Appraisers and AMCs: Mixed Results
According to our readers, most appraisers continue to revile appraiser management companies (AMCs). There are a couple of reasons they give; stingy fees, unrealistic turn times and a lack of competence on the part of AMC staff. Most say AMC work goes to the lowest (and quickest) bidder and this is causing a decline in appraisal quality; the “best” appraisers are fleeing the profession in search of a living wage. Some predict a “double dip” recession as a result of the damage HVCC is causing to the real estate market.
One appraiser put it this way, “We have simply exchanged one ethical dilemma for a different one but each is founded on the same incentives… money and survival. Those appraisers who inflated values did so to make more money (or just survive). In the AMC environment, those appraisers who can crank out quick-n-slick reports do so to make more money (or just survive). Those who still provide a $350 report for $200 have to work harder to provide for their families. There is at least one distinction between the old and new dilemma. In the pre-HVCC environment, I could choose not to work with brokers who demanded comp checks and predetermined values. While there are exceptions to every rule, the bulk of residential work is now flowing through AMCs and most of us depend on the AMC for at least some of our income.”
Anecdotal evidence, such as our Diary of a Happy Appraiser story and data from our HVCC Appraiser Talkback Survey, reveal a mixed picture. Many appraisers are working with certain AMCs successfully.
Consider these results: to the survey question: “Do you work with appraisal management companies (AMCs)?”; always nine percent, often 33 percent, sometimes 46 percent, never 12 percent. To the question: “Overall, are you satisfied with the AMCs you do work with?”; always three percent; often 19 percent; sometimes 50 percent; never 28 percent.
One way to interpret the results is that 88 percent of those surveyed work with AMCs at least some of the time (12 percent say never) and that 72 percent of those who work with AMCs are satisfied at least some of the time (28 percent say never satisfied). Appraisers are “AMC shopping” and some predict that, eventually, AMCs will be compelled to improve their practices to attract the best appraisers.
The mixed messages regarding AMCs may be the result of something quite simple: the appraisers who are somewhat content or even happy are hooked up with AMCs that treat them okay- limited pressure for value and turn time, fair fees, etc. The others, perhaps, haven’t found the AMCs worth working for or if they have, they can’t get any work. We hear this a lot.
And of course, some of the vitriol directed at AMCs comes from appraisers who can’t get past the fact that HVCC, a private agreement and not the product of a legislative process, has been allowed to turn their businesses, their lives and free enterprise on their heads.
Lender Pressure Lives On
There is anecdotal evidence that HVCC has ameliorated lender pressure, the problem it was intended to solve. But according to our survey, it hasn’t fixed it. As you will read in our cover story, our survey reports that over 50 percent of appraisers who work with AMCs continue to report pressure to make a deal work. Many appraisers, devastated by HVCC, wonder if there is a better way.
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