Appraisal House Blog

“What is the price per square foot?” In my job as a residential real estate appraiser, I hear this repeated almost daily. Other variations include “my neighbor sold for $ (x) per square foot”, or “the average in my neighborhood is $(x) per square foot”. Almost always, these comments and questions come from people who are unhappy with the valuation of their home. Unfortunately, the price per square foot method is very rarely a reasonable indication of the true market value of a property.

Let’s look at the basics: The price/sf is determined by dividing the sale price by the number of square feet of living space (also known as the GLA, or Gross Living Area, which is the attached air-conditioned space of the house). So a 2,000sf house that sells for $200,000 has a price/sf of $100. So does this mean that all houses in the area should sell for this multiplier? Of course not, because there are many variables to consider beyond the total square footage. If one house is on a larger lot, it should be worth more. If one house has a pool, it should be worth more. If one is substantially newer or is of superior original construction, it should be worth more.

An appraisal, at its root, is simply the methodology used to determine the value of the sum of the parts based on what “the market” (buyers) are willing to pay for those parts. So for every feature of your property, imagine that the exact same house sits right next door. It was built the same day, using the same materials, by the same builder, on the same size lot, with the same views, is the same floor plan, has the same number of bedrooms and baths, the same floor coverings, cabinets, appliances, garage spaces, etc. The only difference is (for example) that yours has a fireplace and the other one does not. It is our job to determine how much value the market gives to that fireplace. Or perhaps the differing feature is a 3^rd garage space, a covered patio, an extra bathroom, etc. The point is, your house may be very similar to other recent sales, or it may be vastly different. The more unique your home, the less valuable neighborhood price/sf statistics are.

Many people in the industry will say that the price/sf is not supposed to exactly zero in on your home’s value, but it can be used to give you a pretty good “ballpark” idea. I disagree. To prove my point, I analyzed the last 30 appraisals my company performed and calculated the low and high range of price/sf for each comparable sale used, the average price/sf, and the differential from the actual price/sf of the subject property. The results show that only 66% of the properties were within 10% of the average price/sf of the comparable sales. So as a home seller, would you be comfortable using that method, knowing that you had only a 66% chance of being within 10% of the market price of your home?

A wide variety of factors influence the value of your home besides the actual size. Do you have a better view than other recent sales? In some neighborhoods one-story homes sell for more than similarly-sized 2-story homes. If your home has only 2 bedrooms, it will not likely sell for as much as a similarly-sized 3-bedroom home. Do you have a large covered patio? A 3-car garage when most have only 2? Do you have a pool? Is your landscaping significantly better or worse than most of your neighbors? Is your house on a busy street while other recent sales are on quiet culdesac lots with little traffic? As you can see, there are a wide variety of factors that influence the value of your home.

When is it a useful indicator? If can be a reasonable indicator when you have a home that is very similar to every other house in the neighborhood. If your subdivision was built by one or two tract home builders over a short period of time, with few options or upgrades available, then it is likely that your home’s value is in line with other recent sales in the area. If most of your neighbors have 2-story homes with 1-side brick veneer, 4 bedrooms and 2 & ½ baths, carpet in the living room and bedrooms and sheet vinyl flooring in the kitchen and baths, the same size lot, and are pretty similar in size and age, then it is probable that you are pretty close to them in terms of price/sf.

However, if you are in an area where the sizes, ages, levels of original construction quality, or levels of updating and condition vary greatly, I would highly recommend getting a formal appraisal done, or at least get a detailed CMA (competitive market analysis) from a trusted and knowledgeable Realtor.

I was perusing the June issue of Money magazine when I came across a short article entitled "The Benefits of a Beautiful Outdoors".  The gist of it was that good landscaping adds about 10% to a homes value according to a Michigan State study.  Normally I would have just laughed at that and moved on, but several days earlier I was reading a blog post on Activerain where a realtor had asked a similar question, that she had heard that 10-15% statistic (although from a different source).  So now I'm going to have to post something to make sure everyone understands that 10% is NOT a good figure to be telling homeowners.

First of all, lets use some common sense here.  If you are selling a $500,000 home with typical landscaping (typical for the neighborhood), and your next door neighbor has the exact same house, exact same finish, etc., but has really done some nice landscaping, do you really think he is going to get $550,000 for it?  Very doubtful.  In most neighborhoods the differences are relatively minor.  The only way I can see that large of a difference occurring is if your yard is a weed-invested, dead grass, no shrubs or trees, dusty mess with a bunch of wrecked cars on blocks in it -- very inferior to the "average" home in the neighborhood.  And the neighbors house would have to be substantially above average.  Maybe in an ultra-premium neighborhood where everyone has their own gardeners, but for the 99% of the homes out there, not so much.

