Posted on: 01st Apr, 2011 04:47 pm
Being an appraiser must be the easiest job done by the laziest people. What other job can you call your boss and tell them the job they gave you to do is “complex†and you need more money. You would be on the unemployment line. Not an appraiser, they can call a management company and claim an order is complex and ask for $50 more dollars. They will claim they have to drive over 3 miles for comps, or it’s a waterfront home, or it’s a 5000 sq foot home. I wish I could call my boss and tell them I need $50 more because the work they gave me is going to be tougher to do. Give me a break.
Don’t get me wrong. There are hardworking appraisers out there. Those are the smart appraisers. Instead of calling in on every “complex†order they do their jobs and get the work done. These appraisers are the ones that make it through the slow times and are making a living in this business. Maybe the lazy appraisers should take some notes off these appraisers.
Now let’s get down to the meat and potatoes of the whole business. Money. When appraisers say “you get what you pay for†and “the management companies don’t want to pay $350 for a quality appraiser….like meâ€. Really?? How do you know you are a quality appraiser? Because you charge more makes you a quality appraiser? Give me a break .An appraiser who does a report for $200 and it gets sent to the client and it’s a horrible report; don’t you think the management company is going to hear about it and take action?? Of course they will.
This Frank Dodd’s act is a joke too. I don’t know how many appraisers I have talked to say, “I can’t wait until the management companies have to pay me my $350 for an appraisalâ€. Well what happens when the government decides that $250 for an appraisal is the “reasonable and customary†fee for the area? You keep your fee at $350 and see how much work you get. Oh wait, you probably will be swamped with work because you charge more, so that must mean you’re a better quality appraiser and everyone will want to use you.
For all those appraisers who are stuck on charging $350 or $400 for an appraisal you need to wake up. Those days are gone. This is a business. You have to do what you can to stay alive. There are no words you can argue with me to justify charging $350 for an appraisal. I know years ago when there was no MLS, no online data, no digital cameras, and the software didn’t practically write the appraisal by itself you could justify charging $350 for an appraisal. Doing 1 appraisal a day for $200 and not working weekends you will be pulling in $1000 a week, $5000 a month. There is no way that the expense of running an appraisal business is that high.
Let’s talk about the management companies for a while. Let me start with this; they are not going anywhere so deal with it. All you have to do to keep them off your back is update them. If you do, they will leave you alone. Simple as that.
Now, if any of this has struck a nerve with anyone in the appraisal community; good. It should. I know there will be responses to this, but not one thing I have said above is a lie. There is nothing above that you can deny. I hope you all read this and realize how ridiculous all your complaining actually sounds. Get with the times, this county was built on hard work, not complaining.
Don’t get me wrong. There are hardworking appraisers out there. Those are the smart appraisers. Instead of calling in on every “complex†order they do their jobs and get the work done. These appraisers are the ones that make it through the slow times and are making a living in this business. Maybe the lazy appraisers should take some notes off these appraisers.
Now let’s get down to the meat and potatoes of the whole business. Money. When appraisers say “you get what you pay for†and “the management companies don’t want to pay $350 for a quality appraiser….like meâ€. Really?? How do you know you are a quality appraiser? Because you charge more makes you a quality appraiser? Give me a break .An appraiser who does a report for $200 and it gets sent to the client and it’s a horrible report; don’t you think the management company is going to hear about it and take action?? Of course they will.
This Frank Dodd’s act is a joke too. I don’t know how many appraisers I have talked to say, “I can’t wait until the management companies have to pay me my $350 for an appraisalâ€. Well what happens when the government decides that $250 for an appraisal is the “reasonable and customary†fee for the area? You keep your fee at $350 and see how much work you get. Oh wait, you probably will be swamped with work because you charge more, so that must mean you’re a better quality appraiser and everyone will want to use you.
For all those appraisers who are stuck on charging $350 or $400 for an appraisal you need to wake up. Those days are gone. This is a business. You have to do what you can to stay alive. There are no words you can argue with me to justify charging $350 for an appraisal. I know years ago when there was no MLS, no online data, no digital cameras, and the software didn’t practically write the appraisal by itself you could justify charging $350 for an appraisal. Doing 1 appraisal a day for $200 and not working weekends you will be pulling in $1000 a week, $5000 a month. There is no way that the expense of running an appraisal business is that high.
