Editor’s Note: The following is excerpted from OREP/Working RE webinar: Maximizing AMC Orders and Income, presented by appraiser Bryan Knowlton. Knowlton says it is possible to have a thriving and rewarding appraisal business working with AMCs.
How to Work Successfully with AMCs
by David Brauner, Editor
If you work with Appraisal Management Companies (AMCs) or are willing to keep an open mind about it, here are several key points on how to find the best companies to work for and how to make more money with less struggle, according to one appraiser who is doing just that.
Bryan Knowlton, a Certified Residential Appraiser in San Diego, Calif. and presenter of the webinar Maximizing AMC Orders and Income, has been appraising over 10 years. He says he is having his best year ever- doing mostly AMC work. About 80 percent of his business comes from AMC work- the rest are private appraisals for estate purposes, date of death, divorce and bankruptcy.
Contrary to what many appraisers believe, one of the keys to success for keeping well-paying orders flowing from AMCs is performing high-quality work on a consistent basis. According to Knowlton, this doesn’t mean working for sub-par wages, chasing your tail over quick turnaround times and succumbing to an endless stream of unnecessary stipulations and corrections. The opposite is true and leads us to another key to success: finding which AMCs to work for and firing the others.
If you’re making less than customary and reasonable fees or working with AMCs who don’t seem to care about the quality of your appraisals or the competency of their staff, you’re working with the wrong companies. It’s all about choices, Knowlton says.
“I don’t work for less than customary and reasonable fees- I don’t have to because there is so much work coming in these days,” Knowlton says. “I don’t work for companies who seem to want to find mistakes or who hire incompetent reviewers or overseas personnel. If a company comes back with endless corrections that I feel are unnecessary, I will ask to speak to a supervisor to explain how this is wasting everyone’s time. If it doesn’t stop, I keep raising my fees until they either stop using me or, as in some cases, they need me enough to pay the higher fees, justified by all the extra time and work. Either result is okay with me.”
The keys to working successfully with AMCs, Knowlton says, is finding the best of the bunch and weeding out the worst; producing quality reports all the time and having an efficient, streamlined process.
Knowlton lives and works in San Diego County (Calif.), one of the most saturated markets for appraising in the nation, he says, so it’s not that appraisers are scarce in his area. He says a customary and reasonable fee for a typical tract home is around $350. He seldom accepts less and frequently demands more, sometimes much more depending on the complexity of the property.
Knowlton says he often requests fee increases and is paid more, over $1,000, for the more complex properties. He says he increases his fees for more complex properties routinely- usually $100 or so more for each extra hour of work. “Many times you’ll get your fee increase,” he says. “Sometimes an AMC might move on but again, it’s ok either way. There is plenty of work at fair fees. The process allows you to weed out those you don’t want to work with and allows you to be a consistent producer for those you do. Just keep a cool head and don’t take it personally when you are offered low fees.”
Which brings us to another key for success- negotiating fees: “You have to negotiate fees with the AMCs,” Knowlton says. “You have to be able to show them why the order requires more time and effort and a higher fee. Once they trust you, most of the time you will get what you deserve or close to it. If they move on or drop you, that’s fine, because that’s not who you want to work for. Remember, don’t take it personally.”
Like many appraisers, Knowlton was blindsided by HVCC and lost most of his business overnight. “I had a couple of mortgages and a family to feed. There were some desperate moments when I worried about putting food on the table,” he says.
Knowlton’s prior career in Internet marketing saved the day; he went to work doing one of the things he does best: scouring the web for every AMC he could find. Initially, he exchanged information freely with other appraisers around the country about the best AMCs to work for and how to work for each most efficiently. Slowly he began to build his business back up. Out of the struggle came the Appraisal Management Company Resource Guide, which he now updates regularly and markets here.
“The first 45 listed in the AMC Guide send me 95 percent of my work. They are national appraisal management companies that are verified and are sending orders,” he said. “I personally verify and sign up to each company listed. I call to find out where there is an immediate need for appraisers and let readers know.” He says there also are vendor specific errors to avoid so you make fewer mistakes from the beginning and get more repeat orders.
“I remove deadbeat AMCs and all the companies that have gone out of business, which lowered the number to around 300- no need to waste your time applying to companies that don’t send work or are out of business. I also updated the marketing information, tips and advice on my best techniques for getting more business and making more money,” Knowlton said.
This brings us to step one for success: finding the right AMCs to work for. “It starts with a good list,” he says.
Next, he says, you must sign up with as many AMCs as possible, approaching it like a business. “I type over 100 words a minute but if you don’t, it pays to hire a family member or friend to fill out the AMC applications. Don’t get frustrated; pay someone to fill out the applications for you. Imagine the amount of work you will get if you sign up to 300 companies over a period of a couple weeks,” says Knowlton.
In the webinar Maximizing AMC Orders and Income, Knowlton shares other tips for fostering relationships with AMCs with plenty of dos and don’ts, including how to streamline the submission process, improve your work product, negotiate fair fees and how to approach your vendor manager with problems before terminating the relationship; in short, how to nurture good relationships and pull the plug on the bad ones.
“Now’s a great time to be an appraiser,” he says. “There are fewer appraisers and with the high hurdles now in place, fewer will be able to join our ranks.”
It’s all about taking action now Knowlton says. “AMCs did serious damage to our profession, I’m not saying otherwise. And there are a lot of really bad ones out there,” he said. “I believe in advocacy to help appraisers consolidate power and speak with one voice. But at the same time, I’m not waiting around for the government or some organization to come bail me out. I like appraising and am making a good living at it. With a good list you will never run out of work again, provided you use it. I just hope the webinars and AMC Guide help fellow appraisers take action and do something instead of complaining. No matter what change happens, AMCs are here to stay. Find the good ones to work for, weed out the bad ones; do good work and demand what you’re worth.”
You can purchase a recorded version of the webinar Maximizing AMC Orders and Income here, as well as Bryan’s other webinar: Building Your Business and Gaining Clients, which deals with Internet marketing and how to increase business from full-paying clients. You can learn more about the Appraisal Management Company Resource Guide here.
About the Author
David Brauner is Editor of Working RE magazine and Senior Broker at OREP.org, a leading provider of E&O Insurance for appraisers, inspectors and other real estate professionals in 49 states. He has covered the appraisal profession for over 20 years. He can be contacted at email@example.com or (888) 347-5273. Calif. Insurance Lic. #0C89873.