An Open Letter to All Appraisal Management Companies from an Appraiser part. 2

Monday, June 18, 2012

Last Monday we ran the beginning of Dustin Harris's Open Letter to AMC's. We are excited to bring you the conclusion to this highly read and controversial letter. Be sure to read the beginning of Dustin's letter to AMCs from the June 11th edition of the Buzz by clicking HERE 

Some Suggestions to Reverse the Trend

Again, I am not an expert in the financial arena, but I am a capitalist, and I am a multiple business owner. I understand the laws of prosperity and they apply, I believe, equally to both small companies (like the fee appraiser) and medium to large structures (like some AMCs and lenders). So with that, allow me to make several suggestions on how we can work together to change the status quo. 

Stop Disqualifying Trainees

I am smart enough to know that this one is mostly not your fault. This directive is mainly coming from regulators, but I am starting with it as it is positioned to have the most immediate effect on the industry, and I am hoping you can be integral in pushing for reform. It has become the "in" thing lately to require that all appraisals be completed by a Certified Residential or General Appraiser only. Trainees may not inspect. Trainees may not work on, and trainees may certainly not sign an appraisal report. If a trainee so much as sneezes in the direction of an appraisal, there's gonna be trouble!

The fact is, both the Uniform Standards of Professional Appraisal Practice (USPAP) and Fannie/Freddie allow the use of trainees, and the Supervisor is still responsible for every dotted "i" and every crossed "t" in that report. It is in the best interest of the appraiser to make sure the quality of that report is as high as if they had done it themselves. In other words, the ultimate liability for that report still hangs on the shoulders of the supervisor.

Appraisers are overworked. As a consequence, they are making mistakes, cutting corners, and some may even be using trainees (and not reporting such), anyway. I mention that not to tattle-tale on my fellow classmates, but to help us all realize that the regulation is not having the effect it was intended to. As mentioned previously, we are losing appraisers at an alarming rate, and we cannot replace them. Appraisers want to hire other appraisers. We need trainees to help us take on these extra requirements. Ridding ourselves of this ridiculous disqualification will only allow more appraisers back into the field and give you more choice and higher quality appraisers going into the future.

Again, I realize this is not coming directly from the AMCs (with a few possible exceptions). These requirements are coming from higher up the chain, but maybe we can work together in encouraging those decision-makers to ease up a bit on the whole 'Trainees are Taboo' thing. 

Educate Your Staff

Recently, I was asked by an AMC employee to go back out to a house and retake the photo of the attic. "This one has rafters obstructing the view," she said. Maybe this is an extreme example of stupidity (and you can be rest assured that it did not come from your company), but it is one example in a sea of ridiculousness.

The fact is, some staff members who work in AMC offices are not trained properly. Most of them have never been appraisers and just do not know what they are doing. Consequently, we appraisers get bombarded with requests that are just dumbfounding in their scope. Once more, I realize that some of these requests are simply passed on to the appraiser from your clients, but that is the problem; they are passed on. Shouldn't it be the responsibility of the middle man to turn back to the lender once in a while and say, "Ah yeah, I am pretty sure pictures of attics are supposed to have rafters in them," rather than just shuffling the question on to the appraiser? Taking the time to properly train your employees would go a long way in alleviating some of our frustration. 

Pay Appraisers More

This sounds like an overly simplistic 'solution' (and likely to come from an appraiser), but allow me to explain. In order for an economic relationship to last, both parties must benefit from the transactions. Ask too high a price for a good or service, and the buyer employs the law of substitution to go elsewhere. Conversely, ask too low a price, and the good or service quickly runs out. There must be a balance.

Let's apply this principle to our relationship (between appraiser and AMC). Our current business climate compels most appraisers to work with AMCs. In return, AMCs must work with appraisers in order to stay in business. You need us, and we need you. Both of us must make a profit in order that we continue working with one another. You, of course, are not the only kid on the block. Just as I can choose to go to a different grocery store for my milk, the law of substitution says an appraiser has many AMCs to choose to work with (or none at all if they choose other forms of appraisal work). Just as the grocery store must price that gallon of milk high enough to profit yet low enough to retain customers, an AMC needs to pay appraisers low enough to still retain a profit, but high enough so they do not leave and go to the competition. It is in your best interest to pay appraisers enough that they can continue to work with you. Appraisers talk to one another (this is especially true in the growing social media world), and you can bet they are asking each other, "So, which AMCs do you contract with that pay well and are good to work with?"

