Coester Appraisal Group, a nationwide appraisal management company releases its
annual appraisal industry survey. Over 1,559 licensed and certified appraisers
completed the survey with the results shedding some insight into the appraisal
industry and what is really happening in the appraisal industry. The data was collected
directly from appraisers via SurveyMonkey, various websites, press releases and e‐mail.
After further analysis of the data from the Annual Coester Appraisal Group Vendor
Survey, it seems like many of the implications made regarding the state of the mortgage
industry as a whole have been debunked.
FINDINGS
A total of 1,569 appraisers completed the survey, with a majority of appraisers licensed
in one state and some as many as seven. Appraisers in all 50 states are represented in
the survey.
Distance – One‐third of respondents traveled an average of 15‐20 miles from the
appraiser’s place of business to an assignment with an additional 31.4% traveling 10‐15
miles. This is consistent with the TAVMA survey that indicated the average travel
distance for an appraiser is 13 miles ( TAVMA Survey can be found on their
website)
Response Time – As shown in Exhibit 1 and 1A, the average turnaround time of 2‐3 days
from assignment for a Conventional 1004/1073 and 4‐5 days from receipt of the order. This was consistent regardless of it was completed by an apraisal management company or directly to an appraiser.
Exhibit 1
Exhibit 1A
Fees ‐ Contrary to mainstream data reports, 64.65% of appraisers charge the same
amount whether contacted through an AMC or directly by the lender. Fees on
Conventional and FHA 1004/1073 appraisals ranged $350‐$450. One of the more
popular misconceptions in the industry is that AMC’s earn a huge margin by paying
appraisers $150‐$200 while charging the borrower $450‐$500. Our data proves this
wrong, showing that although appraisers quote lenders $350‐$450 for appraisals, they
net $250‐$300 for a Conventional appraisal and $300‐$350 for an FHA report. This
translates into appraisers receiving over 70% – 80% of their original quoted fee and the AMC
retaining the other 30% or 30 cents on the dollar.
Though many may not agree with the changes that the Home Valuation Code of
Conduct (“HVCC”) has brought to the industry including the proliferation of AMC’s,
71.1% of appraisers work for one or more appraisal management companies. This
appears to be a necessary “evil” in order to continue their career and livelihood. The
top AMC’s noted in the survey results are LSI (22.8%), Landsafe (19%), RELS Valuation
(27.59%), Quantrix (16.1%), Solidifi (6.9%), Appraisal Port (11.5%) and Coester Appraisal
Group (5.2%).
Overall, appraisers rate their AMC experience as simply “average.” The demand of
quick turn times coupled with reduced fees were prominently cited for the average
rating. Another reason was the abundance of report stips. The currently lending
environment can, of course, be the counter argument to the last point.
Payment ‐ A considerable number of comments regarding slow pay from AMC’s and
lenders alike were a revealed where 36.9% of appraisers would like to be compensated
on a net 15 payment schedule and 35.4% of appraisers preferring a direct deposit
method of payment. As a result of this survey, while Coester Appraisal Group currently
pays on a net 30 basis, we are currently making improvements to offer direct deposit to our vendors.
General Feedback ‐ The most prevalent feedback on AMC’s pertained to reduced or set
fees. Other concerns that ranked very high on the list are as follows:
1) Turnaround time expectations and pressure‐ Numerous appraisers state that this
is one of their main concerns (besides fees) when it comes to working with
AMC’s. They say that despite the enforcement of the HVCC, they still get
pressured from unknowledgeable staff to get the appraisal submitted
immediately. Appraisers feel as if AMC’s do not have staff members that are not
trained or licensed appraisers, therefore they are not aware of all the factors and
research that go into composing an appraisal report, especially in a rural area.
