What Mr. Jarnagin does not understand is that the appraisers are working for dramatically reduced fees. When the AMC charges $400-$500 and only pays the appraiser $200 - $300, the appraiser can not make a reasonable profit to stay in business. As an appraiser of 47 years and owner of a small business, todays overhead is astromical. What expenses have gone down in the past 5 years? None. All of the following that are overhead and operating expenses of the independent fee appraiser: rent, salaries of office personell, automobile, professional dues, professional libility insurance, health and disability insurance, database subscriptions, etc. but yet the fee to the independent appraiser has been cut by 40%. Last year my hard costs for compentently completing an appraisal report was $172. At $400 this leaves me profit of $228 before taxes or $50.66 per hour. Now by working for an AMC for $200 to $300 my wage has been cut to $6.22 to $28.44 per hour. Thats why the inexperienced or lazy appraisers will not do the work to produce a creditable report. Fannie Mae just lost $25,000 on one of their owned properties because the appraiser came in $25,000 low in spite of 12 offers to purchase at the listed price. Beam me up Scotty.
As an appraiser of 47 years with an SRA designation, I must take issue with Mr. Garber. I hope he is referred to Appraisal Institute members with respect to his comment. Designated appraisers are not the problem. It's the non-professional appraisal that doesn't know what he/she is doing. Many have been appraisers for less than 5 years and have never seen a market like this. The appraisals I have been reviewing on "low balls" make me sick. The main problem is inadequate market research and painting the neighborhood with a "broad brush" by using general data instead of data specific to that neighborhood. Other errors include mis-measurment of the property's size, "blanket" market conditions adjustments, lack of analysis of price trends, supply/ demand and exposure times. Most of the appraisals I have reviewed would not pass as a BPO, but that's another story.
As an appraiser of 48 years, I am appalled by the HVCC and the "shoddy" work and values that it is producing. Many of us, will be driven from the profession. Why? Its a matter of MONEY. The typical appraiser BHVCC (before HVCC) would charge $350 to $400 for a complete, creditable appraisal. Now that the AMC's have their hand in the "cookie jar", the appraisers fee has been cut to $175 to $250 (mostly $200). By the way the big AMC's are owned by the banks and/or title companies. The order is sent to all appraisers on their list and the first one that accepts, gets the job, regardless of his geographical competency. Also many AMC's requre appraisals to be completed in 5 (calendar) days so if you get the order on Friday, its due by Tuesday and/or 24 hours after your inspection, regardless if you have all of your data available and confirmed. The appraisers that are accepting this work are "newbies" and have never been through a market recovery in thier lives and they still are making market adjustments at 2-3% per month, hence the "low ball" appraisals. Talk about client pressure, now its coming from AMC's and they don't give a rip about values, its all about MONEY and turnaround times. PS: To the previous poster: these are not excuses, they are facts. You try doing your job accurately and with integrity when you have operate under this kind of pressure for half of what you were making..... How much do you want to bet that Cuomo has his finger in the AMC pie?