Furthermore (and more importantly), paying a fee that is higher than your competition (assuming that you can still profit) allows you the ability to be more selective in your appraiser vendors. Attracting a larger pool of appraiser applicants puts you in a position to be more picky about only working with the top appraisers. This, of course, reduces your workload (less corrections/revisions) and increases your standing with your clients (the lenders). 

Limit Your Requirements to... well... Requirements

Most AMCs do not do work with just one lender. They typically have several clients. Because every lender is different, there are many requirements which an AMC must juggle. Maybe ABC Bank wants pictures of all four sides of the house, while XYZ Loans wants a picture of the street going in both directions. What many AMCs do, instead of separating which requirements go with ABC Bank and which with XYZ Loans, is group them all together. So, if you do work for AMCs R Us, you take pictures of all four sides of the house and the street in both directions regardless of who the ultimate client is. I call this practice 'Scope Creep Dog-pile' and it is actually worse in reality than I have made it sound. It is more than just taking a few extra pictures. Rather, it goes to the heart of every part of the appraisal service. Put a few requirements from this company, a few more from this one, and several more from that one, and pretty soon you have an engagement letter that takes 30 minutes to read.

Are you telling me that, with the technology we have today, you cannot separate out what is required by each lender and just send us the stipulations for that particular request? Furthermore, do AMCs ever question the lender about the requests that come across? I know of one AMC who requires, not only a picture of all four sides of the house, but they want me to also stand at each side of the house (North, East, South, and West) and take a picture looking away from the house as well. Really? 

Trust us

When we say there are three bedrooms, do you really need a picture of each one? If I tell you I did a head-and-shoulders inspection of the attic and crawlspace, do you need a picture of the spiders I encountered before you trust that I actually went in there?

I understand that these requests often come from being burned in the past, but trust is a big deal. To not be trusted is demeaning, and appraisers are tired of being treated like a middle-schooler wanting a hall-pass to use the restroom. Want loyal appraiser partners to work with? Treat us like the professionals we are.

Conclusion

As mentioned, most of my work is done for AMCs. There are still some great ones out there. I know because I refuse to work for those who do not treat me well, and I am still doing good business. Thank you. Thank you for putting food on my children's table and helping me to pay my bills each month. I sincerely appreciate the business relationship that we share.

So, why am I writing to you instead of directly to the big banks, lenders, regulators and politicians? Again, I realize that many of these issues are not caused by you. The answer is simply this; appraisers are not very well connected. Oh there are a few organizations out there, but nothing like a powerful lobby that can really make things happen. You and I have a connection that appraisers no longer share with most lenders directly. Furthermore, you have leverage with the banks (after all, they are your clients) which is more than we have.

Of course, I understand my audience. Though this is an open-letter to AMCs, I realize there is no such living thing as a "company." Indeed, I am writing to human beings who live, breathe, and work within the Appraisal Management Companies. It is my hope that someone(s) within your structure will read, understand and do something about the current crises we find ourselves in. It is my hope that you then bring these problems/suggestions to the attention of the person or persons who can make the decisions which will cause change. Remember, it is in your best interest to do so. It is in all of our best interests to see these changes take place.

Thank you for listening.

With Sincere Regards,

Dustin Harris
The Appraiser Coach

Comments

I think it's crazy for a fellow appraiser to push for easing of requirements to complete appraisals. I compare it to a RN saying to ease the requirements for Medical Assistants to do the work of RNs in a Hospital. After all of the education and time I have invested this guy wants a Certified Appraiser to allow trainees to do our work which is ludicrous. Its like a Lawyers allowing legal assistants to appear in court and get paid their salary. I am a certified appraiser an not over worked but I like to be able to pick and choose which appraisals to do based on reasonable fees. There are thousands of appraisers in Georgia pay a reasonable fee and the assignment will be completed.

