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Mortgage Broker News | 26 Mar 2018, 10:34 PM Agree 0
Appraisal management companies have been accused of exerting downward pressure on appraisers' fees, causing many to either abandon the profession or avoid it altogether. In a moment of self-awareness, NAS concedes it bears some responsibility
  • AK | 27 Mar 2018, 09:15 AM Agree 0
    I would like to see a $300-$400 fee be approved through this system. To say that we make six figures and don't have to work that hard to get that work is pure untruth. Instead, ask how much we many files we have to complete to maintain that "six figure" income?
  • Toronto Appraiser | 27 Mar 2018, 09:16 AM Agree 1
    In 1988 Fees were 175 which the appraisal company received. Now, through AMC's an appraiser can earn anywhere from 90 to 200 per deal. Factoring in inflation, and reduced fees, an appraiser would need to do 3 times the volume of 1988 with an AMC, and with extra work under new requirements, it does not make sense. Why are AMC's and the Lender(s) taking 50% of the fees? Why don't they take those fees from their profits? Where is the logic? The broker makes on average 1% of the mortgage, and with the average mortgage 500,000 that means the broker makes 5,000. A realtor will make 10,000 to 20,000 per deal, yet the appraiser is expected to make 100 to 200 for a professional opinion? It's time for appraisers to start a Union and increase appraisal fees.
  • Jilted Broker | 27 Mar 2018, 11:17 AM Agree 0
    I still don't understood the need for these appraisal Mgmt Companies in the first place? They are no more efficient (perhaps even less so) when it comes to having to deal with some of the more unusual situations that occur as they are the middle man who relays info. We used to call our local appraiser (who was on the Lenders list, and whom we both learned to trust) and simply spoke to, or emailed the contact info and details of what needed to be done and the appraisal was scheduled. No fuss and no problems.

    That being said, the other white elephant in the room that no one has talked about are the damage those automated appraisals have done. For years, lenders essentially eliminated cookie cutter appraisals (the gravy) from the appraisers workload by accepting the nearly free automated appraisals. This left appraisers with the harder time consuming appraisals that we resent having to pay extra for. You know the ones... The so called 'executive' subdivision home, or 'rural' homes that have a limited number of recent sales where they have to be researched to determine a value.

    Don't get me started!
  • | 27 Mar 2018, 11:19 AM Agree 0
    Why even have appraisal management companies? They are another level of unnecessary bureaucracy because the banks think that all appraisers and all mortgage brokers/agents are conspiring to inflate property values. In over 90% of the appraisals I have ordered through the management companies, there has been a screw-up or a mistake & the quality of the appraisal is subject. When dealing with the appraiser directly, I have few problems and if necessary, an intelligent discussion. Sorry, but 99.9% of mortgage brokers/agents and appraisers are professionals who are ethical...probably more ethical than the banks. Get rid of the management firms and you will find applicants coming into the profession.
    • S Johnson | 27 Mar 2018, 01:17 PM Agree 0
      I couldn't agree more
    • S Johnson | 27 Mar 2018, 01:17 PM Agree 0
      I couldn't agree more
  • Mike | 27 Mar 2018, 11:42 AM Agree 1
    Appraisers salaries are the lowest. I remember the cost of an appraisal 20 years ago was $165, and it stayed that way for years. maybe decades. The cost of an appraisal hasn't come close to keeping up with inflation.
  • Toronto Appraiser | 27 Mar 2018, 11:44 AM Agree 0
    At $300 per appraisal to make a 6 figure income we have to do 333 appraisals, and we get to sleep at night. At $200 per appraisal we have to do 500 appraisals and then we work 18 hour days - do the AMC's and lenders realize how many hours go into another 167 appraisals? Operating costs, insurance, etc. have gone up drastically in the past 10 years, while the appraisers profit margin has decreased drastically and the AMC's have become millionaires!! Appraisers are the only profession whose fees have decreased and not kept up with the cost of inflation; appraisers have not had a raise in 10 years, our fees are totally controlled by the AMC's. Lenders pay the AMC's $300 per standard appraisal, why are the AMC's taking a 33% finders fee? Yes, it is time for all appraiser's across Canada to have a pay increase!!!! How about it AMC's will you pay us what we are worth after all we are professionals.
    • Barrie Appraiser | 04 Apr 2018, 03:47 PM Agree 0
      I am standing clapping for this Appraiser! No one wants to say or admit that we have allowed ourselves into being bullied to lower our fees for fear of losing our jobs but his is the full truth my fellow Professional Appraisers.
    • | 06 Apr 2018, 12:41 PM Agree 0
      Excellent Post. Unless ALL appraisers can together and just stop working for a while and negotiate our way either out of the AMC model or for higher fees, it's going to be a very tough grind.
  • More Whining. | 27 Mar 2018, 12:27 PM Agree 1

