it a try.
Well, I was still busy with other appraisal assignments, and then came down with a very bad cold, (flue or mild COVID) which knocked me out for about 3 weeks. I never was able to complete their required on-line training. But during this interim period, up to a few days ago, I gave this ‘opportunity’ further critical analysis in terms of time spent versus the fee income potential.
The recruiter revealed that vendors would go to properties up to 20 miles away, presumed based on a radius measurement from the office, do interior and exterior observations, record data on an app on the phone, and provide a sketch using another fairly well-known ‘measurement app’ that you’ve all read about by now. Then that ‘stuff’ would be uploaded via the internet. All this for no more than $120.
Yesterday, I sent an email to a different company rep who re-inquired about my coming on board with them:
“I’m told you only pay $120 maximum, and expect an inspector (in this case a Certified Residential Appraiser) to drive up to 20 miles radius in a service area. Initially that sounded marginally reasonable due to the slowdown in appraisal work, so I considered adding this to my available services to clients.
Well, let’s see how this ‘pencils out.’
My base hourly fee is $50, which by many standards is quite low. I know other appraisers charge more.
In my area, due to suburban/rural roads, traffic, geography, etc., driving up to a property within the 20 miles radius one way can take up to an hour, depending on specific location.
- $50 billed (less if closer)
Then, doing the on-site observations and using CubiCasa can take up to 45 minutes or more, depending on the home size, design, room counts, etc.
- $37.50 billed (minimum)
Then drive back to the office.
- $50 billed (less if closer)
Coordinating access, then uploading the assignment via the software, doing the necessary business bookkeeping, etc., I’m estimating another 30 minutes minimum.
- $25 billed
That rough guesstimate equals to $162.50 in professional billing, at a bare minimum.
This means for every assignment involving these kinds of details, doing one at a time in an area, I would be unable to capture $42.50 in professional service billing. In effect, working for free.
From your perspective, does this look like a really good financial opportunity for me??
If the service fee can be moved up to $190 per assignment we can move forward.
Thank you for understanding.”
This morning, the recruiter sent me this message:
The point of this message is “know what you are worth.”
Far too many appraisers don’t have a clue about what it takes to break even, let alone make a reasonable profit. That’s why AMCs are able to bully appraisers into lowering their fees, just so the AMC can stay in business.
Far too many appraisers fail to understand that AMCs cannot function without appraisers. But appraisers are far too willing to race to the fee bottom just to keep a few dollars rolling in.
It’s stunningly stupid to do that. But it happens every time order volume decreases.
And, for the most part, it happens because appraisers fail to communicate with their local peers and establish a policy about holding individually established customary and reasonable fees steady, despite pressure from the AMCs to force them down.
Working for peanuts is not a ‘plan’ that works well for appraisers.
Dave Towne on e-AppraisersDirectory.com
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Was the company called True Footage ( https://truefootage.tech/join-us?gh_jid=4801950004 )? The appraiser coach sold his appraisal business and is now a W2 employee for this company? Asking for a friend.
Seek the truth.
No. Just curious Bill…..do you ever have anything nice or good to say about anything concerning people in our line of work? Asking for a friend. The friend says you normally act on web forums like a pit bull dog always on the prowl.
I can appreciate your contribution to this site and the profession Dave, but related to this article, the people/company we are talking about are the ones who will not pay you a professional wage. In fact, as other posters have said, if you truly add in other business expenses your income per hour would be well below $42.50.
Why celebrate and say good things about AMC’s, and or hybrid / inspecting companies as they like to serve appraisers hot water on a cold day in a dirty glass and want you to do the dishes?
Regarding me being a “pit bull dog always on the prow,” I say thank you. Perhaps if there were more pit bulls in our profession instead of snowflakes then maybe AMC’s wouldn’t have 80% of the volume, and we wouldn’t all be called racist. Too many people have put their own ambitions and greed in front of the publics trust, and as a I say, stop putting profits before principles.
Seeking, finding, and telling the truth in the appraisal world post hvcc has unfortunately not been nice or good. Tell your friend hi.
Seek the truth.
