AMCs - A Bridge Too Far?


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Editor’s Note: This is one appraiser’s response to a recent WRE story: Appraisers, AMCs and Building Bridges. He writes under an alias due to fear of retaliation from his AMC clients – and he has something to say about that too.

AMCs – A Bridge Too Far?
By John Doe

Last night I lost a second appraisal from an AMC. All I was asking for was an additional $25 fee, which is $25 less than the customary and reasonable fee for this area. I lost two assignments yesterday this way. So today I’m not working.

I am a Certified Residential Appraiser. I attended the Appraisal Summit last year and saw the panel that you (David Brauner) moderated. I also liked your article Appraisers, AMCs & Building Bridges in Working RE (Visit; click Library, WRE Online). I am interested in your reporting on the auditing process of AMCs to determine who gets the appraisal, and their assertions that it is based upon competency first. In my experience, this is the exception, not the rule. I have found the opposite to be the case.

The AMCs are in a straight commodity arbitrage business. The only way they make money is by increasing their margins. Get more for the appraisal and then pay as little as possible. Despite what these AMC people say, to portray it in any other way is to miss the point. As an appraiser, I am on the opposite side of the table from the AMCs I work with. They want me to work for as little as possible and I want to charge as much as possible. It is an adversarial relationship, though it can be mutually beneficial.

My fees are below or equal that of most of my peers with whom I spend a lot of time. For example, today I got a request of $240 for a 1073 (Condo) form. They typically pay me $325 but due to the slowdown in lender work, they know they can pay less. I wrote them back and quoted $300. They wrote back and said, “Thanks but no thanks.” The reason I lose most of the AMC work offered to me is exclusively due to price. I have a 100 percent clean history and do clean and error-free work. The reason I lost the contract was my fee. Not regional competency. My only choice as an appraiser, as someone who has performed professionally in the field for 22 years (never sued, never sanctioned or scolded) is to accept this unequal power structure or leave the business.

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In the go-go days that led up to the housing collapse, the financial institutions set up a structure that ensured appreciation in the housing market. Loan officers would give more/all work to appraisers who “hit” an inflated value. The same system is at play today with regard to appraisers and their fees. The system is set up to reward appraisers who perform at the lowest price. The appraiser who can turn around assignments the fastest and the cheapest get the work. But the appraisal fee doesn’t go down for the customer, it goes down for the appraiser.

What I struggle with is that when all lender work was detoured through AMCs by the government, it took away my ability to negotiate with equal power. Since we are compelled to be in this relationship with AMCs, I don’t see why it would be unethical to set standard brokerage fees for AMCs. Create a dynamic where appraisers and AMCs have equal power.

Finally, appraisers are afraid to speak freely and publicly. My name is not attached here because one of the AMCs that I deal with made me sign an agreement that states that I will not say disparaging things about them, otherwise they can sue me. These institutions aren’t afraid of appraisers speaking lies about them; they are afraid of appraisers speaking the truth about them and are seeking to suppress open and honest discourse.


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Comments (21)

  1. by hammering hank

    Low fees are for the “flunkie” trainees. These unethical morons running “boiler room” appraisal shops are taking all the appraisals en masse; accepting the cheapo fees from any AMC; and then having the trainees do the field work. They have somebody type the report separate too. Completely unethical and against USPAP. That is why I stopped doing reviews; they were the majority complete garbage written, proofread; and edited by clueless appraisers.

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  2. John Shropp, that is EXACTLY how many of the low fee folks are handling it! That’s also part of the reason we are now seeing the CU and push toward regression. Neither will correct the unlicensed / untrained “appraiser” going into the field, but it is a wink and a nod from the powers that be that they are aware of the practice and (apparently) don’t care as long as results are in proper ranges….at least until the loans go bad.

    Our state agencies still care though. Your appraisal of your house had better have been signed by two people; and the SOW & cert should clearly spell out who did what.

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  3. Mark Hastert, are YOU a member? Seriously, you pointed to the problem. Will you join me in being part of the solution?

    American Guild of Appraisers (AGA)
    Mike Ford, Chairman, National Appraiser Peer Review Committee, AGA
    and yes, there is a reason the title is taken straight out of USPAP. We ARE already fighting back. JohnD.; my personal hero, the famous (former) Arizona appraiser of Chase fame rejoined and I personally have intervened on behalf of two appraisers in the past month. Successful in one and the jury’s still out on the other involving a state regulatory agency.
    (714) 366 9404 or OR and ask for Jan Bellas.

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  4. Jim’s right!
    Especially re fees.