 How in the world is the appraisal profession supposed to continue if trainees can not work on appraisals?  In order to become certified, you must have trainee experience.  If you are not allowed to work on appraisals, as a trainee, you get no trainee experience.....thus no additional appraisers can enter the market.  30 years from now, there will only be all of us "old farts" left appraising and no newly certified appraisers.  30 years from now, I may want to retire and sell my business  to a younger appraiser.....that got certified by being  able to assist with appraisals during their  "experience" phase of learning.  I understand that you may want an appraiser monopoly for your business....but trainees are a viable to this profession.  Even the RN and an attorney had to get experience through non-licensed training.  As with any profession, this is all  part of "paying" your dues for the profession

One of the problems I find with having a Trainee do the work is that there are a lot of bad appraisers out there doing the training. In my state there is no requirement of the Trainer except that he/she be a Certified Appraiser. No classes to qualify the appraiser- no test. In order to teach USPAP, the teacher has to have special creditials- why should it be any less for the Certified Appraiser who wants to have a Trainee or two?After a bad experience with one of my Trainees I will never mentor another one. Too much responsibility and liability. And really, why would one want to become an appraiser anyway. With the fees that are being paid by the AMC's, I figure I am making about $25 per hour after all my expenses are taken out. Some days I make less if it is a difficult assignment and then you have to factor in the call backs from the AMC's (like the one mentioned about the attic picture) and it is even less per hour.I would advise no one to go into this business. Then eventually, they'll get what they want- AVM's doing the work of the appraiser. That's where it's headed in my opinion.  

First, let's not forget that the AMC's are here becasue of our dear friend, Andrew Cuomo. And, he was a director in an AMC when he passed the regulation. And he is a lawyer by trade. Two words that cannot be in the same sentence are good and lawyer. Enough said there. I hate the AMC's, in part because their people are not educated, and they have no clue what an appraiser does or how long it takes to do it. And, they think that all appraisers can work for the same fee. Well, what if we told them that all their employees got paid the same, whether it was their first day, or they were the owner or manager. How loud would that crying be. They don't get it and never will because there are appraisers who can't get any other work. The bottom line is they will do what they set out to do when they passed certification, and that is to eliminate appraisers. We get in the way of the banks completing their deals faster. What the AMC's don't get is that when we go, they go. I also trained an appraiser who I then fould lying on an appraisal and fired. $ 25,000 later a judge decied that too much time had passed, and my contract was no good. And he took three of my good clients to the tune of $ 90,000 a year in fees. So, I'm bitter, and the appraisal powers to be do not recognize the work involved in getting a trainee to licensure. So there will be less and less of us, and that's OK, becasue they don 't care about us anyway. The smart ones have started businesses like Appraisal Buzz, teaching, or gone to the dark side. It was a great job/business, but has been ruined by both appraisal and bank regulations.  I hope I can hold on for two more years, and make enough to pay my health insurance. Now there's an industry that needs cleaning up. 

There is a root problem. Lets say you have a 4 year degree from IU in real estate and a minor in finance. You were a real estate broker for 15 years and took your education from the Appraisal Instute. The local appraiser will not hire you and if he did the pay would be inadequate. Any way he hired his nephew with a GED.

Who in their right mind wants to take a trainee on in this day and age??? The liability alone is staggering!  Then you invest all this time and money in training someone just so they can get certified and stab you in the back.  They will sign on with all your clients and then reduce thier fee just enough to beat you out fee wise. Trainees are a thing of the past and appraisers will become extinct.  This is exactly what the lenders want.  We have always been a thorn in their side....an extra step they deem not useful.  They all would love to be able to use AVMs and with all the data mining going on the AVMs are becoming more accurate.  The problem is....when we  are all gone...where are they going to strip the data from????? 

I originally worked for a local appraisal company and started as a Trainee and have been Certified for 15 years.During the time I worked for them, they started an AMC, and eventually sold to a "national" company. But, during that time, it was enlightening to see how some of the "scope creep" occured.  It's not all the lenders requiring additional scope....In reality, many of the additional requirements came about as a result of competition.That's competition between AMC's.  In other words, if their proposals to the banks were close, they would say..."we require "X" documentation from the appraiser to assure "X", giving you the lender a greater confidence level in our product.The lender agrees that requirement "X" is a good idea, and that extra level of confidence should be included in all of the reports they receive.  So, they send the "new" requirement to all of the AMC's they use. Now there are 3 AMC's that require "X" in their reports.Move down the road 3 years...the same lender is now shopping AMC's, as their contract with the first three AMC's is up for renewal. They send out their request for quotes, including...you guessed it... requirement "X".  Now you have additional AMC's who will be required to include the additional documentation...and so on...and so on...and so on.That's at least part of the reality of scope creep... some if it from the lenders, some from the AMC's, some from regulators who have no idea what the appraisal process is all about.My personal favorite is a address verification photo of the house number on an "interior" inspection report.  Do you think someone is going to let you into their home to do an inspection and take photos of their kitchen and bathrooms if you have the wrong house?   WHO THOUGHT THIS ONE UP? 