Bill Johnson has a knack for going straight for the truth regardless of how ugly the truth may be. I have never read a post from the guy that did not hit the nail Square on the head. True footage came to mind for me as well while reading the article. Nice article by the way.
Although I don’t comment to obtain upvotes or make friends, I appreciate the feedback Retired Appraiser.
Seek the truth.
No. Just answering the question.
Thanks. Answering for my friend.
Seek the truth.
Sorry – I meant Dave’s question (is it worth it).
I only do VA now. So far VA has not fallen into this trap. VA has desktop and Hybrid products. However, they don’t want you to use them at this point. Apparently, someone with VA has enough sense at this time to realize that a good appraisal is needed to protect VA and the buyer and owner in deciding on what is usually the most expensive purchase one makes in their lifetime.
The industry should use the VA model as the standard for appraising PERIOD. It’s not perfect, but it’s much better than AMC’s.
At $120/report, I’d have to do 1125 of these “observations” a year to make the money I’m making now. I’d have to go back into the corp. work if all I got was $120/report.
Mowing lawns pays better than that, less oversight, less liability, with an open ended hiring potential that does not require professional licensing. Easier clearer rule sets to follow as well. It appears the amc industry is managed and staffed with people whom could not even make it in property preservation.
Everyone knows that a clean cut lawn, a lockbox, rudimentary cleaning and dead animal removal are far more important towards guiding a maximum recapture of market value than a silly market value appraisal. Trust us, we know what we’re doing. Amc’s are obviously captured by investor interests, purposefully diminishing the valuation position so they can feed defaulted properties to investors at extreme discounts. The only thing which stood in their way was appraisers. The corrupted GSE managers whom are already in bed with big investment firms know all about it. Amc’s are not held to non advocacy rules, that’s all you need to know.
https://www.aslpreservationsolutions.com/2017/03/05/a-guide-to-pricing-matrix-of-nationals
https://mcs360.com/wp-content/uploads/2022/03/USDA-Servicing-Guide.pdf
https://servicing-guide.fanniemae.com/THE-SERVICING-GUIDE/Part-F-Servicing-Guide-Procedures-Exhibits-Quick-Referen/Chapter-F-1-Servicing-Guide-Procedures/F-1-05-Expense-Reimbursement/1089914791/What-are-Fannie-Mae-s-defined-expense-reimbursement-limits-for-property-preservation.htm
https://safeguardproperties.com/wp-content/uploads/guidelines/FNMA/ppmatrix2.pdf
A terrific observation and thoughtful commentary.
Several AMCs are only offering $50-$60 for desktop that includes info from a third party drive-by. I don’t care if it is in a cookie cutter neighborhood it will take you at least an hour & a half to put together a USPAP compliant work file and type it in on their clunky on-line software. Almost all of the home equity work has gone to this model. Most of the conventional refinances and many conventional purchases have gone to desktops with a third party interior inspection. That is a huge chunk of our business that has disappeared, gone, poof, Folks, this work isn’t coming back anytime soon. Shame on all you appraisers doing these desktops for $15/hr. And the powers to be complain because they want us to replenish our ranks. Why would you get anyone new in this industry based on these assignments models? And let’s not get me started on the appraiser bias assault. I wish we still did on-site classroom education so I can spit on all of you appraiser accepting this low fee work.
Radian Homogeneous makes it easy to take those fees. They have a realty agent fill out a bpo, pick all comps, made adjustments, then the appraiser blindly signs off on it. It’s called an appraisal reconciled bpo. This should be clearly defined illegal unethical practice for appraisers, it’s nothing short of letting someone else borrow your signature.
The people setting up these programs are idiots. They should quit while they’re ahead before excess embarrassment in failed ideas becomes more broadly apparent to their customer bases, just move back to full service appraisals and full fees. One can blame FNMA for signaling all this ridiculous appraisal modernization stuff, as the primary reason these companies bit that hook.
