Survey finds appraiser inexperience populates the marketplace
A recently conducted survey of more than 5,000 licensed appraisers across the country contradicts lenders’ and independent appraisers’ claims that appraisal management companies (AMCs) are employing inexperienced appraisers and are significantly underpaying appraisers. The survey, which was conducted by Maryland-based AMC Coester Appraisal Group, revealed that only three percent of appraiser respondents have less than five years of experience, and more than half have been in the business for 15 years or more.
Additionally, almost two thirds of appraisers earn $250 to $350 per appraisals assigned through an appraisal management company—fees that are well above the rumored $180 to $220 fees that appraisal management companies are believed to pay appraisers, according to Brian Coester, chief executive officer of Coester Appraisal Group. When working on their own as independent appraisers, almost 40 percent earn $250-$350 per appraisal.
The use of AMCs surged when the Home Valuation Code of Conduct (HVCC) went into effect in May 2009. Since then, numerous lenders and independent appraisers have been accusing appraisal management companies of taking an unfair percentage of appraisal fees while also producing lower quality appraisals—supposedly completed by grossly inexperienced appraisers—at higher prices than their independent counterparts.
“Quite a few negative misconceptions about AMCs have been getting a lot of media coverage, which is fueling undue distress among lenders and appraisers,” said Coester. “As an AMC, we knew those claims were unfounded, but just to be absolutely sure appraisers felt the same way, we set up a survey to get their feedback first-hand.”
The survey, which was completed in August 2010, tracks the responses of 5,384 licensed appraisers throughout the U.S. The study revealed that over half (52.4 percent) of respondents feel that an ideal fee of $350 to $400 would allow for the highest quality of work on a conventional appraisal, and 45.3 percent said that $400 to $450 would allow for high-quality Federal Housing Administration (FHA) appraisals. Nearly 78 percent of respondents stated that the typical fees they were receiving were enough for them to do their highest quality of work, more than 82 percent feel that AMCs should keep a percentage of 15 percent or less, and almost 17 percent felt that AMCs were entitled to 15 to 30 percent.
For more information, visit www.CoesterAppraisals.com.
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