AMCs

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Top Ten Reasons Why It Is Great to be an Appraiser!

By Ann O'Rourke on January 20, 2023 / AMCs, appraisal business, forecast, humor, real estate market / Leave a comment

Tags: AMC, appraisal business, forecast, humor

Top Ten Reasons Why It Is Great to be an Appraiser!

10. Dazzle your friends with your knowledge of external obsolescence.

9. The wonderful world of rats, bats, and spiders.

8. Be a part of the profession blamed for the collapse of the savings and loan industry.

7. See places in people’s houses that usually require a search warrant to access.

6. Arouse the suspicion of an entire neighborhood when inspecting comparable sales.

5. Chance to really irritate annoying real estate salespeople.

4. Walk around holding a clipboard just like “Skip” down at the Jiffy Lube.

3. Spend hours writing volumes of supporting documentation to justify the market value of a property you already decided on when you pulled into the driveway.

2. See that some people really do hang those black velveteen pictures of Elvis on their living room walls.

1. Be one of a handful of people who know that USPAP is not a medical term.

Many thanks to reader Joe Ibach, MAI, for this great list! He doesn’t know the source…seems like it is one of those email/send/resends now floating around the Internet!

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Practical real estate appraisal writing tips for AMC questions

Practical Tips for Working With AMCs

By Ann O'Rourke on November 4, 2022 / adjustments, AMCs, liability, non-lender appraisals, ROVs / Leave a comment

Tags: adjustments, AMC, liability, non-lender, ROVs

Appraisers Share Their Best Tips for Working with AMCs

By McKissock

Excerpts: In a nutshell, our survey respondents recommended that you should:

1) do your research and get to know the AMCs,

2) build a relationship with them,

3) treat the relationship as a partnership, and

4) prioritize communication.

Build a relationship

“Be personable so they remember you.”

“Make yourself known by being efficient as well as timely with your reports. Be friendly—even when you feel like the UW’s question may be redundant or was already answered in the report. I promise you that this will make you known in your area.”

“Have a very responsive credo. Keep them up to date in every step of the report so that they can keep the Lender (and the Buyer/Seller/Realtor/Closing Attorneys when applicable) all in the loop on the progress of the report. Remember when they look good and trust you—you look good

Communicate, communicate, communicate!

“Update the orders quickly.”

“Keep them informed.”

“Over communicate!”

“Always communicate—even if it feels like too much. Our office updates AMCs on every scheduling attempt with details, every inspection appointment set and completion, and any materials needed ASAP in the assignment. They really appreciate it, and it ensures you can complete assignments on time as you had planned (no one likes waiting for a legal description only to have it show up on your day of 4 inspections!). It’s truly a win-win.”

“Stay in communication. Appraisers tend to get annoyed with constant emails from the AMC about inspection date, completion, report submission, etc. I make it a point to update them and answer their emails ASAP. In my opinion, that’s good business. And if you do need more time, more info, they are more willing to oblige.”

To read more, click here

My comments: Read this blog post with practical tips from practicing appraisers. It can help you get more business from AMCs (and other lender clients). Savvy appraisers I know who mostly do non-lender work also have a limited number of carefully vetted AMCs they work for, plus a few local lenders and “private” lenders.

Advertising Disclaimer: McKissock is one of my regular email advertisers. I keep my advertising clients and this newsletter’s content separate. But, McKissock’s blog posts are short, well written, and popular with readers, so I include them regularly.

LIA runs an informational ad at the top of each email newsletter. The ads regularly get the largest number of “hits,” indicating that readers like them. We all like free Liability advice!

Reconsideration of value and Appraisers

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What Causes Appraisal Revisions?

Appraisal Risk, Reviews, and Revisions

By Ann O'Rourke on October 14, 2022 / adjustments, AMCs, appraisal business, lender appraisals, non-lender appraisals, real estate market, Reviews / Leave a comment

Appraisal Risk, Reviews, and Revisions

By Ken Dicks

Excerpts: This is part three of a three part series on appraisal review – Read parts one and two. I am often posed with the following question “How do you know when you are looking at a “good” appraisal?” The reality is there is no universal acceptance of a single method of measurement to differentiate “good” from “bad.” After many years of reading appraisal reports, my response is “One that leaves the reader with few unanswered questions, allows the data to tell the story, keeps appraiser interventions to a minimum and is able to present a case for what a property is worth, as well as what it is not worth.”