Taxes, you forgot to take out the taxes on your $162.50 to begin with that they refuse to pay you. You need to recalculate and find you’re not working for free, but at a loss after you factor in gas (taxed), cell phone (taxed), insurance (auto, E&O) costs (taxed), research costs (taxed), professional classes (taxed), License (taxed), wear and tear on your vehicle deferred taxes. Please recalculate and report your findings. Thanks.
Appraisers been to become “Spartans”. Just say NO LOW FEES. “HOLD, HOLD, HOLD”!!!!!!! Your ground and say NO to the income of professional devalued work. Which cannot move forward WITHOUT YOU. Appraisers are our own WORST ENEMY.
I try to figure $100/hour at a minimum for my time, including travel back and forth from the subject, driving getting comp photos (makes no sense), plus computer time. Many of my assignments are very rural with comps several miles away, I figure it all in, if the AMC doesn’t want to pay my fee let them get somebody cheaper; I always tell them that I’m not the fastest or the cheapest but the most thorough in my research, that does matter to a few AMC’s out there still. I research for every assignment as I am a member in six (6) MLS systems in Central NY as I have to use several of them for many assignments.
Mr Stachow, this illustrates an important workflow consideration for appraisers. When in the big city, you don’t have much ability to resist the discounted method with amc’s, they’ll just shop and replace. The amc’s have a consistent motivation to capture a higher variable fee rake, not return any cost savings to consumers, which pads their margins. The upside of metropolitan service is that one can simply drop all the amc’s, then carve out direct lender engagement clients, where even if you only get modest workflow, you can capture enough of them to successfully say we’ve completely dropped the amc model, increased efficiency as a result, increase the income base.
The opposite side of the coin is rural. Where due to population sparsity no matter how many direct lenders you may acquire and be in favor with, there simply may not be enough order volume to sustain. So the rural appraisers turn to amc’s and actually can be successful with raking higher fees from amc’s, because the amc is unable to substitute the appraisers service elsewhere. The downside to this is that the rural appraisers continued patronage to amc’s allows them to stay in business, allows them to continue behaving unethically to borrowers and appraisers alike in metropolitan areas. The appraisers getting ‘fair fees’ from amc’s have no understanding of how damaging their continued amc patronage is to their appraiser peers elsewhere, and vice versa.
There is no honest actual win or ethical avenue to disassociate yourself with the amc industry, no matter where you are at or how the engagement may shake out for an appraiser personally. In the larger picture amc’s are responsible for decimating an entire licensed professional body, restricting working opportunities, installing a pay to play system, defrauding consumers and appraisers alike, to the tune of a hundred and fourty thousand appraisers whom threw in the towel and countless tens of thousands if not a hundred thousand appraisers whom would have gained licensing and replaced them, simply having never materialized. This is not a regular consumer demand issue, but rather one of coordinated rackateering and purposeful exclusion of the majority body of appraisers from the ‘amc workforce’. Don’t go whistling past the graveyard just yet. An honest direct to consumer billing model would remove the incentives for amc’s to behave this way. So would a clear seperation of billing for the distinctly different service the amc provides (paperwork shuffling), vs the appraiser (actual appraisal product completion).
Quote this again I suppose; The real cost of the State is the prosperity we do not see, the jobs that don’t exist, the technologies to which we do not have access, the businesses that do not come into existence, and the bright future that is stolen from us. The State has looted us just as surely as a robber who enters our home at night and steals all that we love. Bastiat
Many measuring services charge $120 minimum. This one charges $120 for a one story home up to 2000 sf. Based on their pricing at https://www.realtime1.net/measuring-services/pricing, a 2 story home, 1200 sf on the main level and 800 sf on the second would cost $216.
Not sure they make much money.
“MeasureRight® is a service of RealTime Layout Solutions
We wish to thank you for using our services. It is most meaningful to us to be able to provide these services to you. Keep in mind that whatever profit there is in measuring your property is actually going back to help and enrich the lives of people in our great community”
“We give all the profit of the company to .org organizations that help and enrich the lives of people in our state and around the world. That means when you use our services, what ever profit there is in measuring your home is actually going back to our community! That’s a win/win for you and our community!”