    Also, whenever asked from now on offer the following. My below reasonable and customary amc rates are private. My NORMAL appraisal fees are: Non complex, conforming loan limit value range $650 based on its anticipated normal complexity. Complex or above conforming loan limits it is $750 up to $999,999 transaction amounts. Transaction amounts over one million dollars start at $1,000 and increase incrementally. IE: 1.5 million is $1,500; $2 million is going to be $2,000 PLUS a premium for any unusual complexities.

    You do NOT get certified level appraisers for the same fees trainees work for! You don’t have to agree with these fees, but start citing them and eventually THEY will be deemed “reasonable”, if not customary. I’ll be posting support for them on my website shortly. Since we cannot engage in price fixing understand these are recommended minimums-feels free to add 10% to 25% or more to them.

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  5. Wingfinger- If these are people you definitely wont work for, then publish their broadcasts! I am under NO OBLIGATION to keep an AMC’s inquiry (fee and turn time) confidential as they are NOT my client unless I enter into a relationship with them.

    OCWEN used to be infamous for this type of thing. Im told they have changed now, and that their California fees (as afar as AMC fees go) are in the $300+ range usually without their old habit of cancelling if a nominal increase is sought for complexity. I still think they are too low to work for, but at least they are on a par with other AMCs that are also too low to work for…no matter what name they currently operate under.

    We must never libel any of them, but shaming them? THAT is an excellent idea! Let THEM explain to THEIR clients how they assure the highest quality while being among the lowest / lower end cost AMC services.

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  6. Jorge, you are absolutely correct!

    Please Call me at (714) 366 9404 or email me at
    American Guild of Appraisers (AGA)

    I’d like to go over “reasonable” fee with you rather than so called ‘customary’ fees.

    I’ve recalculated equivalent federal appraiser pay back into a per assignment basis. I come up with $650 +-per non complex, conforming FNMA loan limit appraisals for Southern California. Other states would be +- local COLA multipliers.

    We need tos tart collectively embracing all the new requirements AND calculating how much extra time they really DO take! When someone tells me their 1004MC takes less than 15 minutes it also tells me that all they are doing is downloading automated form filler data and that there IS no actual analysis of the market conditions-merely spitting out market data for form filling purposes. The 1004MC alone should add $50 to $100 per report. Same with regression. Its going to cost from $15 to $30+- dollars per report to run NOT COUNTING our time, and then we have to explain and support it. Again, another $50 to $100 per report. I don’t add fees just to break even. If I do more work I want the cost of the work reimbursed but I also want PROFIT from doing it. The results are MY professional work product and opinion(s).

    AMCs and lenders think just because form filling software exists that it removes the requirement for us to do any actual analysis of that data. Additionally, I am not absorbing the cost of form filling software either.

    In 1986 my firm charged $275 per report. The norm was $250 for our competition. Even FNMA paid us $400 for an REO appraisal back then. Same with relo companies. I’ll be damned if I do the same work today for the same fees as then.

    Even $450 for non complex is too low-though we are all doing them for that or less once in a while (if we are working).

    A GOOD appraisal and report should take from 8 to 12 working hours. That’s properly researched ownership interests that exist (so the cost of ‘getting to’ the fee simple interest appraised can be calculated); to proper market definition, analysis and site zoning / highest and best use properly analyzed. Improvements properly and thoroughly addressed (C3 is NOT a description folks!); and comparable sales research, analysis and support for specific adjustments. That includes time to play phone tag with listing agents.

    At 12 hours a job, we can only do 3 a week in a 40 hour work week. The other 4 hours are spent dealing with lender inquiries or required admin.

    MOST appraisers work 50 to 60 hours a week to earn less than 40 hours pay. It needs to end NOW!

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  7. John Doe, you are basically correct in most cases. There are a few exceptions though.
    Fee IS a huge consideration for almost all larger AMCs. It may be 90% of the reason an appraiser is chosen.

    The other reason is an appraiser that never argues with them when they come back asking for some foolish additional work.

    The LAST reason is appraiser credibility and competency. IF you are in California or Nevada email me and I will give you the name of an amc that generally pays between $300 to $350; and when circumstances warrant USUALLY wont cancel you just because you ask for $25 more. Remind me by referring to OREP Author in subject line. ( . They are appraiser owned, but will never blacklist you because you simply disagree with them for good cause-on the other hand if you refuse to correct an outright clear mistake, either by new report or addendum as YOU feel USPAP requires, they will dump you.