Let’s talk about the management companies for a while. Let me start with this; they are not going anywhere so deal with it. All you have to do to keep them off your back is update them. If you do, they will leave you alone. Simple as that.
Now, if any of this has struck a nerve with anyone in the appraisal community; good. It should. I know there will be responses to this, but not one thing I have said above is a lie. There is nothing above that you can deny. I hope you all read this and realize how ridiculous all your complaining actually sounds. Get with the times, this county was built on hard work, not complaining.
Well Guest, if I didn't know any better, it sounds like you are the owner of an AMC. In fact, by not identifying yourself, makes you quite suspect. You make some interesting points which you have presented a challenge that there is nothing I can deny. Well, I will be happy to accept your challenge.
First of all, I resent the implication that appraising is easy or that appraisers are lazy. For those who believe that, probably never completed their first appraisal. I am not saying that all appraisers are equal, and there very well may be a few lazy appraisers in the world, just like I am sure that there are lazy people in whatever industry you are in as well. But if done properly, the amount of time to research, verify, and analyze data in addition to reasonably well reporting takes substantial time. Complex assignments take MORE time, thus justifying additional fees. Your comment about what other job can you ask your boss for more money on a complex assignment is a false analogy. First of all, if I am completing an appraisal for you, you are not my boss, you are my client. I am a business owner and I make the business decision to require more money on complex assignments or I can also make the business decision to charge less for a client that offers higher volume of appraisal orders. In the end, you the consumer can either pay my requested fee or find another appraiser. And believe me, I have fired a number of clients in my days as an appraiser. If you want an analogy, I will be happy to give you one. How many attorney's will not charge more for higher profile or complex cases? Enough said.
Now to answer your question on what makes a quality appraiser. I will agree that a higher fee does not automatically mean a better appraiser. There may be quite a few out there that are overcharging for substandard work. There might also be a few hardworking, very good appraisers that are willing to accept a lower fee in order to get more work from a high volume client because they are just trying to make it through the slow times and keep some food on the table. But believe me when I say, when appraisals are done properly, a $200 fee is barely putting food on the table. But what makes a good appraiser has everything to do with competencies. I would be willing to bet the average person in the world does not know how to develop a regression analysis or even knows the meaning of standard deviation, appraisers do. They probably don't fully understand comparative analysis either. I know because I get plenty of these questions here in this forum. I don't want to get caught up in details, but at a minimum, a good appraiser should have good analytical, critical thinking and problem solving skills. They should be good communicators and I would also add that they should probably have a pretty good grasp on principles of real estate, architecture, construction, building and zoning codes, and government/private lending regulations. I am sure there are more but for the sake of time...
There are significant expenses in this business and I want to emphasize the word BUSINESS. Your example of 1 appraisal a day at $200 is a $1000/wk.(that's $52,000/yr) may sound just fine for the average salary until you pay for expenses, corporate and personal taxes, at a higher rate that a W2 employee I might add, and you also assume that this is an individual appraiser running a one man shop. I sure hope this appraiser doesn't have an employee payroll. I would like to see the P&L statements of any appraiser which allows you to assume there are not much expenses in this business. Anyone who makes that claim are either cutting corners somewhere or lying to you.