    Eighteen years ago (pre AMC) I was told not to get into residential appraisal because it was a dying industry. It hasn't died but it has evolved.

    The old retiring appraisers were a bunch of greedy shysters that paid 40-50% of the invoice to their candidates and E-60% to the CRA's and still made them pay expenses... But at least most of them were willing to train people because it was profitable for them to do so.

    One reason the AMC's got in so strong was that a CRA could work for an AMC for $200 (now $170 or less) or work for Joe B. for a split of $275.. With most of the bank lists practically closed off or basically are "whoever AMC assigns to" there is little work to be had without going through the AMC's anymore.

    I don't know anyone who wants to take on candidates anymore because its too much hassle to train; and to have enough work to feed them they have to accept $170 AMC work and pay a split out of that.
    The companies that are taking them on are often doing lackluster if any training and throwing the candidates on the street to do upwards of 5 per day while designated appraisers who refuse to bend on fees are sitting home doing 4-5 a week.

    If the AMC's distributed the work to anyone other than the companies they make the most money off of there would be no shortage of appraisers.
  • Mike Ogilve | 27 Mar 2018, 02:03 PM Agree 0
    Great work by NAS to inform the community of how to bring new appraisers into this career.
  • CRA | 27 Mar 2018, 05:15 PM Agree 0
  • Veronica Love-Alexander | 27 Mar 2018, 07:43 PM Agree 0

    I am feeling positive about the all of efforts NAS is making to strengthened this side of the business. I think NAS is taking great steps to provide service support - especially in market areas greatly in need of more choice and faster turn-around times. Kudos to the NAS team for their efforts!

    And thank you for taking time to help share these changes you are making with mortgage professionals on this forum. It is always valuable to educate and create more awareness and understanding for our industry. That truly is appreciated. Better that we fully support each other and understand each other's obstacles so we can better education and support Canadians who need our support in their largest investment - their home.

    • Appraiser - working all the time | 28 Mar 2018, 01:50 PM Agree 1
      Yes, NAS is doing a great job for the lenders - what about the poor appraiser?
    • Seen it all. | 29 Mar 2018, 05:00 PM Agree 0
      Veronica, your positive spin on this appears so diplomatic as to sound contrived. You're a leader in your field and I get the sentiment but it rings hollow for most in this commoditized appraisal profession. NAS's comments are a start but actions speak louder than words and their profitability will always be their first priority. We'll see. Have a great day.
  • Old Timer | 28 Mar 2018, 01:24 PM Agree 0
    At last an AMC has finally admitted the truth, they are and have been for years, "eating into the pockets of appraisers." Lender's want AMC's, they should pay for that service, not appraisers. AMC's have become corporate giants off the back of appraisers.

    Mr. Schultz you are wrong, most appraisers do not earn six figures, especially candidates. Yes, a good appraiser can "bill" six figures, but do you have any idea the costs an appraiser incurs in order to produce "billing" in the six figure range and the hours it takes to do so. You are misleading the public. And, by the way, the old-timer guys do take on candidates, however, after a year or two in the industry they quit. Why? Because they can't make a decent living and they do not want to work 60-70 hours a week!