This woke nonsense is not capitalism. If an individual wants to help, let them. If a company wants to cut out a portion of it’s profit to help whatever cause, let them. When these companies sit back in push working environments scheming how to short the vendor base to fund their pet projects, we’ve got problems. The tide is turning on this nonsense though. That’s largely due to a better informed consumer base whom is finally becoming aware that where they spend their money, does affect them personally. We can’t boycott these companies twice so just stay aware of who’s using your own money against you, then deprive them of said funds. These peoples dreams of utopia will simply never materialize outside of their illusionary echo chambers. The term hopeless idealists comes to mind.
As far as the measuring service pricing schedule goes; It is my understanding that a home depot carpet square footage measuring vendor gets paid more, with a less complex task. Yet again, another illustration of how a middle man request shuttling company simply erodes income and efficiency. If someone needs this service, why can’t they simply call someone like an appraiser to provide it. This middle management schtick is so pointless. Consumers are beginning to figure out the illustrious branding one stop shop approach merely results in lower quality service and less healthy communities. It’s an abdication of community ethic and social responsibility, to allow someone else to be in charge of distributing the benefit of your expenditures. A hidden tax by any other name.
Yes, many measuring services do charge more than we are offered. Here is the Kicker. They don’t have to belong to the Realtor organizations, like the mls. They don’t have to pay any licensing fees. They don’t have to take CE. They don’t have to pay anywhere near what we pay to be in business. Oh, yes, their fees they charge are based on different areas. Depends on how far they have to travel.
Mark needs to update his article to include third party desktops.
https://appraisersblogs.com/how-2-destroy-the-appraisal-profession-government-101
You just took me down memory lane. I was posting hobo with a shotgun meme’s, and actually ran across the homeless guy with a nice clean yard, lawnmower, and rake. Modern day homesteading. I think most of those posts aged rather well.
Oh hell, why stop now.
It’s good to see there are a few of us who refuse to work for minimum wage, even before considering how ridiculously much it takes to pay the set costs to be in this business. I agree with those of you who point out that we are doing this to ourselves. Stop embarrassing yourself and our so-called “profession” by working for less than fast-food wages!
Bravo Zulu! Appraisers that work for minimum wages should with draw from the “profession” they’re not appraisers or appraiser professionals. They are box checkers NOTHING MORE.
Does going broke refusing to comply with appraisal modernization and a corrupt amc middle management structure count? Asking for a friend.
There are 34,752 appraisers (licensed, certified, general) total in the U.S. There are far more in just about every “Profession” than ours. WHY do we squabble for peanuts?! This according to “Zippa The Career Experts” and their statistical data. Average age: 49. I’m older.
No that’s not right. There is a better source for that information. Not sure where but it floats by now and then. The last number I observed was 77k total active. I’m running with figures from a pre amc era of 220k total, using a roughly 80k today, to come about the -140k figure of licensee loss caused by the amc industry in a time of supposedly record appraisal demand.
https://www.asc.gov/appraiser#
Oh stupid, what is up with this new page space wasting for blind people format? The old small grid presentation was so far superior to this. email the ASC for the actual valid current appraiser count or somehow find a way to get all active and inactive separated. That’s rich, they will respond to a simple email in 5 business days. Not quite an industry standard…
ASC stats stop at 2016. 6+ year old data.
Say what? Why? Aren’t they on the government payroll? Wait, did I answer my own question?
IRS has stats which are likely unreliable. They use codes to categorize and likely improperly categorize licensee appraisers with many other no license required valuation services.
Send them an email and ask for current data. Where did the 80k and now down to 77k total licensee populace figure come from? I recall that being somewhat of an official figure just in the last year or two.
In CA alone there are 9,178 active licensees ( https://brea.ca.gov/html/bureaustats.html ). I used to keep track on a quarterly bases (not any more) but for several years CA was losing an appraiser a day. Of note, and again I used to keep track (used to be 900) but there are currently 799 active appraisers in San Diego County, 470 in Riverside County, 1,114 in Orange County, and 1,703 in Los Angeles County. All counties are within 2 hours of each other, and per above there are 4,086 competing appraisers. For comparison, the entire state of Idaho is believed to have less than 700 appraisers.