Today, while there still remains some stickiness to the QC revision process, a recent survey completed by The STRATMOR Group commissioned by appraisal management technology company Reggora, indicates 25% of appraisal reports require some form of revision. While that number may seem high to some, in the context of lending and property complexities, that is a 54% improvement in performance cited earlier in this article (from 35% 10 years ago). Is there room for more improvement? Of course, there is always room for process improvement, but on the face of it, some process improvements appear to be yielding results.

Consistent application of both quality control and quality assurance processes for appraisal review may also be in part a reason for improvement, as appraisers have a better understanding of what is needed by their client. Additionally, the tools available to both appraisers and appraisal reviewers have undergone iterative process changes and users have advanced further up the learning curve. Lastly, many lenders have progressed beyond the initial risk identification stage, or the “gotcha stage” to a holistic and strategic approach that accepts risk into their business objectives. Today lenders and stakeholders have the ability to gain risk insight beyond the initial transaction stage and utilize pattern and trend identification.

To read more, click here

My comments: Links to Part 1 and 2 are in the first line of the post. View from the AMC/Lender side. Good that reviews and reconsideration requests have gone down. Appraisers and AMCs spend less time and have fewer hassles.

Lender and AMC revision requests

What to Do When Your Appraisal Is Under Review

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Working with difficult appraisal clients

Appraiser Pressure – What To Do?

By Ann O'Rourke on September 2, 2022 / ADUs, AMCs, real estate market / Leave a comment

Tags: ADUs, AMC, real estate market

How to Handle Appraisal Pressure and Stay Ethical?

Excerpts: There’s no simple and easy way to deal with appraisal pressure. A major source of frustration for appraisers is the realization that clients do not have to follow USPAP. The ethical and performance requirements of USPAP apply only to appraisers, not to clients. In other words, USPAP doesn’t prohibit a mortgage broker from calling and asking you to develop an appraisal based on a predetermined value, but USPAP does prohibit you from accepting that assignment.

When you are faced with appraisal pressure, here are some strategies to manage the situation and still maintain your reputation as an ethical, unbiased appraiser.

1. Educate your appraisal clients

A lot of what appraisers consider pressure from clients is merely a result of the client’s lack of knowledge about appraisal standards and ethics. A lender might ask an appraiser to guarantee values beforehand simply because he or she is unaware that it is unethical for an appraiser to do so.

Avoid this by explaining why you cannot guarantee a value or remove that deferred maintenance photo from your report. You might be surprised at your client’s response if you take the time to educate him or her.

For 8 more reasons, click here

My comments: Appraiser Pressure – What To Do? Can you learn to be an ethical appraiser (or person)? Do you try to be ethical in whatever you are doing? Does it depend on who trained you? Or, do you learn from your parents when growing up? A Very controversial topic!

The Good Appraiser (for anyone who wants their number) Always gives us what we need: – Unethical Appraiser. The Bad Appraiser: A deal killer – Ethical Appraiser.

I was trained at an assessor’s office with no pressure to appraise high or low, fail to disclose defects, etc. I was very lucky. Fee appraisers are under lots of pressure. You learn that people are always looking for a value. for example, when doing an appraisal for a divorce, I always say, “If neither spouse likes my value, it must be okay.” For new clients, I make it very clear that I will not be unethical by giving them what they want upfront. I have lost many clients over the years because I was ethical.

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Appraisal Obsolete? Now or in the Future?

AMC Mergers and Acquisition for Appraisers

By Ann O'Rourke on February 4, 2022 / AMCs, ANSI, appraisal business, appraisal management company, waivers / Leave a comment

Tags: AMC, ANSI, appraisal business, waivers

AMC Mergers and Acquisition – Someone has a positive view of residential lender appraising!