2) Too much follow‐up‐Appraisers feel that the time they spend answering phone
calls from AMC’s regarding status updates could be used doing more productive
things such as composing reports, doing inspections, etc. Although there are
some companies that may be a little excessive with checking on the status of a
report, but this topic is a double edged sword because there are plenty of
appraisers that do not take any initiative to call the AMC with an update before
they get the chance to call them. To be honest, the calls will stop when
appraisers start being proactive rather than reactive when it comes to the status
of a report. When AMC’s do not know what is going on with their files and the
lender is questioning their competency and reliability, it appears very
unprofessional, so phone calls must be made to the appraiser until an answer is
provided. Period.
3) Better communication‐ Respondents state that when it comes to getting
answers to questions from AMC’s, it definitely needs improvement. They are
disturbed about the fact that these companies expect them to answer questions
immediately, however when it comes to getting an inquiry response that is
imperative to the appraisal process, it is impossible to reach a staff member or
they reach someone who cannot speak proper English.
4) Lack of appraisal expertise/uneducated personnel‐As previously mentioned,
appraisers feel as if a majority of the staff is not competent when it comes to the
appraisal process, especially those that are in the review department. They feel
as if their appraisal reports are solely rated on a “checkbox” scale that AMC staff
is trained to use and that is the extent of their expertise.
5) Unfair/Non‐existence of rotation of assignments‐Appraisers are concerned with
the fact that they can never seem to get into the rotation to receive work from
AMC’s. They feel as if they are just another “fish in the sea” and no matter what
they do, appraisal management companies already have a selected pool of
appraisers that they give repeat business to.
6) Time it takes AMC’s to pay the appraisers‐Coester Appraisal Group is currently
paying appraisers on a Net 30 pay cycle. According to the data results above,
their preferred method of payment is on a Net 15 basis and some appraisers
report payment delivery times of six months after being quoted otherwise.
7) Broadcasting of Appraisal Orders‐Respondents also seem to be disappointed
with some of the methods used to assign appraisal orders, a main concern being
an appraisal “broadcast.” This is when a mass e‐mail is sent out to every
appraiser that services the subject area and the first one to respond to it gets to
complete the order. Appraisers feel as if this is the most impersonal way to do
business because you are not getting to know your vendors at all and some
appraisers even refuse to work with companies that choose to broadcast their
orders.
Global Disclaimer
Coester Appraisal Group specifically prohibits the redistribution of this material in whole or in part
without the written permission of Coester Appraisal Group and Coester Appraisal Group accepts no
liability whatsoever for the actions of third parties in this respect.
Pingback: New Jersey Real Estate Report » NJ Home Buyer Credit? Misguided … | New Jersey Real Estate
Brian,
Thanks for posting the results of your survey. Although I do not dispute the results you posted, I wonder about the respondents and the significance of the findings.
Perhaps the most interesting observation made is this one, explaining why a claimed 71.1% of appraisers work with at least 1 AMC:
“This appears to be a necessary “evil” in order to continue their career and livelihood.”
The country and the appraisal profession would be much better off if AMCs earned their place in the market by offering a proven and necessary service instead of being handed the market position by ill conceived settlement agreements (HVCC) forced on unwilling participants. It’s time to level the playing field, and regulation of AMCs is the first step in that process.
http://www.naihp.org/legislativeissues.html &
http://www.facebook.com/pages/Washington-DC/National-Association-of-Independent-Housing-Professionals/215664796530?ref=tsHVCC Update: March 5, 2010
Last week, NAIHP President Marc Savitt and VP Ian Coates, met with the office of Senator Tim Johnson, (D-SD). The meeting centered around NAIHP’s HVCC Proposal and their overall “Main Street Solution.” The Proposal, developed in cooperation with Brokers, Realtors and Appraisers, enhances existing language in HR 4173, which passed the House of Representatives in December 2008. The Senate is currently working on their version of this legislation.
“Our HVCC Proposal gives Senators an additional comfort level with respect to legislation nullifying HVCC, according to Savitt.”
On March 4, 2010, Savitt and Coates met with FHFA General Counsel Alfred Pollard (regulator for the GSE’s) and discussed the NAIHP Proposal. (More about this meeting later).