Seek the truth.
When acting as an appraiser, wanting to understand your effective competition volume for mortgage lending in any given locale, the FHA appraiser roster is the only thing that really matters. If not operating within the confines of mortgage lending this is not all that important. Pop in your county, city, zip. Run three different searches, only fill one box in addition to the state, check the returns. Quite interesting is to also track addresses and see how many intrude into others coverage area with virtual office addresses, you’ll find that now and then in busy areas.
https://entp.hud.gov/idapp/html/apprlook.cfm
Speaking of Idaho, things to be aware of. Image attached.
I think this is a Great Idea. People in the state are tired of WOKE Portland.
If only these events were as simple as a popular tagline. It’s more of a referendum by the public at large. Sort of a step back from this idea that the most populous centers should rule over the people whom live completely different lives than them in other less populous locations. The central planners these days, they just don’t seem to even recognize other peoples points of view.
Colorado has floated this idea twice in my recent memory. So many years ago there was an effort to break off the SE portion of the state, I think they were to call it the State of Jefferson. Hope memory serves correctly. It was a substantial portion of the state.
Then recently the entire NE Weld county area had talks about succeeding Colorado into the state of Wyoming. As Wyoming is so sparsely populated, with Cheyenne being right on the border, there was some official statement issued that they would love to have Weld county. It would have been an economic boost to the max. Several political issues stood in the way, and Weld county like many other counties in CO remains in a somewhat captured state of existence. (I copied the photo below a few weeks ago, not sure what came of it, just super interesting and inspiring to see it happen.)
Breaking up is sometimes necessary and it’s been accomplished before in this country. I give you West Virginia.
I say #eliminate the lines! Why do we even have states? The Feds dictate everything anyway. The United in to one State of America.
If that were the case (the Fed runs everything), The whole country would have been shut down between 2019-2022.. The Red states remained open. States Rights.
Eliminate state borders!?!? Eliminate state sovereignty? When federalism itself has already become severely imbalanced by a federal government which has clearly overstepped it’s boundaries and authorities over and over again? Place the already estranged citizens even that much further away from representative government? That is a very poorly formed idea. You just advocated for total central control, which comes with it substantial departures from all our sacred rules; the constitution, bill of rights, the declaration, amendments there to, the three branches of power, all gone. There is a saying for this kind of thinking; Welcome to the reservation. Turn the entire americas into one massive dependent nation state?
As if three different countries long standing rules and traditions can just blend together. That can not happen any more than the 50 US states all agreeing. That’s socialism. If you eliminate state lines all that’s left is country lines which are already being purposefully eroded. Don’t be so naive as to think those state lines which form the balances of power within a representative governance system are irrelevant. Think of the USA as 50 independent nation states, because that is what we are, with a federalism aspect and the complex issue of native domestic dependents.
I’m over here arguing for a reconsideration of the permanent apportionment act to expand effective representation, only to be told eliminating borders is the better solution. Where did the representatives go? We’ve got a real Houdini up in here today. This is such a stale and already long since discredited proposal. Please be more careful what you wish for. Tell me you’re not actually a wef nwo north american union supporter. Put a hash tag in front of irrational concepts to make them trendy for automatons? In which federal occupation zone do you reside?
‘Another basic concept embodied in the Constitution is federalism, which refers to the division and sharing of power between the national and state governments.’
https://en.wikipedia.org/wiki/North_American_Union
https://www.pinterest.com/pin/543387511261186063/
https://www.ncsl.org/quad-caucus/an-issue-of-sovereignty
You’re going off the deep end. I didn’t say anything about erasing state borders. But I do advocate for a state dividing when Portland (population concentrate) dic-tates to the rest of the state “how it’s going to be”. This is EXACTLY why there is a “West Virginia”. Maybe I read something wrong in your rant above. We live in a “representative” country/States. When those in the capital do no do the will of the people there own then I say let them split. We did this very thing to King George.
The reply features become confusing when threads get this long. The comment was response to Bryan. My entire life is off the deep end.
The west virginia reference is not contemporary, which is the primary difference. It’s been a long time since we’ve seen something like this.