Nationwide Property & Appraisal Services purchased by investment firm Arcapita Group Holdings

Excerpts: The deal gives Arcapita an AMC that serves mortgage lenders in all 50 states, has a network of over 15,000 licensed appraisers, and grossed $144 million in revenue in 2021.

“We were attracted by Nationwide’s highly cash generative business, experienced management team, and strong base of clients across the country,” Arcapita CEO Atif Abdulmalik said in a statement. “Close to 50% of Nationwide’s customers have maintained their relationship with the company for over six years, highlighting the longevity of its customer relationships, and the company benefits from a free cash flow conversion rate of over 99%.”

The AMC has acquired five other companies since Corridor bought a stake in Nationwide in 2016. In June, Nationwide acquired Portland, Oregon-based First Choice Appraisal Management, expanding its reach into the Pacific Northwest.

Other large financial firms are also putting money into the appraisal management space, which is highly fractured.

In October, private holding group StoicLane acquired control of the appraisal management company Lender’s Valuation Services (LVS).

To read more, click here

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Class Valuation purchases Metro-West

Excerpt: In a press statement, Class Valuation said Metro-West, founded in 1987, is the largest independent residential appraisal firm in the country, with staff appraisers in over 80 U.S. metros.

Class Valuation, which itself is owned by private equity firm Gridiron Capital, said the acquisition of Metro-West would fit into its larger strategy of fusing tech tools such as automation and 3D measurements to help clear the well-documented capacity issues in appraisal.

“One area of focus for us has been the growth of a staff appraiser network and building out a nation-wide trainee program,” John Fraas, CEO of Class Valuation, said in a statement.

This is the fifth acquisition Class Valuation has made in the last 12 months, and the seventh in recent years. In September, Class Valuation acquired Kansas City, Missouri-based Pendo Management for an undisclosed sum.

There’s been a surge in private equity investment in the U.S. appraisal space over the last two years.

To read more, click here

My comments: The investors see money to be made in appraisals. What will they think when it inevitably crashes again, like it always does. I wish I had an AMC I could sell to investors ;>

If you work for any of these AMCs, keep close track of your billings, so they don’t get lost in any accounting mergers. No one knows, of course, if their appraisal management will change.

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2-16-17 Newz .Land surveys in 1784 .Common appraisal errors

How to Respond to a Reconsideration of Value for Appraisers

By Ann O'Rourke on November 19, 2021 / AMCs, appraisal, appraisal how to, FHA / Leave a comment

How to Respond to a Reconsideration of Value (ROV) Request

By McKissock

Excerpts: While the ROV process is an appeal process, it is not to be used for changing the value or altering other assignment results simply because someone is dissatisfied with the outcome. Similar to performing an appraisal assignment, your role as an appraiser is to respond impartially, objectively, and without bias to an ROV request.

When you receive a reconsideration of value request, there are proven ways to handle these requests, adhere to USPAP and applicable regulatory requirements, and preserve a rock-solid relationship with your client. Best practice is to respond in a professional manner, remain positive, respond accurately and timely, and always operate ethically.

Twelve tips for responding to an ROV request. Here are the first five:

1. Confidentiality

2. Pause before responding

3. Meet deadlines, if attainable

4. Take the ROV seriously

5. Start with a positive

To read about all the tips, click here

My comment: Comprehensive with good tips. Well written. Read this if you do ROVs.

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The First Appraisal – About 3,200 Years Ago

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Wholesale lender has AMC-free appraisals

By Ann O'Rourke on September 17, 2021 / AMCs, appraisal business, bifurcated appraisals, Fannie, real estate market / Leave a comment

Tags: appraisal business, bias, Fannie, real estate market

UWM launches AMC-free appraisal program to coordinate appraisals in-house

Excerpt: The Pontiac, Michigan-based wholesale lender will instead coordinate appraisals in-house, contracting with appraisers directly, offering appraisers and brokers a way to bypass AMCs altogether, which UWM CEO Mat Ishbia characterizes as “middlemen.”