One immediate challenge with AMCs allowing trainees is that doing so opens them to yet another narrative.  The Narrative:

  • AMCs pay a fraction of the going rate and are driving experienced appraisers out of the business;
  • So only inexperienced appraisers who are desparate for work will accept their low fees; 
  • And they travel 100 miles to do an appraisal; and
  • NEW NARRATIVE And they use trainees! 

One of the unintended consequences of bashing AMCs in media is that it requires bashing appraisers who accept AMC work. Adding trainees to the roster will encourage even more AMC bashing, not only for using unqualified appraisers, but newly minted ones too. Many AMCs have a minimum 3-years experience requirement, in part, to counter the narrative. 

  • Jeff Schurman, concerned citizen and co-author, The AMC Full-Fee Hypothesis

Attorney's do not need experience before being licensed.  They simply have to pass the bar.  Probably explains alot about that profession.As for the rest of this article, I file it under Pie in the Sky.Banks do not want to require appraiser's.  They are trying to drive us out of the profession so they can go to the regulators and say, "listen we want to have an appraisal done, but there just are not any appraiser's in the area so can we just get a $50 BPO instead.  Plus the consumer will have to pay less for the BPO and we can get it faster so the consumer can close their loan faster."  And the regulators will look at the AQB website and see there are only 4 appraiser's left in Utah or wherever, shrug their shoulders and sign off on it.When I worked at FNMA my boss, who is HIGH UP now flat out told me Appraisers won't exist in 5 years.  That was in 2009.  He was/is a certified appraiser and doesn't have animosity against the profession, but watching from on-high like that gives an excellent perspective.  I think the 5 year number was a bit short, I think if he said 10 he'd been right, as I think it will take just a bit longer than 2014 for us to all be phased out, but by 2019 there will not be a Residential Real Estate Appraiser profession like today.  Sure there will be some insurance industry folks, but nothing like what we are today.It's a dying profession.  And based upon the conference call with 80+ of my peers that I was on last week we probably deserve it.

I was told the same thing in 1990. I'll argue that there may not be as many appraisals ordered and even agree that it "won't be the same", but there will always be a need for appraisals. Real estate is too diverse and too complex to just let a computer vomit up some data and generate a value. I don't care how good the computers get, or the people that create the programs that run on them. I just received an order to appraise a home that is in a development with a small airport. Stick that in your computer and see how it goes.

How did you become an appraiser? Were you never a "trainee"?

While I understand the premise of why you are opposed to trainees, your comparison to RNs and Lawyers is flawed. First of all, after a specified college degree, they are eligible to sit for exams (ie.Bar, boards, CPA, etc). Appraisers now have to have a degree and then must find someone to tag along with for 2 years before exams. Those other professions are typically in larger companies or corporate environments where they have resources to pay entry level people. If an appraisal firm needs/wants to grow, they seldom have capital to fund someones training only to have them go off on their own after they are licensed.

RNs and Lawyers make more money and get more respect.

Amen...... to paragragh on employees at AMCs. There needs to be consequences to those reading our reports, deciding how much revision is required. Most of their employees have no clue. It's like "you get fired if you let one go through".  How can you make a decision about an appraisal report without "being an appraiser" (See USPAP). I thought I heard  them all, until you came up with " I need another photo of the attic....the rafters are obstructing the view".

I agree, the attic is supposed to have rafters. I get e mails from AMC's all the time between midnight and 6 am for "revisions". I guess with the UAD and XML, the computers are doing their work for them. I don't take orders from computers and if they want something ridiculous I just wait for them to call me. 