Since May of 2008, one full year before the implementation of HVCC, Savitt has met with the NY Attorney General’s Office 5 times, the FHFA 7 times, Fannie and Freddie twice, along with numerous Members of Congress. He has also testified twice before Congress on this issue. Marc has appeared on numerous cable news shows and has been interviewed by the press countless times in his campaign to end HVCC and the harm it creates to consumers and small business professionals.
Be sure to join NAIHP and help build one of the largest grass roots organizations.
Click the “Join Now” http://www.naihp.org/application.html
Pingback: Why Do You Need a Real Estate Appraisal? Qnagold.com | Real Estate Finance Wisdom
Francois, thank you for the comment. I agree the HVCC was thrown on AMC’s as they had a business model helping banks (who haven’t been allowed to order there own appraisals since 1992) and larger financial institution, Citi, BOA, Chase.. etc. Legislation is probably going to hurt the consumer more than anything as prices will go up. We recently paid over $25,000 in fees associated with getting registered as an AMC in several states with insurance, bonds and attorney fees included. As more and more AMC’s take on this its only going to increase the cost to the consumer. What they really need is a national legislation that would enable AMC’s to be registered, audited and confirmed compliant but also enable enterprising appraisal start-ups to become an AMC and compete with the LSI’s
Pingback: Does AMC Survey Shed Light on “Propoganda”? : Appraisal Insight
I am wondering just how neutral a survey is when it is done for the benefit of the publisher. Finally, AMC’s are being regulated as they should be . They have run rough shod over the appraiser since the beginning. AMC’s increased in power as the major lenders recognized there is another profit center in this “real estate game”. Hopefully, HR 4173 will be passed soon…in that bill the lender will pay the appraiser directly and the AMC will clearly state what service they are providing and what the lender is paying for. It’s about time!
Give the AMCs a break. Let them lie to americans for a little longer. What comes around usually goes around and the AMCs have already planted the seeds for their own untimely deaths. Cuomo is so arrogant that he also fails to realize that HVCC will cost him the NY governorship.
Realtors, appraisers, mortgage brokers, & borrowers have endured the HVCC ass kicking for nearly 12 months.
The time has arrived for these four groups to render a relentless asskicking in reverse.
CONTACT YOUR U.S. SENATOR ABOUT GETTING RID OF HVCC WHILE BEFORE THEY VOTE.
ASK EVERYONE YOU KNOW TO CONTRIBUTE FUNDS TO WHOMEVER OPPOSES ANDREW CUOMO FOR NY GOVERNOR IN 2010. CNBC RAN A GREAT STORY ON HOW HE WAS RESPONSIBLE FOR THE FINANCIAL CRISIS. USE THAT STORY TO HELP RAISE FUNDS. END HIS POLITICAL CAREER NOW!!!
Pingback: Appraisal Management Company Directory 2009. | Insider Forex Secrets Guide
I love how this article states that AMC’s “ONLY” retain 20-30% of the fee. I don’t think that they add 20-30% in value to the lender. There are other options out there for lenders and appraisers…you just have to look around. The changes (hvcc and fha) don’t “require” lenders to use an AMC.
The above story and comments clearly indicate that Marc Savitt and the NAIHP are lobbying. Are they registered to lobby? Who do they represent? Their website implies they support all independent housing professionals, how many people actually belong to the NAIHP? This is important stuff and I’ve personally experienced now what a hothead Marc Savitt is. I hope Congress doesn’t think he represents realtors and homebuilders.
John –
I would say that he’s not. The NAIHP was started in October ’09 according to “whois.com”. He is just trying to get something started. It’s nothing close to the NAR or AI as far as memberships. Both of those associations haven’t really done much for the progression of the industry.
Performance cannot be appraised without the existence of an explicit standard. This is the other major benefit to both organisations and their staff in introducing appraisal systems: it forces discussion and agreement on an objective standard of performance which staff members are supposed to reach. Performance is appraised in all organisations: when this appraisal is purely subjective and based on different criteria and different people’s definitions of “acceptable”, organisations leave themselves wide open for political behaviour, favouritism (or accusations of it) and demotivated staff.