    The main reason why AMC's have a shortage of appraisers is because in 10 years we have not had a fee increase! Who wants to work in that type of an industry? Good appraisers are not doing AMC work because private work pays more and we do not get harassed. Yes, we can quote on difficult AMC jobs, but, do we get our fee, no, the AMC just goes to the cheapest appraiser so they can increase their profits.

    You want more appraisers - stop using the cheapest appraisers and pay us what we are worth. Stop eroding our industry and there will be plenty of appraisers.
  • Seen it all | 29 Mar 2018, 10:31 AM Agree 0
    I can't believe that an AMC actually admitted that they are part of the problem. This is an unsustainable model and was bound to happen.
    I'm all for change and efficiencies but also believe that there are more than enough appraisers to handle the load most of the time (in the GTA)......but for the right price. The perceived shortages can happen during very active periods but for the most part if you are priced slightly higher than most, you will hear crickets because that larger firms will handle what's available with each appraiser completing as many as 5 or 6 reports a day (I've been told this by the actual appraisers several times - and I have no idea how that is possible). If the low fee "super suppliers" cannot handle the volume they will fight tooth and nail to source someone who can at the same low price. In the automated quote systems that some of the AMC's have, I've been told that price is the ONLY criteria. The entire existence of the AMC model is predicated on the commoditization of our profession to make a profit (for themselves) while cutting costs for the lender. Prioritize price then turnaround time. The appraiser must make due. Sure there are some benefits but only if you'd rather not drum up business and invoice work on your own. If there was such a shortage of appraisers I don't think there would be such downward pressure of price - we are at or below what we were getting 2 decades ago (3 decades ago if you count the period just before the 1990 downturn). And who will the lenders go after if they loose money?, THE APPRAISER. There may have been a shortage during the insanity of the first half of 2016 and 2017 but I would say that most of the time that's not the case. The Institute can't do much about it so they urge the CRA's to diversity our client/work....fair enough. Some are finding employment with the banks, in part helping create new Terms of Reference for lenders that add an even greater workload to the appraisal assignment....for the same price. Some are working for the AMC's themselves. If you can't beat them, join them.
  • Spinning Wheels | 03 Apr 2018, 08:35 PM Agree 0
    "Schulz claims that, even with diminished fees, appraisers can make upwards of six figures because, through organizations like NAS, they have access to greater volume". Complete Bunk!
    I remember being told this by what was then FBC (now Brookfield) in 2001 when I was offered a contract for under $90 per report.
    I hope Mr. Schulz finds out that after 10, 15, 20 years of hard work and dedication that he's been asked to reduce his imcome to 1990 levels while having his workload doubled because that is exactly what has happened to the appraisal profession. Promoting the profession and helping to recruit? Give me a break. Create a sustainable environment where the product comes first or get out the business.
  • Calgary Appraiser | 09 Apr 2018, 11:59 AM Agree 0
    I would agree with the sentiments expressed by the appraisers here. One thing I do not see discussed is work quality. Quality work requires time. The appraisal process is complex. Attempting to complete 5 appraisals a day??? HMMM. Something has to give. Users of appraisal reports should focus on the quality of appraisals. After all, they are relying on them. First question I am always asked...How much does it cost? Wrong question.
    • Spinning Wheels | 09 Apr 2018, 05:22 PM Agree 0
      Exactly Calgary Appraiser. The AMC and Bank profit model does not address quality, only that the Terms of Reference are adhered to. But I suppose if one has gotten stuck in this system where the next guy is doing them for less and less (particularly when volumes are down) and it's a decision between making a living or starving, then there will be appraisers that "pump" them out. In mitigating their risk through all this, I suspect that our insurance coverage helps lending institutions ignore what is happening to our profession.
  • Ontario Appraiser | 22 Sep 2018, 01:55 PM Agree 0