I understand how our country works. That’s why I live in Florida.
Sort of related, but here is a recent comment I provided in one of Dustin Harris blogs ( https://theappraisercoach.com/going-all-in/ ).
“With 900 licensed appraisers in San Diego County, and several thousand within a few hours drive, bids in the $250 to $295 range with two day turn times are common practice. Funny story, I took over a loan after a lender failed to deliver and the following is fact (No fee disclosure law in CA). The borrower was charged $700 for the appraisal, while the actual appraiser was paid $250 (bid out). The appraisal did no go through an AMC but rather was bid out through the Mercury Network. Meaning, the new lender went after the old lender in support of the borrower to collect the balance of $450 (they kept the spread). In short, the borrower paid out an additional $250 ($700 in total to me) for my work while the new lender was able to collect the $450 original lender spread. Of note, the product type was a 1004C, the ownership was condominium, and there was an age restriction of 55+.
Not in my world Kevin, but the truth is San Diego CA bids in the $200’s are common practice (AMC’s + Mercury Network, etc.).”
Seek the truth.
You guys/gals in San Diego are working for the fees that were prevalent back when I started in 10/96.
Yes jaydee, based on high prices for everything, and very low wages, San Diego is the least affordable city in the United States. Per 2020, the median individual income was only $38,503. The average apartment rent is $2,989 per month with the average size being 875 sf.
As of January 2022, the median home price in San Diego is $764,000, which brought San Diego’s “unaffordability score” to 8.1, according to the study. A new study by OJO Labs found that San Diego has surpassed San Francisco & Los Angeles as the least affordable city in the United States. Feb 18, 2022.
Seek the truth.
That’s because of excess subsidy and welfare programs. Like it or not, everyone on CA receives either direct or indirect subsidy. Your tax dollars, hard at work. There is no such thing as a free lunch. Expect that figure to tick up substantially with the upcoming ‘reparations programs’, which of course, will have a direct effect on housing pricing, leading to an even less affordable state.
Thanks Dave!
They pay up to $120. Probably pay $30 for most of them. Only good part about the inspection is no liability (unless just having a license adds liability to it).
However, if the “client” or anyone associated in these non-professional transactions KNOW you’re an appraiser, one guess who they will be coming after.
If you sign it, while acting as an appraiser, it’s an appraisal product. All liability and uspap general expectations apply. If you have to provide eo insurance at any point in the process, that’s how you know for absolutely sure. Appraisers often complete these innovative products without bothering to ask if their eo insurance even covers such engagements.
100% agree. Mr. WIlson needs his eyes opened.
Im talking about the ‘inspection’ side and not signing your name. Obvious signing your name as an appraiser is a bad idea.
Then why doesn’t the company requesting such routine inspection service contact any number of the 1099 vendor networks or actual licensed home inspectors already fulfilling those roles? I’m just leery of any company that would be so bold as to contact a licensed appraiser for such a limited service action. I’d presume this was acting as an appraiser, if the company contacted you by way of some appraiser service network, an appraisal services website or advertisement. Otherwise how does that work come to you unless you have an official separate business identity? And then why would you be being engaged by companies whom appear to only work with appraisers with that non appraiser business? Perhaps the prudent approach is to assume you’re acting as an appraiser.
Seems like just yesterday the industry was roiled over the very concept of evaluations, if appraisers could complete bpo’s or not. Now we’re talking about subbing out at a lower rate for non licensed work, backing it with an industry an wide quite short list of insurers whom offer an umbrella policy coverage to the entire appraisal services industry.
Appraiser insurers should have separate polices for this kind of work. Otherwise one assumes that the appraiser whom is not acting as an appraiser, has obtained the complete set of separate regular home inspector and liability policies to fulfill that non appraisal related work. Don’t forget to check the insurance box on your renewal which asks you if all your working income came from full time appraisal services or not. It just seems more sensible to instead advocate for full service appraisal requests, and accept no substitutes.
If an appraiser is ONLY doing a Property Condition Report, with no valuation statement, then that product is NOT an appraisal.