The problem with extensive landscaping is the upkeep.  I've done appraisals on homes where the homeowners insisted on giving me a map of the plants and shrubs along with a history of the design and implementation of the landscaping.  These people are pretty much professional gardeners, and they enjoy spending 10 hours a week pruning and maintaining -- it's their hobby.  MOST BUYERS DO NOT WANT THAT COMMITTMENT.  So the fact that you spent $25,000 in landscaping your $150,000 home, while a testament to your love of horticulture, doesn't mean that you will get that much additional value out of it.  For most typical subdivisions, I doubt it would get you more than maybe an additional $5,000 in value.  Sorry, but that's what the market tends to show.

Now, about that study.  I found the synopsis of it here.  In a nutshell, they took a picture of a house, then computer-enhanced the yard in multiple designs to show a variety of options; large shrubs, small shrubs, intricate designs, standard designs, etc.  They then surveyed people at home and garden shows across the country and asked them how much more they would pay for the different versions than from the base house. 

To me that is a pretty flawed methodology.  You're asking random passerby for a definitive number concerning a property that is not in their market, that they have no familiarity with, and that they have no particular attachment to -- no "skin in the game".  I think most realtors would agree that if you picked up a random person and drove them through a neighborhood and asked them how much they would pay for some of the houses, the difference between that and someone who actually wanted to buy in that neighborhood would be substantially different.  Similarly, asking an interested buyer standing in front of two duplicate homes, one with superior landscaping, would likely not get you an offer with a 10% premium. 

So in summary, DO NOT tell sellers to spruce up their yard in order to add 10% to it.  As most realtors know, you want to be similar to or SLIGHTLY above average to get top dollar.  As long as the landscaping is similar to the neighborhood, there is no need to add to it other than some flowers for curb appeal - the "petunia factor".  If you enjoy gardening and love to work in the yard, by all means go ahead, just understand that like a pool you will not get a high percentage of your money back out of it, so do it for the enjoyment.  

Dear Andrew,

Now that we are a week into May, I wanted to personally thank you for your efforts in regard to creating the Home Valuation Code of Conduct (affectionately known as the HVCC, or "Half-assed Values at the Cheapest Cost" to those of us in the appraisal industry). 

But seriously, I applaud your efforts in allowing Fannie and Freddie to get out testifying in the Washington Mutual/eAppraiserIt lawsuit.  I mean, what would that have accomplished anyway?  Actually proving that the lenders who were pumping our financial system full of suspect loans were well aware of what they were doing?  If you had actually prosecuted that case, it might have caused a major financial meltdown that could have collapsed Fannie and Freddie.  Good thing you just let them make a deal.  Can you imagine if that had really happened? 

Anyway, that whole thing with WaMu and eAppraiseIt was silly anyway.  I mean, it was only in your lap because the LENDER was pressuring the MANAGEMENT COMPANY (who was of course pressuring their contract APPRAISERS).  And of course the best possible solution was to develop this HVCC, which solves that whole problem by having the LENDERS order directly from the MANAGEMENT COMPANY!

Wait a minute, that doesn't sound right, does it?  If I'm getting this right, the HVCC, which was set up in response to a lawsuit alleging pressure from a lender to a management company, now essentially forces lenders to order from management companies.  Well, at least we know that if the lenders aren't allowed to pressure the appraisers any more, the appraisals will be more accurate since the appraisers can now focus on doing the job correctly without having to worry about all that "pressure".

Whats that?  The AMC's only hand out assignments to the appraisers willing to work the cheapest and fastest?  Well, that can't be right either.  Wouldn't that be an inverse relationship?  Maybe I've got this wrong, but I've always told clients that they can get it fast, cheap, and accurate -- pick any two.  All three is impossible unless your goal is to be broke and exhausted. 

Okay, so maybe you didn't get it all right, but at least you made sure to separate the relationships, so that large lending institutions can no longer own these appraisal management companies.  I mean, appraisers have to be impartial, right?  Those AMC's can't have Big Brother threatening to take away their sales meetings in Vegas and Christmas bonuses because of trivial concepts like "accuracy" and "impartiality".   But what am I worried about, that would never happen, right?  I mean, how stupid would some manager have to be to walk down the hall and say "hey, lighten up on those appraisals, we need to meet our numbers this month!"  I can see the sign on the wall of the AMC telemarketing department:  "The heck with our Wall Street numbers, our goal is accuracy!"

What?  Oh, you're saying that is okay for lenders to own AMC's, as long as they have "controls" in place to make sure nothing funny happens.  Well, I guess that is okay, if the controls are pretty strict.  What kind of controls did you specify for them?  None?  They can determine their own?  

