Appraisers' Free Forum

The article attempts to justify lower fees paid by AMCs and the AMC model in general.

http://tavma.blogspot.com/2009/05/economics-of-optimal-number-of-vendors.html

The blog says it moderates and will only publish a comment after approval. Based on some of the other comments, I have little doubt I'll be approved, but you all know how I feel about blog moderators changing or disallowing comments after I have taken the time and effort to write them, so I'll post my comment here, as well:

The simple fact is, it takes a certain amount of time and effort to do each appraisal. If you are going to do a decent job, there is very little, if any, economy of scale in getting multiple appraisals from a single vendor. My appraisal fee is what it is and no amount of quantity ordering could induce me to lower it. In fact, in my experience, it is a much better business model for the appraiser to have many vendors who each only order a few appraisals a year... this protects the appraiser from fluctuations in the vendor's business. However, it is also a much better deal for the vendor to spread the business among multiple appraisers. This protects the vendor from the possibilities of an individual appraiser or appraisal firm becoming overburdened and not being able to provide good service.

I posted a reply on there as well, I believe yesterday. I haven't seen it yet.

I didn't keep a copy but it pertained to low fees and appraisers who accept them.

Appraisers who work for low fees, or give volume discounts are one kind of the enemies within. Steve has the right idea. Appraising should always result in a hand crafted detailed and well supported expert opinion. It is specialized, individualized process and not a commodity. It takes time and it stands to reason that if you respect your appraiser you would want to pay him/her well and allow plenty of time.

Also, the emphasis on preserving independence is interfering with the relationships that are so essential to professional services.

Good post Steve. My guess is TAVMA types don't want to understand it though, and so they won't.

Edd Gillespie wrote:Good post Steve. My guess is TAVMA types don't want to understand it though, and so they won't.

Actually, almost all the posts on there were negative towards the article. Most were very negative, and a few were not very professional. My post made it on (I didn't see Annemieke's, or if I did, I didn't recognize it) but it probably got drowned out to some degree by all the shouting.

Jeff, like many folks maintaining blogs, is fair about accepting comments. Over on Appraiser Active I approve just about every one (not that there are a bunch). The only reason to moderate is to ward off spammers and over the top profanity.

Back in April, we had some good back and forth about the regulation of AMCs. Jeff was a good sport and got involved in the conversation. Unfortunately, he often resorts to many unsupported assumptions about the number of appraisers, and the use of simplistic arithmetic to support his preconceptions.

HERE is another example. Annemieke has already been there.

Francois K. Gregoire wrote:Jeff was a good sport and got involved in the conversation. Unfortunately, he often resorts to many unsupported assumptions about the number of appraisers, and the use of simplistic arithmetic to support his preconceptions.

I guess blogging is a form of sport, which may justify Jeff Schurman's incredibly weak arguments. Weak to the point of nonsense. Maybe he's just trying to see how much he can get away with, which certainly goes to his credibility. Never, never forget that he is the head of a trade organization that could care less about the health of the appraisal profession. Absolutely could care less. Indeed, a diminished and incapacitated appraisal industry may be of benefit to his group.
My problem with one of his recent comments is that he turns to a statement by an anonymous appraiser to support a conclusion that AMCs are accepted by the appraisal community. I read the anonymous statement and what the guy says about his appraising and business just won't stand scrutiny. Jeff simply debates the issues with misinformation, good sport or not.

Francois K. Gregoire wrote:Jeff, like many folks maintaining blogs, is fair about accepting comments. Over on Appraiser Active I approve just about every one (not that there are a bunch). The only reason to moderate is to ward off spammers and over the top profanity.

Back in April, we had some good back and forth about the regulation of AMCs. Jeff was a good sport and got involved in the conversation. Unfortunately, he often resorts to many unsupported assumptions about the number of appraisers, and the use of simplistic arithmetic to support his preconceptions.

HERE is another example. Annemieke has already been there.

Ah, THERE it is! (I am a little blog challenged)

blogging is a form of sport

blood sport that it may be.

I note the following.

A- It does not take $100 to administer the ordering of an appraisal...in fact, it probably takes less that $10 an appraisal

B - the idea that the AMC will defend the appraiser from pressure from a lender is down right silly

The idea may be a little hard to wrap your head around, Ter, but I've had LSI agents go toe-to-toe with clients in my behalf.

Yeah Jim, but I have had them cater to the lender on their behalf despite my protests. I had them come back to me three weeks later with a lender stip (not LSI) asking me to provide another two bedroom sale and listing for an appraisal I performed. I had four sales (three two bedroom home sales within six months) and two listings (one two bedroom home) already in the report. In fact, I noted in my comments that the two bedroom homes sold for more than the three bedroom homes so no bedroom count adjustment was supported. I asked LSI to make the lender stip go away because it was frivolous and they would not do it.

Daf, I've had some of those, too--but direct from the lender (not thru LSI). The way I answered them was to say that the sales used were the most recent, most proximate, and moat similar. If another comp were to be added, it would only serve to weaken the report, not strengthen it as they wished. Then I discussed two other potential sales, pointing out that one would require a $20K location adjustment, and the other was a MH done up to look like a real house.

That may or may not work in your market. It did for mine, but I still had some hand-holding to do. Having done all this, the UW now thinks I can walk on water and pee a good-quality Merlot. The LO wants to have my children (but he's not my type), because they were able to sell the loan due to my explanations.

I don't know how long ago your incident was (mine was last year). But in these times, one has to do a lot of hand-holding to get skittish investors to lend in a rural market. My first reaction was a nuclear meltdown, and my wife wouldn't let me send the e-mail. After taking a more diplomatic approach, I'm glad I did.

Jim Plante wrote:The idea may be a little hard to wrap your head around, Ter, but I've had LSI agents go toe-to-toe with clients in my behalf.

I've had LSI scum yell @ my wife over our fees.

I did one for them back in the '90's & sent the other four back & told them to shove it.