Part of the amc's problems is that they do not work with the same appraiser's all the time. I like most appraisers get calls from amc requesting our fee and turn time. They the amc's are shopping for the lowest fee. As from past comments, the amc's complain about the poor appraisals they receive. This is what you get when you shop for low fees. They think that all appraisers are equal because they have a license. LOL.I currently only work with 1 amc and this is when I don't have anything else to do. I only take the very simple appraisals because the difficult one always have problems going through amc underwriters. Not all subject properties meet all the required guildlines, some people just don't get this. And I have found that it is much easier to pass on these properties than to do them. They require to much time and the fee is not worth the troble. I fill very lucky that I still have a few lenders that I can work direct with. I have even gotten back a few who have used amc's and have told me the appraisals are very bad. They send the small appraisals thru the amc, and contact appraiser direct with the large and difficult properties.Bottom line is if all appraiser's would just say no to amc's we would all be better off.

Since I'm a single appraiser, with no office help, trainees do not play into it for me.  Here's the bottom line.  It takes, at least, twice as long to complete an appraisal as it did in the 90s and we're getting paid the same, if not less, for twice the work.  With only so many hours in the day, that basically means I'm making about half of what I was bringing home in the 90s.  That is a problem.   And I know what the UAD is.  To the AMC writers, if you call somebody and they really say (which I find hard to believe) that they don't know what the UAD is, hang up the phone and take them off your list.   Its that simple.  I've been doing appraisal for one AMC from Pittsburg (there are quite a few) for 20 years.  One month they will send me six appraisals.  The next month zero.  Maybe there's a good reason for that, but I don't know what it is.  There is NO communication.  They've come up with tier ratings, which are ridiculous.  I have no problem being graded but lets be reasonable about this.  There should be some expectation of having to COMMUNICATE with the appraiser.  You can downgrade an appraiser based on the fact that you had a question about the report.  SHHEEEESH!!!  Isn't that waht this is all about????  These properties are not one size fits all and we go through the drive in and order what we need and pull up to the window and here's your report.  It doesn't work that way!!!  Well, I'm worked up.  And I don't know what the answer is.  I guess its finding a company to work for so you can be a review appraiser and get paid without having to deal with this up front.  Or just get out completely.  And there are plenty thinking the later who have been in the industry as long as me (28 years) and that is a sad, sad commentary of what this business has become.

My 2 Cents is totally right. Where else do you have a so called profession where someone else drives down your fees, makes you pay for all the overhead and insurance, carry all the liabilty and then often makes you effectively loan them money for 3-6 months without interest to get paid ( most of the time)?This work no longer makes any sense. The only reason appraisers are still in business is because they are too old to do anything else at this point. A yound person would be insane to invest in this line of work.I had a reveiwer complain last week because I only had one comp and one listing with a higher value than I applied. I ddn't realize we had to come in at or below the second lowest comp value.  Another request wqas to "assist"  in a valuation by taking all the photos and pickingthe comps for $45!!!. Of course you have to attach license and E&O.  No respect.  

AMC and trainee are not the major issues. The laws and the lenders are the problems. Modify the regulation will renew the profession. The target should be lobbying to the top.

I see no way out of this. I was excited when the Customary and Reasonable law went into effect, and yet very few AMC's actually pay it. My sister works for FNMA, and she tells me they could care less if you have photos of all the bedrooms. Most of the scope creep is just to make clients feel better, but it does not make FNMA happier. FNMA is interested in whether we used the best comps available. That is it. Instead we got AMC's telling us that we cannot use any REO sales, No sales over .5 miles, No sales over 3 months, No sales outside the subject subdivision, All sales within 25% size difference, No 2 sotry comps for a 1 story home, 20 photos, Attic photos, Across the street photos, Explain if the property is closer than 1 mile from a freeway, etc.Appraisers used to have power over the lenders. If a lender started making these types of rediculous requests, we fired them. Now we have no power. We cannot fire a lender. Instead we have to fire an AMC that is too weak to tell a lender that their guidelines are rediculous. 

Agreed

Y'all are given the AMCs too much credit. They are the puppets of the banks who put us in this situation. They only make $50-$75 a pop on these things. If you think these guys are crooks, I can assure you, they are eating ramen noodles like the rest of us!