Andy, I've gotta tell ya, I'm starting to get a little worried about this whole thing.   

Oh, by the way, I've got a copy of an email that a good client (inadvertently) sent to me.  It was a long thread in response to my request for my standard $100 fee for a final inspection.  Someone at this LENDER didn't want to pay it, and specifically wrote:
"I wonder if we can keep him off the (their partially owned AMC) list so he doesn't get any Conventional orders from us after May 1st?  I'll check with my Boss to see if we can use it as leverage against him to do it for free." 
So I'm really glad that there is no more lender pressure occurring.  What a relief!

So in closing, I would like to thank you, on behalf of many in the appraising profession, for everything you've done for us.  With Obama now in office, from a tax perspective it's probably a good thing that I make substantially less money this year.  
Let me know what your next lawsuit/deal is going to be, so I know to stay out of that profession!

Sincerely,

Mike Lay
Appraisal House Texas

Here is an email I wrote to a good mortgage broker client I've had for the past few years, in response to one from them asking me to please sign up with Fiserv as required by Crescent Mortgage, one of their lenders:

Hi Bob,

Tom also sent me one for Taylor Bean & Whitaker, who is using some company called SecurityOne Valuation as their AMC.  Both they and FiServ typically charge the borrower more than I do now, and then only pay the appraiser about $200, keeping the rest for themselves.  I actually called SecurityOne to ask what their split was, but was told it was a "case-by-case" basis.  They wouldn't even tell me what a typical assignment in my area paid, so I have to assume they are rightly embarrassed by the answer.

AMC's like that tend to get the appraiser with the least experience, or at least those with no other business to speak of, that is pretty much starving and will agree to do it the cheapest (to maximize the AMC's take - they don't reduce the cost to the borrower at all), and will turn it the fastest regardless of the work required to do it properly.  And even then, the appraisers that don't "make the number" probably get relegated to the bottom of the call list in favor of the ones who do. 

This legislation has essentially just added another layer of bureaucracy to the process - someone else gets paid for doing next to nothing and adding no value to the process.  Maybe the next step will be "Appraisal Distributors" that collect the appraisal orders from the lenders and distribute them to the AMC's?

I guess it's good for the mortgage side, as I think you will find that you will get the report back just as quickly, and now the numbers will most likely always work.  But chances are the borrower or the lender is getting screwed, as in my opinion it's hard to expect an honest opinion from someone who has to rely on an AMC for their livelihood.  Those appraisers out in the country with no competition can live with it fairly easily since they can mandate whatever fees they want, but here in our area where there are a lot of appraisers willing to work for nothing, the AMC's know they have us over a barrel.

However, I would expect that underwriter conditions will go up, and the turn time to get them addressed will be several days since you can't just call or email and say "can you change this one little item".  It now needs to be sent to the AMC in writing, who then contacts the appraiser, who fixes it, sends it to the AMC who (theoretically) reviews it, and then sends it back to you. 

I, like many appraisers that have worked hard to build a business with hard work, good service, and a quality product, won't work that cheap, nor be relegated to sitting around hoping some AMC will call to offer me what is effectively minimum wage.  I am fortunate to have plenty of non-Fannie/Freddie business, so I'm not going to be signing up with any of these AMC's that take half the fee for doing 15 minutes of work. 

Anyway, that is my rant on AMC's.  I know that it is the lenders requiring it and not you all, and I will miss your business, but keep me in mind for any jobs that are not going to Fannie/Freddie, like FHA appraisals, construction loans, or anything else that comes along.

FYI, if any lenders use AlaMode's XSite for their HVCC compliance, or AppraisalPort.com, I am set up with both of them.  They charge me a flat fee of roughly $15 for every report processed which is very reasonable.  And I still get my regular fee, which is the way this AMC business should work, IMO.

Anyway, I do appreciate the business we have had for the past few years, and let's please keep in touch.  Maybe after a few months of this new business model, the lenders will realize they made a mistake and we can work together again.  I will keep my fingers crossed!

Well, the first of two important dates is almost upon us.  On April 1st, Fannie and Freddie will require the 1004 MC Market Conditions Addendum with all 1-4 unit property appraisals.  And that means most appraisal types, not just the 1004.  It also applies to the 2055 (exterior only), 1073 & 1075 (condo forms), 2090 and 2095 (co-op forms), and 1025 (2-4 unit multifamily form).  Here is a link to a FAQ's page at FannieMae if you are interested in the details.