Sure. And the appraisers errors and omissions coverage would not provide business insurance for that non appraisal related business activity.
When people get litigious and seek someone to blame, whom is insured, watch how fast this will be defined as appraisal practice. Otherwise why was the request sent to appraisers?
How is it that fair market value for a 1004D (perhaps a single picture of a paint repair) is in the range of $125 to $150 for most, where as a property inspection only pays 120? If you want to do hybrid appraisal in San Diego County, I’ve been told Stewart (formerly Proteck) pays $55.
Seek the truth.
Appraisers are their own worst enemy; when business starts to slow down everyone panics and offers to do appraisal for less money from the AMC’s who charge the borrower the same amount. The borrower has no idea what is going on, the realtor just wants a deal to close, the lender has to close a loan in order to make any money. Here in NY it’s now mandatory to include an Invoice in the report (AMC’s hate this) so the borrower can see what the appraiser is actually paid as compensation and what the AMC receives. I had a borrower recently ask me why the AMC for his loan received almost as much as I did; of course I told him we aren’t allowed to discuss fees. He asked why couldn’t he have paid me direct like in the “old days” as he was an older gentleman and remembered the process from years gone by. Here is my honest opinion of only 18 years as an appraiser; the AI is a joke, USPAP is a joke as no one but appraisers have to follow it, Fannie/Freddie want us GONE, realtors want us GONE, FHA/HUD wants us GONE…whos will step up and be our advocate? Local politicians? No way. State politicians? No way.
USPAP doesn’t say we can’t discuss fees, only the AMC. Screw the AMC. When asked I don’t mention dollar amounts but I do say I get about half of what you paid. The other half is split between the bank and the AMC. Sometimes I go deeper into the history of why the fee has become so high for the borrower. 2007 Fallout, Frank/Dodd, Cuomo…..
Yes, we sometimes are our own worst enemies. But this slowdown is different. Over the past year we’ve seen the implementation of these Hybrid Appraisals go into full motion. As I stated in an earlier post these hybrids have taken over the equity work, most of conv refi’s and some conv purchases. I’m guessing these hybrid products have taken over around 50-60% of work that was there before an it is not coming back. So we are now we are all fighting for the other 40% of what’s left. And with this administration looking for a solution to the appraisal bias thing, the expansion of third party inspections is going to get worse. VA probably won’t cave to this but there is a good chance FHA will. And if FHA does, that piece of the pie we are fighting over just got smaller.
Throw in today’s Fed read on inflation and mortgage rates already at 7% we appraiser’s should panic. For those not wanting to do $60 desktops It is very near the end of fulltime appraising. It will be a second job for those that can get private work, REO work and maybe mortgage work here & there. I hope I’m wrong but many of us will need to assess your future as an appraiser based on the ever decreasing size of the full fee pie.
You are perfectly correct
Oh yes, the full time working pie for 1099 appraisers has been cut again and again and again. With the demins effect, there is likely to be only a tenth of the full time lending work available compared to two decades prior. These appraisal modernization efforts are likely to cause another 40,000 appraisers to quit or retire in the next few years if not sooner. Equity! Thank you PAVE task force alongside the GSE’s. These are among the most efficient bodies of persons, capable of decimating tens of thousands of viable full time jobs and careers with the stroke of a pen. Talk about a lot of power concentrated in one place, amazing. Taking bets now on the average staying power of future PAREA graduates under these oppressive working conditions. My money is on 6 months or less. They will literally be able to earn twice as much sitting in a chair snoozing off as a door greeter. Maybe they’ll get bold and pick up a lawn mower for that 3x if not 4x pay scale. That PAREA class is going to be one mighty tough thing to sell, McKissock discounts and coupons incoming. Appraisal Modernization! What’s going to happen is every appraiser left standing is going to roll their kids spouses and grandparents into PAREA, the program will be eventually cancelled, and demographics will not change a bit. Think of it as a brief window in time where you will be able to pick up the trainee you actually want, without having to go through as many struggles to get there.