    Its time for the bank to realize that the appraisal reports that they are paying for are not worth the paper their written on. Haven seen some of these appraisals it is obvious that there are "sweat shops" that bang out a majority of the appraisals. They cut corners and quality suffers. I've heard of firms that have "inspectors" that go out to see the property while a data entry person is doing the research and typing the report. The "inspector" is really just a glorified photographer. In some cases the person doing the inspection is not even an appraiser or member of any association. Does the lender know that these people are entering their client's homes?
    As far as the fee goes, these firms work on low fees and high volume. The "super suppliers" are getting $90 to $115 per report and the report is expected to be completed within hours. No time for sitting in traffic, No money to pay for your gas, car insurance, liability insurance, continuing education requirements, License fees, MLS access, internet access, cell phone etc. Don't get me started on "Public Records" The appraiser has no time to "measure" the house anymore and therefore are relying on MPAC for the floor area. One of the AMC's has a monopoly over this information and is colluding with MPAC, charging $2.50 per floor area which is supposed to be "Public Records". So now the $90 appraisal is only $80 because you have to pay for the floor area for your subject property and 3 sales. (4 x 2.50 = $10). Appraisers in other Provinces have access to all this information and more, for free. What is wrong with Ontario?
    I work harder now than I did 20 years ago and make half of what I made before. My expenses have gone up and my volume has gone down because I can't lower my fee and still keep a roof over my head. Any time I talk to an AMC they tell me the only way to get more work is to lower my fee.
    I have trained several appraisers who left me as soon as they got their designation and went to the same AMC's and undercut my fee and now they get the work instead of me. I have no interest now in training any new appraisers. I pay extra to have a designation that allows me to supervise a candidate appraiser and you get no thanks for it. Only more competition.
    I am one of those appraisers who are in the 58 or older category. I hope to retire soon and get out of this business once and for all. I'm tired of working with a bunch of crooks. I do not recommend any young person to get into this "profession" for lack of a better word. It used to be a profession but now it's just a really hard job with low pay. Here's the problem;
    Let say a new Candidate finds someone to train them. The supervisor takes 40% of the $90 fee. The supervisor makes $36 to review and co-sign the report and take on the liability. Now the appraiser is making $54. Hypothetically, let say it takes 1 hour to inspect the property (including driving time), One hour to do research and one hour to type the report. The candidate is now making $18 per hour. But out of that has to pay for gas, car maintenance, insurance, membership, education, cellphone, internet. Minimum wage is $14 plus benefits for a Walmart Greeter or Tim Hortons. That leaves $4 per report to pay for all of your expenses. No benefits.
    Then sit back and listen to the banks yearly profits and how well the AMC's are doing.
    Dying Profession? I wonder why.
  • Chantelle | 09 Oct 2018, 03:13 PM Agree 0
    Exactly, working twice as many hours to try to make the same money isnt easy. Especially with the time pressure they demand.
  • Standup and fight. | 27 Nov 2018, 11:41 PM Agree 0
    Setting up a group of appraisers to work out an alternative solution to the amc problem. Would anyone like till join in? It’s time we work together instead of against each other.
  • Alberta Appraiser | 09 Jan 2019, 03:02 PM Agree 0
    AMCs reduce fees and reduce timelines which equals much lower quality appraisals. Lower quality appraisals means more lawsuits and higher insurance costs. So costs go up and fees go down. Nobody wants to be an appraiser? You don't say?
  • jen | 13 Jan 2019, 09:38 PM Agree 0
    I agree with the previous posts entirely - with respect to obtaining the designation, finding work and making a dollar! I am obviously looking elsewhere as the membership to make a living costs a bomb and the list of costs go on and on. The ability to do work has plumetted now with new mortgage rules etc and it is not an easy job anymore - I very much like the job itself but I am finding the booms and busts of the business tedious and the rewards lower - stability is waning in this profession and I cannot stand that the banks make anything on the appraisal itself - not shocking though.
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