If you were buying a house, how would you feel if the appraisal was ordered as below? Or if you are a real estate agent or loan officer, and your deals are hinging on quality appraisals, how does this strike you?
I received an email with the text below just a few days ago. I don’t personally do business with these types of companies, but I guarantee someone did accept this assignment.
My name is XXXXXXX with XXXXXXXXXXX. I have a 1004 Conventional order in Auburn, CA. It has a fee of $200. Please let me know if you are interested.
What’s wrong with this message? Several things: 1) The fee is too low and not customary to typical market rates for a real estate appraisal, especially in Auburn; 2) This email was likely blasted to a high volume of appraisers, and orders like this typically go to whoever responds the fastest. Is that really a good methodology? Instead of picking the most qualified appraiser for the job, it selects whoever happens to be available to work for cheap; and 3) The management company ordering the appraisal likely charged the bank easily $400+ for the appraisal. That doesn’t seem very fair to the borrower or the appraiser.
Thankfully not all appraisal management companies (AMCs) operate like this, but unfortunately there are many that do. When I do appraisals for loans, I only work for good AMCs that respect my time, work and pay me decently. If you are in a position to order appraisals or you use an AMC, what is the process like for engaging appraisers for business? Is it like what I explained above? Different?
Please know that I’m not ranting or asking for pity for the real estate industry (like anyone would give some anyway). That’s not it at all. I just want to provide some insight and context into the happenings of the appraisal ordering process because over the long haul this is not going to be helpful to consumers or the real estate industry.
What do you think?
Questions: Any thoughts or stories to share? What is #11?