    Also, you shouldto look into the American Guild of Appraisers (AGA) at we are organized, and we are trying to do something about appraiser abuse and low fees. Feel free to call me at (714) 366 9404. Mike Ford

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  8. Great article. I maintain a log called the “AMC Hall of Shame” to track email broadcast orders from the most predatory AMCs. Not all AMCs are predatory but the worst troll for the most desperate appraisers to take advantage of. A desperate appraiser working for a steep discount is incentivized to cut corners that a fairly-compensated appraiser would not. The predatory AMC then proceeds to defraud the unwitting client by charging a full price fee for the cut-rate work. We appraisers need to fight back: support unbundling of the appraisal fee from the AMC fee and tell all the realtors and buyers you know not to use the lenders that use predatory AMCs (bad AMCs blow up fair-market deals and refinances by using corner-cutting appraisers).

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  9. I think John Does article is right on target. And yes, I too have diversified and am doing less AMC work and more from other avenues, but there is only so much of that to go around and apparently everyone is looking to dump AMC work. So AMC’s have a whole sea of bottom feeders to pick from who except these low fees and sorry to say… produce crappy work. I too am thinking of leaving this profession….16 years nothing but a memory. Maybe I am just having a bad week. So, I ask everyone out there how do we as appraisers band together to save ourselves? Join your state coalition is one thing but what else? Who are these bottom feeders and don’t they ever read the same things we do? Don’t they see we are talking about them? Don’t they want to earn more $$…..really if you are one of THEM….for Gods sake stop accepting low fee appraisals!! Suck it up and stop screwing up the profession!! You are making all of us look bad!! Have some backbone….

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  10. John Doe is right on. I don’t boiler plate. I give actual reasons for the comps I selected. No one cares about quality; they care about your fee. Since I began appraising in 2002 expenses are higher, appraisals are twice as much work, the fees are lower, and quality doesn’t mean a thing so long as the boxes you checked pass their automated screening, And for this they want to pay me less than I made then? I recently left the business because it no longer made sense to work for $15/hour.

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  11. Every body complain about AMCs, but no one seems to realized that there is no appraiser’s worse enemy, than another appraiser itself. Yes, I am talking about those so called “appraisers” that have taken the profession and wiped their butts with it and dragged it to the floor level by becoming AMC servants and by accepting the misserable fees offered by the unscrupulous AMCs. I’ve been appraising since 1985, my fees in 1990 were much higher than those offered today by AMCs. Today there are many more requirements to do an appraisal report, and the cost to be an appraiser is way in the sky, continuing education, data fees, computer programs, etc., and still going higher up. Yet, some idiot “appraisers” keep accepting appraisal requests for ridiculous fees. I do not know of any other profession where “the professional” works for almost the minimum per hour, which is what one ends up earning at those rates. If you are one of those “idiot appraisers”, and DO NOT accept any appraisal requests unless they pay you what you want, and if every other “idiot appraiser” do the same, could you all imagine how much better financially we’d all be?
    Yes!…. we would all be much, much better financially, and besides that, we will always have the upper hand, because nor you or any other appraiser will take the “little bone” thrown to you by the AMCs anymore. Don’t think for yourself as an individual, think as part of a whole. As appraisers, we all could succeed if we all think collectibly. Accepting $200, $250, or even $300 fees will do nothing but keep you, and your family at a poberty level for ever, Is that what every appraiser taking those fees want? Lenders/AMCs call us the “professionals” when it is to their convenience. Why not show them that yes!! we are the profesional and should get paid as such? If you all decline to accept a low fee appraisal request, where else will they go? No where! They’ll have to pay, period.

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  12. @John Doe: you wrote, ” My name is not attached here because one of the AMCs that I deal with made me sign an agreement that states that I will not say disparaging things about them, otherwise they can sue me. ”

    How did they “make” you sign anything? Did they hold a gun to your head? Did you not come equipped with testicles? Do you not realize that they can sue you anyway?

    Seriously, start phasing out all the AMC’s who do this sort of thing. They need us more than we need them. Diversify. Join an appraisal organization and attend chapter meetings. Find out how to diversify away from AMC’s.

    And don’t just turn down the work when it’s offered at too low a fee. Instead, quote your real fee. And if that doesn’t scare them away, raise your fee until it does. Doing this will raise the surveyed “customary and reasonable” level in your area.

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  13. by Edward Girardeau

    This is absolutely correct and is one of the major reasons I gave up doing lender appraisals in 2014. I am now doing appraisals outside of the banking industry and AMCs and depend on income elsewhere. It is absolutely sickening to hear/read AMCs say they choose based on competency. They hire based on price and speed and if they get a competent appraisal, that is a bonus. We as appraisers have let this happen by letting people make decisions for us that were not in our best interest. I do not know what the answer going forward is.