Personally I can live with this one.  I'm not happy about it, but I can live with it.  I think I've got the form down to about a 10 minute exercise.  My MLS data is pretty good and easy to search, and so the info is fairly good.  However, I sincerely doubt it is going to solve the problems Fannie thinks it will.  I've done about 10 of these so far, and I can tell you it is just as easy to manipulate the data as it always was, so the cheaters and liars in our business will continue to do so.  The only difference is now the rest of us have to suffer through another 10-30 minutes (or more) of work.  And from what I'm hearing from appraisers around the country, no lender is willing to pay any more for it.  PERFECT!

And of course we have May 1st bearing down on us, the (theoretical) start of the HVCC.  While the NAMB is currently trying to sue to stop it, I have to believe the major damage has been done.  There is a great (or depressing, more appropriately) chart here from Alamode that shows the increase in orders through AMC's over the past year.  So the threat of the impending implementation forced most lenders to move to AMC's, and why change back if they are already there?  I think some will find they miss their old appraisers, while others will get used to the status quo.  Let's face it, as long as it makes value, most LO's don't care who does the work. 

What I've realized is the most distressing part of this is the "unknown" -- not knowing what will happen in the next 6-12 months for my business.  When the legislation first came out last March, there was a Q&A period and then a decision was going to be made in May or June.  Then it was pushed back to November.  Then a revision came out around Christmas, and a new start date of May 1, 2009.  Now the NAMB has filed suit, which may delay it again if they can get in front of a judge in time. 

While I would love to see the majority of the HVCC go away, I'm getting to the point where I just wish it were done with either way, so I had a better idea of what the next 6 months or year would look like for my business and could plan accordingly.  I've made some moves over the past year to be better positioned for the HVCC if it does go into effect, but I also hedged my bets and did some things that will be beneficial if it gets defeated.  The problem is, I can't get fully engaged with any of it until I know what the final outcome is going to be, and I think that is probably the worst of it all. 

As a business owner, I want to have a defined plan of action. I will tweak it as necessary month to month, but to make a major shift -- which the HVCC is going to cause some of us -- is not something you can do in a months time without a significant negative impact to your business.

I guess I should have taken that job in the financial products division at AIG, collected my million dollar bonus after flushing the economy down the toilet, and required to my weekend home in the Hamptons.  Oh well...      

I don't do a lot of review work, but have several good clients that will ask me to do them on occasion.  I also received one through Appraisal Port recently that really made me question both the "training" that new or potential appraisers get, as well as the general ethics that some appraisers have. 

The appraisal was on a home that was kind of out in the country on 5.7 acres.  Not quite rural, but one of those "subdivisions" where the owner had 30 acres and decided to subdivide them into several small acreage lots and call it "Happy Acres".  There is no infrastructure, no common areas, not even a sign.  Just a few houses on acreage that are each responsible for their own little parcel, and few, if any deed restrictions.

The house itself was very nice, stucco with clay tile roof, and a nice interior finishout.  Not much in the way of landscaping or outdoor improvements like pools or outdoor living areas, but not a bad place.

The value opinion from the original appraisal was $500,000.  So I start my review, and the information contained in the Subject, Contract, Neighborhood, Site, and Improvements section was fine.  No issues so far. 

Then I got to Question 7, "Are the data and analysis presented in the sales comparison approach complete and accurate?"  I reviewed the original report, and noticed immediately that the appraiser had adjusted $3,800 for 3.82 acres.  Now I'll admit that the land is fairly inexpensive out there, but a value of $1,000 an acre?  I looked up recent sales of similar 3-10 acre tracts, and determined an average per acre price of roughly $20,000.  So I commented that I thought the land adjustments were very minimal.  To oversimplify: if you had two duplicate houses, one on 5 acres and one on 8 acres, if the one on 5 acres sold for $500,000 I think it was reasonable to expect the one on 8 acres to sell for a bit more than $503,000 in that area.

So I rewrote the comps grid using all three of the original appraisers comps, but revising the adjustments and adding a few others.  I won't bore you with the details, but my grid came in at $450,000, or $50,000 less.

About two days later I got a call from the original appraiser, who was not too happy.  But I was certainly willing to talk to him about it.  So I asked him where he came up with the $3,800 adjustment for the lot size difference, and here is where I just started shaking my head.  His response?  "I was taught that you adjust 10% of the actual lot value."  He also made some reference to similar instruction in CE classes, which I find hard to believe. 

Since he already had started off the conversation with a crappy tone of voice, I had no problem informing him that the sales grid is where we are supposed to put "market adjustments" which we obtain through proper statistical analysis, and not just a standardized adjustment derived from "what I was taught".  Besides that, there were sufficient lot sales in the area to easily realize that the lot value was approximately $20,000 per acre, and so his adjustment was actually only 5%, not 10%.     