Someone else mentioned the problem with trainee's is that no one is training them!  That is 100% true! I have a practice of taking new appraisers (CERTIFIED ONES) who work for me on five inspections to make sure they know what to look for and what they need to report.  I have had probably 8-10 appraisers work for me over the past decade.  Only *1* had ever had someone go with them on an inspection or actually give them any training at all.  Every other one said flat out no one had ever taken them on an inspection.  The majority said at most they were told to type a report, then giving criticism of what they typed as "their training."  Seriously?  I wish I was joking. This all said this is just one more part of the "phase out" of the appraiser profession that is on-going... 

1). AMC's serve no purpose post HVCC (Actually if you read the HVCC, you didn't need one then either). 2). I have been threatened about my job security for over 2 decades.....Real Estate appraisers will ALWAYS be required in residential banking. 3). Trainees serve a purpose and are absolutely needed in the process. I don't care about the bad appraisers training bad appraisers. The work should stand by itself!!! Just regulate the damn product and get rid of the bad ones....very simple process. Fraud is EASY to detect. 4). Instate a peer review committee in each state (like a jury system) to hear all appraiser complaints. As a certified appraiser you have to donate a day every 4 years!?! No cost to State regulators and problem solved. 5). Scope creep is killing us and is one of our biggest enemies! We, in the residential world, are paid for SUMMARY reports and not NARRATIVE reports. You should always get what you pay for!!! 

Your points are well stated and I agree with each of them.  Your point 4, IE "...peer review committee...". Most states have one called a Real Estate Appraiser Board (or something equal).  Most have become political appointments and couldn't care less about weeding out unqualified or dishonest people who call themselves appraisers.  Or they are members of organizations that think it would sully the name and reputation of that organization to reprimand or revoke the license of another member.  To have an appraiser peer review committee that will work it would have to be completely anonymous. I've done a great deal of appraisal review work in the past and will continue to do it if asked.  If I do a review, I get paid for it and my fee is equal to or greater than the fee I charge for an appraisal -- it's harder work.  And, I will still send a report to the board if I feel there is sufficient cause to believe fraud has been committed and can be proved -- you can suspect it but it's another thing to prove it. --but I digress.I work almost exclusively with AMC's.  Some I have refused to continue working with because they don't treat me like a professional.  The ones I continue to work with, not for, do treat me like a professional and actually agree with the stupidity of some of the requests from lenders.   They can and should be demanding of QUALITY.  If they won't pay my fee I simply turn down the assignment.  They continue to order appraisals from me. 

On the trainee idea, it is true, it is difficult for trainees to get inserted into the profession. so that is any issue, but the other issue if trainees are heavily used, is that appraisal firms will hire HUNDREDS of trainees as a money making approach to capture MORE lender work. appraisal quality will become a bigger issue. this is what happened just prior to licensing, in the early 90s. do we really want to go back to those days.  bottomline is the lender mentality(and now the amc's) is they want FAST AND CHEAP appraisal service.  all the scope creep, tons of requirements etc, etc is just a smoke screen to appear as if they want QUALITY appraisals, when they really just want "fast and cheap" appraisal. USPAP has absolutely nothing to do with most of the lender/amc appraisal demands.

The "core" problem is the appraisal industry.   It is reactive instead of being proactive.  The national leadership of the entire appraisal industry awaits for banks, politicians, etc to tell them how they should conduct the business of the appraisal of real estate.If the appraisal industry stood up, and said no, we are not going to have these absurd restraints placed on us,  if we viewed and conducted ourselves as true professionals, them the appraisal industry would be healthy and respected. 

"Leadership of the national appraisal industry?" What leadership are you referring to?  I have yet to see any leadership in this industry on a national basis.  I see a thousand chiefs with 4-5 members in their group complaining about fees but doing NOTHING about it.It's a useless profession friends.  Appraisers could not fight their way out of a wet paper bag with holes at each end.

The problem with trainees everone overlooks is that by their very nature (they require supervision, a key point, since they are not fully licensed) they can only be an employee, NOT AN INDEPENDENT CONTRACTOR! This is per state and FEDERAL laws.You must pay mininum wage per hour (required) then add all the other costs (direct and indirect) you end up paying someone $15.00/hour and loosing your productivity. Trainees will not happen until: (1) there is a shortage (2) fees increase substantially. Item (2) probably will not happen (BPOs, AVMs, etc.). If there is a shortage the banks will change the rules, remember the largest demand for appraisers is because the Feds. require an appraisal.As a designated appraiser, college graduate, and a broker I have options. I do work other than lender work also.I am for the higher requirements! Originally licensing did not even require a high school diploma. We have to many brain damaged-evil-flying form filing monkeys in the business. There will always be a need for appraisers (it most likely will be reduced), just not a need for the poorly trained, uneducated, stupid individuals who got into this profession because they saw a way to make a lot of money fast without knowing anything. Now these "appraisers" are complaining their business is going no where. 