I agree with your assessment. and am thankful I saved during the low-interest bull market and covid-fueled good times. Blessed to have a wife with a government pension which allows this 62-year-old to enjoy being forced into 95% retirement until my current license expires. Wishing the best for all those who still need to make a living at appraising. It was mostly a good ride.
Don’t you love how the AMC’S and the GSE’S are destroying the appraisal profession all the while crying there aren’t enough appraisers? Him speak with “FORKED” tongue.
You made an excellent case for why I insist that $300, $400, and $500 appraisals qualify all appraisers for a lifetime membership in a mental institution of their choice.
Where does my current real world number of $600 and one or two a week put me?
Limping along with another empty house, but it’s nice. No scheduling, same agents, always direct assignment to me and me alone at an upfront pre stated fee, really pretty easy.
Dodging mountains of dog terds and bacterial infections on the side.
In the utopia dream these GSE central planners have, all these homes are well managed to the point third party inspectors can just whiz through with not much ado. In the real world they’ll eventually balk at the situational variables. Which is why appraisers traditionally were compensated more, for having broader ranges of skills as well as needing acceptable compensation in order to have time and resources to actually care about the people involved.
Two Words Every Fed Up Appraiser Should Know: “CAT Adjuster”. (No it’s not a chiropractor for felines)
Willing to travel and and have a few months of down time each year without risking losing clients?
Here is a quote worth reading from the website of AdjusterPro: “Independent adjusters, on the other hand, can make a lot more than $100,000 in a good year, especially handling catastrophe (aka CAT claims). For example, during the peak of the 2017 hurricane season, adjusters were making $65,000 to $100,000 in one month.”
Where does this soon-to-be-retired appraiser sign up?!
I have yet to sign up myself but I’m seriously considering it. AdjusterPro seems to be one of the best professional outfits that I’ve run across so far regarding training. Training and licensing appears to be 10,000 times easier than the appraisal certification process and you can actually take a great deal of time off between storms without ever having to worry about losing clients. I just read an article on CNN today that said hurricanes are maintaining their winds much more and predicted to start going further inland. You can train up in no time, and either work for an insurance company locally for a year or two to get your feet wet (no pun intended) or you can immediately become an independent CAT adjuster and seek out the companies that are willing to give newbys a chance. One thing is for sure; when one or two big ones hit insurance companies will be begging monkeys to go to work for them. If I were a young appraiser struggling to make a living appraising, this is the path I would choose. The income potential is incredible for those who are willing to travel, and climate change has transformed it into a more secure profession than undertaking. A guy starting in his 20s today could easily retire in this career, should he choose to, by his mid 40s. Best of all, your experience as an appraiser puts you far ahead of the average newby in the field.
Funny how I found your comments here, Retired Appraiser. This is precisely what I am planning to do. Good luck!
CNN nailed it last week when they said hurricanes are making their way further inland. Nearly all of Kentucky endured sustained 50 to 70 mph winds yesterday for 6+ hours. A near equivalent of a category 1 hurricane. A first for the bluegrass state. Damage EVERYWHERE. Good luck to you.
Well that is quite interesting. Click on resources. Oh, a webinar? That’s sort of silly, I’d probably want to track through courses and online learning materials, less the sales briefings. Says you can make it happen in a month or two with only a thousand or two in out of pocket expenses.
https://adjusterpro.com/independent-adjusting-firm-directory/
https://adjusterpro.com/become-cat-adjuster/
https://adjusterpro.com/how-to-become-an-insurance-adjuster-in-colorado/
An extremely affordable alternative for appraisers but it would be tough to pull off as an add on service without losing all of your appraisal clients. Certainly a better alternative for anyone who is considering entering the appraisal profession today.
It’s a vast majority of appraisers who are in this spiral. Even the ones who are good with getting C&R fees are struggling because with fewer loans, the lenders are doing whatever they can to cut costs. The appraisal fee is a variable.
Peanuts!!! Peanuts!!! Who wants this work? Peanuts!!! Peanuts!!! Who wants this work? What? You actually want a decent fee? DECLINED!!!! Peanuts!!! Get your AMC work here!!! What’s the fee? Peanuts!!! Get your Peanuts!!!!