During a Facebook Live address, Ishbia proclaimed that while AMCs add value to the industry, appraisals have been a stumbling block for the mortgage industry.

“It’s going to be cheaper for consumers and more money for appraisers because there’s no longer going to be a middleman with UWM Appraisal Direct,” Ishbia said.

To read more, click here

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Comments from Rob Chrisman’s daily email mortgage newsletter 9-13-21

Critics wonder if appraisers will sign up for UWM’s program, or any program for that matter, given the amount of business licensed appraisers have already. AMCs take about $125-150, maybe as much as $200. If a company like UWM offers $150 more than AMCs to take their orders, does it come with a price, such as an appraiser saying they won’t do business with other AMCs? Stay tuned!

To read lots more, click here Search for appraisals.

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Comments from AppraisedValue (Housing Wire) email with comments. No link available.

The larger question is whether UWM’s direct-to-appraiser approach will be attractive enough to keep appraisers too busy to work with AMCs and whether other lenders will follow suit. As our story notes: Likely the strongest incentive for appraisers is that UWM will pass along the full appraisal fee paid by the borrower. And, while AMCs have been dogged with allegations of late pay, UWM will pay appraisers the next business day after a successful appraisal completion.

Still, some AMCs, such as Class, have already instituted a process to pay appraisers within 24 hours. And some lenders don’t want the headache of bringing valuation in-house.

My comments: I like what UWM is doing, of course. As we all know, there are much more significant problems with AMCs than money, such as long lists of requirements, including everything from every lender they work for!

The Future of Residential Lender Appraisers

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What should appraisers look for in a sales contract?

By Ann O'Rourke on August 20, 2021 / AMCs, appraisal business, appraisal how to, lender appraisals, real estate market, waivers / Leave a comment

Tags: AMC, appraisal business, appraisal waivers, real estate market

What should appraisers look for in a sales contract?

By Steven W. Vehmeier

Excerpt: When should we analyze the contract?

Looking at the sales contract early on allows the appraiser to identify any “subject to” items or other conditions that could influence the value conclusion.

However, reviewing the contract early might also put the sales price in the back of the appraiser’s mind. And although it shouldn’t, it may unintentionally influence the appraiser’s comparable selection and eventually impact a direction in value.

Maybe looking at the sales contract only after developing the appraiser’s opinion of value would help avoid the above concern?

To read more, click here

My comment: Some interesting, and maybe controversial, ideas. Short and worth reading.

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Appraisal Business Tips including Marketing

Appraiser Client Relationships are Very Important

By Ann O'Rourke on July 16, 2021 / AMCs, appraisal business, bias, liability, real estate market / Leave a comment

Relationships… The Lost Art

Mark Skapinetz

Excerpts: Relationships. It’s a lost art of business when it comes to the appraiser profession…

From 2009 to about 2019, I was doing Lender appraisals, and deep down, something was missing. I would only be talking to customer service reps, people overseas that the AMCs subcontracted out to review work, and I had no one to go to with my issues and ideas. I know nothing about these people, and they don’t know anything about me.

Building this referral or relationship business wasn’t going to be easy, and it most certainly wouldn’t include any lenders that used AMCs for their ordering process. I needed to look elsewhere for this to happen. Where did I go? I went to the Realtor Facebook groups, Investor groups, and recently, I went to the new platform called clubhouse.

To read more, click here

My comments: I started my business in 1986 and mostly worked for lenders, but also worked for a wide variety of other clients: relocation companies, attorneys, private sales, estates, title companies, etc.

I quit doing residential lender appraising in 2005, before the crash. I had personal relationships with all my local and non-local, lender clients. Very few revision requests (wrong address, missing value, etc.) and no competitive bidding, etc.

Most of my referrals have been from local real estate agents or my website. I went on our weekly broker open house tours almost every week since 1990 and was active in the local association of Realtors.

I have been writing about non-lender appraisals since I started my paid newsletter in 1992 and have spoken to appraisers all over the U.S. and Canada about appraisal marketing.

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