I've been in the business for over 30 years as an appraiser and most recently as an appraiser working for an AMC. Reporting requirements passed along to the appriaser for the most part are client imposed. It is the lender that requires Certified Appraisers, not the  AMC. We are looking for quality appraisers and not just a level of certification.  It is the lender that requires the extra photos, extra maps, etc.  Let's don't forget the ever-changing government regulations that have increased the workload for all of us, appraiser and AMC alike.  The AMC facilitates the orders for the client. We also serve as a buffer for the appraiser. By that I mean we review all revision requests that come in from our clients. We do not hesitate to decline a revision request if the information is already in the appraisal report, if the request is unclear or unreasonable.  On the QC review side it is unfortunate, but before we are able to deliver a report to a client we are sending back close to 85% to 90% of the appraisals to the appraiser for revision requests because of appraiser error. The number one reason is silly clerical errors, something proof-reading the report would solve.  Rarely do we send a report back for value related issues. Trust me when I say the less we have to go back and forth with an appraiser the happier we all are.  We see residential appraisals that may range from 25 to 50+ pages, and while I agree that the 'scope creep' has creeped way out of control, I rarely see the need for a 50+ page URAR. Keep comments on point and remember the URAR is a Summary Report, not a Self-Contained Report. It's a fact that AMCs are here to stay so let's stop the blame game and all work together. Last but not least, not all AMCs are made the same.  It's OK to refuse work from certain AMCs. I did when I was in the field and I survived. There are plenty of good organizations out there. Choose wisely.

I experienced an AMC calling me last week at 11:30 in the morning offering a large fee if I could deliver a residential report that day.    Naturally I turned them down. Two months ago, my neighbor had an AMC employed appraiser arrive to give an opinion of value for his house.   It turned out the "appraiser" was a trainee whose name did not even appear on the final report.   The SRA whose office he worked from signed the report, and told the lender he had personally done the inspection. About 2 weeks ago an AMC "processor" called to ask me to perform an appraisal.   He was a new employee charged with choosing the appropriate appraiser for the job.   I asked his previous employment.    He had been a clerk at a photo processing kiosk at the mall. So ... what am I seeing.    Quality means nothing to an AMC.   They are interested in turn time and fee.   Nothing else.     So ... why is quality only given lip service by AMCs?    Because their clients aren't interested in quality.    Turn time and fee.   Nothing else.   Oh, and they want someone to sue if things go wrong. My answer ...  After 30 years in this business, I have virtually abandoned loan origination.    Neither the AMC nor the lender want an appraisal.   The AMC wants a piece of paper that passes a series of arbitrary tests.   The lender wants a piece of paper saying they can do their deal.

When are appraisers going to learn to take Nancy Reagan's excellent advice and learn to just say NO.

They are saying no to helping themselves.They are saying no to boycotting AMCsThey are saying no thank you to higher fees.They are saying no to AMCs when asked if they mind doing twice the work.They are saying no to AMCs when asked if short turn times bother them.They are saying no to AMCs when asked if they mind waiting 3 to 6 months to get paid.They are saying no to AMCs when asked if providing 9 comps bothers them.The number one problem with the appraisal profession IS that appraisers are saying no.

Thanks for the great article. To the appraiser community -From the bottom of my heart, I mean this:  Appraisers have earned the AMC trouble.  Like a herd of sheep, you lined up to hand over your livelihood to these guys.  You gave up control of your fees, your turn-around times, even your dignity to appease people who know little about what you do.  Some years ago, after my first experience with an AMC, I swore never to work for one again. And I'm better off for that pledge.  Why did you roll over for "customary" fees?  In any other industry, that would be price fixing, and absolutely illegal.  Amazingly, nobody in our industry or the AMCs could figure out that appraisals could be put out to bid, just like almost everything else.  Do you have an approved client list?  If I'm mistreated by a client, I let them know about it, and they have a hard time ordering a new appraisal from me.  Do you get automated reminders about the due date of an appraisal?  I just got one from a new client.  The appraisal's not due for a month.  I didn't respond to it.  In short, I insist on being treated as a professional.  Our profession really needs a shot of self esteem.  Thanks,  Doyle P. Dean, MAI 

Having a great laugh with some of these comments. How true it all is! I have been appraising for 20 years and I say Respect and Trust us please. Sure there are BAD APPRAISERS but that is because the AMC's who want fast and cheap get what they pay for!

