Today we got an email from a client contact that read:
From: ############
Date: November 17, 2005
To: XXXX@millersamuel.com>
Subject: RE: Status
why does it take your office 1- 1 1/2 weeks to write up a report!?
This email was sent by an appraisal management company, who took over a long standing account that handles high end properties. They have been mandated to use our firm. Of course, you have to remember that we provide our service in a market where 80% of the housing stock is not a matter of public record, and we have no MLS system. To my knowlege this AMC does not review quality (or at least substantively) and simply track their vendors by turn times.
Its an ongoing battle with this client and eventually, the original bank’s loyalty, which has protected us from the AMC’s pressure, will fade as time passes since the original client doesn’t interact with us directly anymore.
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Appraisers need to be careful what they wish for. Many thought licensing would weed out the less qualified. The opposite proved true and it gave legitamacy to those who do not deserve it. More recently, appraisers have complained about “lender pressure” …..with good reason. In response to the concern (by regulators – not lenders) over lender pressure, many see AMCs as the answer. Now appraiser are in the position of being judged by #1 do you have a pulse, #2 are you licensed, #3 can you fill out a form in less than 5 days, #4 are you the low bidder. All else (e.g. competence and quality) is an afterthought.
Perhaps the current market will weed out those appraisal firms, as in 1990’s, who are “hitting the numbers” and writing reports quickly without doing due diligence. I used to wonder how some appraiser’s were able to do their reports so quickly until I discovered they were using “look alike” comparable photos to save driving time (common when appraising one family and multi-family properties), using similar coop and condo building photos when they didn’t have the correct ones, again to save time, (less common today due to having building photos on file – unless you have the wrong season) and using old cooperative comparables and changing the sale date so as not to exceed the six month guideline. Not only do appraiser’s have to be monitored but so do the lending institutions, AMC’s, mortgage brokers ect. who insist on a ridiculous turnaround times and do not do regular field reviews of the reports from each firm they utilize. Unfortunately, this is not going to happen on a grand scale.