As far as the Frank-Dodd Act is concerned, I am in some way inclined to agree that free market should dictate appraisers fees and that government intervention should be minimal. For those that are unfamiliar with this Act, there is a portion which requires a lender to ensure that appraisers are paid customary and reasonable fees for the market area. These fees are to be based on fee studies which exclude fees paid by Appraisal Mortgage Companies, which historically pay lower fees to appraisers because they require a split of the fee paid by the lender. However, I personally don't see why this is a problem. If the AMC is in place for the service of the lender, they should charge their fee to the lender separate from the appraiser's fee. An AMC is NOT for the benefit of the appraiser, they are a service for the lender and the appraiser should not be giving up a portion of their fee to the AMC. Now, if the AMC fee and the appraiser's fee are separated, and they still found it necessary to find the cheapest appraiser, that is just fine with me. Market forces will then dictate an appropriate fee. The problem with the current business model is this: an AMC charges the lender $450 for an appraisal, then the AMC proceeds to find the cheapest appraiser, let's say $200. Now the AMC is padding their pocket $250 for ordering an appraisal and the appraiser who spends 8-10 hours doing the appraisal only gets $200. The AMC's get away with this because they are the gate keepers of the bulk of appraisal work since the inception of the HVCC. Based on this alone, it is clear that Guest might be pointing a finger in the wrong direction. Perhaps Mr./Ms. Guest should point a finger at the AMC's for overcharging for simple work. I will agree there are some AMC's that employ appraisal reviewers to browse the reports for quality before being forwarded to the lender, but DENIAL may be in assuming that the AMC does more work in the appraisal process than the appraiser. So this ACT is not about giving the appraisers a bone, it is about keeping the AMCs honest.
I think I am going to end here. There are several more points that I would love to make, but in a sense, I feel it is a waste of my time and time=money. It is clear that this Guest is not an appraiser and knows very little about the appraisal industry. In my opinion, it may be wise for this Guest to get some better facts before bashing an entire industry and making claims that all appraisers are lazy and appraising is easy.
First of all, I resent the implication that appraising is easy or that appraisers are lazy. For those who believe that, probably never completed their first appraisal. I am not saying that all appraisers are equal, and there very well may be a few lazy appraisers in the world, just like I am sure that there are lazy people in whatever industry you are in as well. But if done properly, the amount of time to research, verify, and analyze data in addition to reasonably well reporting takes substantial time. Complex assignments take MORE time, thus justifying additional fees. Your comment about what other job can you ask your boss for more money on a complex assignment is a false analogy. First of all, if I am completing an appraisal for you, you are not my boss, you are my client. I am a business owner and I make the business decision to require more money on complex assignments or I can also make the business decision to charge less for a client that offers higher volume of appraisal orders. In the end, you the consumer can either pay my requested fee or find another appraiser. And believe me, I have fired a number of clients in my days as an appraiser. If you want an analogy, I will be happy to give you one. How many attorney's will not charge more for higher profile or complex cases? Enough said.
Now to answer your question on what makes a quality appraiser. I will agree that a higher fee does not automatically mean a better appraiser. There may be quite a few out there that are overcharging for substandard work. There might also be a few hardworking, very good appraisers that are willing to accept a lower fee in order to get more work from a high volume client because they are just trying to make it through the slow times and keep some food on the table. But believe me when I say, when appraisals are done properly, a $200 fee is barely putting food on the table. But what makes a good appraiser has everything to do with competencies. I would be willing to bet the average person in the world does not know how to develop a regression analysis or even knows the meaning of standard deviation, appraisers do. They probably don't fully understand comparative analysis either. I know because I get plenty of these questions here in this forum. I don't want to get caught up in details, but at a minimum, a good appraiser should have good analytical, critical thinking and problem solving skills. They should be good communicators and I would also add that they should probably have a pretty good grasp on principles of real estate, architecture, construction, building and zoning codes, and government/private lending regulations. I am sure there are more but for the sake of time...
There are significant expenses in this business and I want to emphasize the word BUSINESS. Your example of 1 appraisal a day at $200 is a $1000/wk.(that's $52,000/yr) may sound just fine for the average salary until you pay for expenses, corporate and personal taxes, at a higher rate that a W2 employee I might add, and you also assume that this is an individual appraiser running a one man shop. I sure hope this appraiser doesn't have an employee payroll. I would like to see the P&L statements of any appraiser which allows you to assume there are not much expenses in this business. Anyone who makes that claim are either cutting corners somewhere or lying to you.