Lenders And AMC's treat us like we are grade schoolers as someone here noted. You sit in on these Lender or AMC telephone seminars every so often and it is demeaning to have them talk to you like a child. A large well known bank just had a seminar where they wanted to go over their 18 page engagement letter which they remind us is a legal and binding contract! Their letter of engagement is a step by step guide on every little thing they want in the report. Please! Totally agree they have taken all their investors requirements and put them all in the letter. Same as AMC's do.

Each lender has laundry list of requirements so I say we give them 20 pages of commentary which they have to read before they even think about asking us for MORE commentary. Kill them with minutia!

I say ONLY appraisers should review appraiser work. Otherwise don't tell me what you think should be included in my report off a checklist you get from some sort of manual you have on how to review an appraisal.

I have reviewers and underwriters asking for things already noted in report. So I know they are not reading the reports.

A fellow appraiser made me laugh. Lender wants photos labelled. So she tells them the photo with the stove is the kitchen. The photo with the toilet is the bathroom. I love it!

It is crazy out there. But I do agree banks will always need appraisers. I am blessed that 90% of my work comes from lenders and personal referral work and not AMC's.

Hang in there to all of us over 50's appraisers. Retirement is in sight!

Low Fee Appraiser Mindset: I always wanted my own business. Business Owner... has a nice ring to it. Sometimes I feel like an employee of the AMC with all the pestering and constant calls but I am really my own boss, plus I do not have the typical trappings of the an employee..... I can’t be fired. I know I am not capable of knowing what to wear to an appt or how to behave once I arrive and I need to be instructed on what to and not to say because my small brain sometimes overrides my big mouth. The AMCs know this about me because after all I am dumb enough to get licensed or certified, accept all the risk and still only be paid a fraction of what is known to be a typical fee (they call it reasonable and customary whatever that means). I don’t really care if what I am doing kills my profession as from what I heard appraisers will be extinct in a few short years anyway. I realize (I think) that the UAD forms are simply to data mine but that is of little matter to me because I am getting paid much better than when I worked at McDonalds while trying to get my GED. I am thankful I made it under the radar when the licensing changes required college. Whew! I dodged a bullet there. I truly cannot understand what all the fuss is about; $175 is good money especially in this economy. Gotta go, my phone is ringing! 

Anyone that accepts a fee of $175 to do an appraisal is only perpetuating the problem. If you truly cannot understand the fuss, it is likely that there are many other things you don't understand so trying to educate you on supply and demand as it relates to fees is silly. I just wonder if you understand supply and demand as it relates to real estate. 

 This type of garbage does nothing to help the discussion. One replier (above) actually thought that this post was by a serious commentator! All of us care about preserving the appraisal profession. Please don't waste our time w/ this type of fluff.  

If I were a small lender, I would want a solid, accurate appraisal with which to base my lending decision.  I would consider the fee for the appraisal as nomintal compared to the loan amount.If I were a large lender, I would want a quick, cheap appraisal so I could get the deal done so I could get my stock price up so I could get my bonus, because I don't really care in the end what happens because all I care about is the here and now.  These are the people we are dealing with.The appraisal profession is on its way out.  I have been an appraiser for 15 years, but only do about 1 appraisal a month just to keep my feet wet at this point.  I have moved on.  You can't plan long-term in this profession anymore.  Who wants to have the stress of this profession and never know what the future holds.  I am just dissappointed that I invested so much energy into something that ended up not having staying power.  I hope everyone out there is seeking other options...

I was very impressed reading the articles you put together for Appraisal Buzz.  Would have really enjoyed knowing exactly what AMC's this letter was sent to and at which executive level you were engaged.  I hope that you share the respnses you receive from AMC's.It is very reassuring to know that there are other intelligent appraisers out there who still have hope and concern for the future of our role within the industry. Thanks again.