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  14. There is something badly wrong with this situation. Why would anyone want to
    remain in appraising?Things need to change soon.

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  15. I have said it many times in the past and will say it again; the diminishing amount of appraisers eligible to perform work in federally related transactions need to stand together and say enough! I entered the industry when $375 was the minimum fee for any appraisal, $400 for FHA (So Cal). Since then the work involved for the appraiser has gone UP, the overheads to the appraiser have gone UP, the cost to the borrower has gone UP, yet the fee paid to the appraiser has gone DOWN. I left the industry in 2009, although I maintain the ‘extremely hard to get’ AR license. I am somewhat out of touch with fees now but am shocked to read of the insulting $240 offered for a 1073. What kind of quality and integrity are they expecting for that. One could likely make more money per hour flipping burgers after expenses are deducted, assuming the work was done thoroughly! The whole appraisal business has become an embarrassment and an insult in my opinion, the product of a government regime that does not understand the system, let alone care about it.
    And to john Doe, full credit for an excellently written article. You are too intelligent to be doing appraisals for $300 in the year of 2015.

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  16. True words have been spoken. In over 20 years I have NEVER been asked by an AMC for any qualification OTHER than FEE and turn time…. The AMC’s are making millions for doing NOTHING but driving up the cost to borrowers and being a nuisance to lenders and appraisers. It’s a redunculous and harshly oppressive environment for appraisers to be forced to work under. The AMC model is horrible for all involved and a free reign to abuse the system by them.

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  17. Wow, just read the anonymous post about an appraiser’s experience in dealing with AMC’s. It was as though I were looking in the mirror. 15 years as a field appraiser here, a degree in economics, and no sanctions to date. I simply cannot tolerate the lack of sufficient income combined with the horrible work-life imbalance of being an appraiser anymore. All of the business is basically run through the AMC model and it is a fact that the cheapest and quickest appraiser is the most desired. The fact that AMC’s have converged upon offered fees and turn times should suffice as evidence. So, this highly experienced and educated appraiser is going to give up. Yes, give up. I have always committed myself to success and have never considered giving up anywhere in my life. However, chasing the ever regulated and shrinking appraisal business is nothing but a dream anymore. The costs of doing business, endless client requirements, and lack of control over fee negotiation and prospecting new business and simply insurmountable business issues. Add to that the absence of an effective appraiser lobby group and the ultra successful and well funded Realtor and mortgage banker lobbies and there is simply no legitimate hope for beneficial change. The articles I read from the appraiser elders are void of clout and are all talking about science and big data in order to sell the field appraisers new software tools and programs. As most other rational appraisers have likely concluded ( but may not have yet admitted) the appraisal business has become best suited to those who cannot excel in another profession. I have given myself through the end of the year to shift gears and luckily have the support of my family. Don’t care if I burn through my savings in the process, I need to wake up and find the respect I deserve as a dedicated professional in society.

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  18. There is no question about the AMCs seeking the appraiser with the lowest fees as their primary selection criteria. The problem is that there are appraisers that will accept these low, to much lower fees. To see that in action just look at all of the “broadcast” assignments. These typically are sent out at $100, or more, less than I am willing to accept. However, every once and a while I will click on one as if to accept only to find out that the order has already been accepted. This is normally less than 1 minute after it was broadcast. As an aside, I was selling a house and I meet the appraiser at the property. The young man that showed up to do the inspection was very young and when I asked for his business card he allowed as how he didn’t have one with him. When the appraisal was delivered it was signed by someone I know is much older and been in the business much longer than the young man who did the inspection. Was the young man who showed up to do the inspection an unaccompanied trainee? Is that how the low fee assignments are acceptable?

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  19. Dear John Doe,
    The government did not divert your work to the AMCs, the lender did. They took the easy way out and used an AMC because it is the most cost efficient way to manage that function. AMCs were alive and well and beating down appraiser fees long before the financial crisis. The real problem for appraisers if that we are few and disorganized, and weak, and too poor to wield and power. That’s our fault. We won’t band together in trade guilds., The appraisal organizations squabble in self interest, and we imagine that we’re proud loners. Our plight is our own fault and shal remain so. In a decade or less we’ll be an anachronism.

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  20. John Doe is right on target. I see this fee issue every day, it is strictly a take it or leave it proposition with some AMC’s, not all or I would be out of business rather than just slow….

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