As far as the Frank-Dodd Act is concerned, I am in some way inclined to agree that free market should dictate appraisers fees and that government intervention should be minimal. For those that are unfamiliar with this Act, there is a portion which requires a lender to ensure that appraisers are paid customary and reasonable fees for the market area. These fees are to be based on fee studies which exclude fees paid by Appraisal Mortgage Companies, which historically pay lower fees to appraisers because they require a split of the fee paid by the lender. However, I personally don't see why this is a problem. If the AMC is in place for the service of the lender, they should charge their fee to the lender separate from the appraiser's fee. An AMC is NOT for the benefit of the appraiser, they are a service for the lender and the appraiser should not be giving up a portion of their fee to the AMC. Now, if the AMC fee and the appraiser's fee are separated, and they still found it necessary to find the cheapest appraiser, that is just fine with me. Market forces will then dictate an appropriate fee. The problem with the current business model is this: an AMC charges the lender $450 for an appraisal, then the AMC proceeds to find the cheapest appraiser, let's say $200. Now the AMC is padding their pocket $250 for ordering an appraisal and the appraiser who spends 8-10 hours doing the appraisal only gets $200. The AMC's get away with this because they are the gate keepers of the bulk of appraisal work since the inception of the HVCC. Based on this alone, it is clear that Guest might be pointing a finger in the wrong direction. Perhaps Mr./Ms. Guest should point a finger at the AMC's for overcharging for simple work. I will agree there are some AMC's that employ appraisal reviewers to browse the reports for quality before being forwarded to the lender, but DENIAL may be in assuming that the AMC does more work in the appraisal process than the appraiser. So this ACT is not about giving the appraisers a bone, it is about keeping the AMCs honest.
I think I am going to end here. There are several more points that I would love to make, but in a sense, I feel it is a waste of my time and time=money. It is clear that this Guest is not an appraiser and knows very little about the appraisal industry. In my opinion, it may be wise for this Guest to get some better facts before bashing an entire industry and making claims that all appraisers are lazy and appraising is easy.
A sterling example of sour grapes from somebody who simply wishes to make some noise about another industry, followed by a sterling example of a reasoned, sound counter-argument.
I agree with you, Ben; Guest should have the cojones to more clearly state where he/she is coming from, and to plaster the entire appraisal industry with that commentary is absurd.
I am not an appraiser; never have been. I am a lender, an underwriter, a consultant, etc. and I've had plentiful experience in working with appraisers and reviewing their work. I'm in full agreement with Ben's notion that there are lazy appraisers just as there are lazy underwriters and originators, and lawyers and ditch-diggers and husbands and wives (how about all mankind?).
In the recent past, I've reviewed appraisals provided by AMCs whose hires made it quite plain that their fee (net) was (for example) $175. Min you the AMC charged at least $300 or $350, so yes, they're taking money out of the pocket of what might be a quality appraiser (not so much in the specific instance I'm discussing).
What is a reasonable fee? Well, it sure isn't $175 or $200 for the job that's done. Appraisers are professionals, and deserve to be paid a commensurate sum for their professionalism.
Of course, I'd say that about mortgage originators too, but we all know that's strictly a commission business (wouldn't it be nice if potential borrowers had that information?
I agree with you, Ben; Guest should have the cojones to more clearly state where he/she is coming from, and to plaster the entire appraisal industry with that commentary is absurd.
I am not an appraiser; never have been. I am a lender, an underwriter, a consultant, etc. and I've had plentiful experience in working with appraisers and reviewing their work. I'm in full agreement with Ben's notion that there are lazy appraisers just as there are lazy underwriters and originators, and lawyers and ditch-diggers and husbands and wives (how about all mankind?).
In the recent past, I've reviewed appraisals provided by AMCs whose hires made it quite plain that their fee (net) was (for example) $175. Min you the AMC charged at least $300 or $350, so yes, they're taking money out of the pocket of what might be a quality appraiser (not so much in the specific instance I'm discussing).
What is a reasonable fee? Well, it sure isn't $175 or $200 for the job that's done. Appraisers are professionals, and deserve to be paid a commensurate sum for their professionalism.
Of course, I'd say that about mortgage originators too, but we all know that's strictly a commission business (wouldn't it be nice if potential borrowers had that information?