I pointed out several other items he didn't account for, such as several of his comparables being in superior subdivisions with deed restrictions, recreational amenities, closer to commercial centers, etc.

He asked about an adjustment I had made for $3,000.  I explained that it was for the fact that the Subject had no fireplace while the comp did.  He responded that he didn't do that, and felt that it was a "chicken-sh__" adjustment.  I said "kind of like inground pools?  Because I noticed that you didn't adjust for the really nice inground pool & spa that comp #2 had."  He didn't have much to say after that and hung up after a bit more grumbling.

Am I out of line here, or was there some AI memo I missed that said that market analysis is not required?  That regardless of the house, or location, or quality, a fireplace is always worth nothing, and lot size differences are always worth 10% of whatever the tax record shows as land value?  And there is no need to adjust for superior or inferior neighborhoods? 

I just can't figure out if this guy was too dumb to know he was appraising to hit a specific value, or really just thought that he did a good job.  Either way, it makes me sad that so many appraisers get trained like this:  "If the lot size is different, just adjust it 10% of what the tax value of the land is" or "Always adjust for size at $20/sf".  In my opinion, it's pretty obvious that he was trained by someone that had 10 other trainees at the same time and  learned only to hit the number if at all possible regardless of the actual definition of "market value" that he was signing off on.  However, I also wonder how you can take 150 hours of classroom training and not get the concept that you are doing it wrong? 

I don't know if we need more training and harder tests to weed some of these guys out, or a better way to turn these reports in for a review by the state board, but something needs to be done to reign these pushers in.      

Lenders,

I would like to relay a firsthand account of what kind of quality you might expect when you choose to work with AMC's:

A very large bank, in fact one of the largest BANK's in AMERICA, uses eAppraiseIt for appraisal management services.   Now, I would agree that if you wanted to deter having the LO's pressure the appraisers, a firewall such as an nonaffiliated AMC just might be a good solution.  The AMC orders the appraisal, the chosen appraiser does the best possible work (or at least what you might expect for a +/-$200 fee split), he/she sends it back to the AMC, and the AMC delivers the report to the lender (after stripping out any relevant information so that it can add it to its database to eventually put the appraiser out of business anyway, but that's another blog post).  Simple process, fundamentally sound, right?  But what if...

What if the subcontractor appraiser, working for his $200 split, could find people willing to do the work for even less?  What if this subcontractor had built a pretty good business subcontracting it out again?  What if he had somehow managed to get eAppraiseIt to believe he could handle any appraisal in a 5 hour radius, but actually was just subbing them out? 

Well, I guess that if the AMC's are getting all of these quality appraisers to work for $200 each, the quality must get even better at 50% of that, right?

So to Chase and Wells Fargo and you other large lenders, remember that scenario when you are going through your defaulted loans in the next several years and wondering how it's possible that you have so many.  I mean, you fixed the whole lender pressure thing, right?  And got rid of all those greedy appraisers who were asking for full fees, right?  And your AMC continues to provide you with appraisals done for the least amount of money and in the shortest amount of time, so how could these loans be so bad and the appraisals so far off? 

Well, you might want to keep in mind that the person that did that crappy appraisal just might have worked for 8 hours to earn an $80 or $100 fee split off of the $200 fee split the AMC paid to the original vendor.  So maybe $10 or $11 per hour?  What is the starting pay at Burger King nowadays?  At least you spend less on gas and get a free meal. 

My housekeeper charges $25 per hour, I wonder if she is hiring...     

I am very excited today because I found out that we NO LONGER NEED TO FIND AND USE THE "BEST" COMPS IN OUR REPORTS!  Nope, it looks like that old, outdated method of choosing the most comparable sales is going the way of the wooly mammoth.  From now on, the only important attribute of a comparable is that it MUST HAVE SOLD IN THE PAST THREE MONTHS.

Think of how much easier our life is going to be now!  We don't have to worry about stupid little things like proximity, or similarity of quality, age, condition, lot size, age, or even size.  So feel free to go off the charts with your adjustments, because that is okay now!  As long as they sold in the past three months, they are automatically now your best comps.

Of course you are thinking, "Mike, you're losing it.  The most recent sales are not automatically the best sales.  That's crazy talk!  Often sales that are older are much more similar and much better indicators of value.  Who would think that a 3,000sf house built last year is the best comp for a 60 year old 1,900sf home just because it was a recent sale?  You just need to make sure that the area has not experienced a decline in values, or is experiencing extended marketing times which may adversely affect the Subject as compared to those older sales."   

That, unfortunately, is 2008 thinking.  You need to bring yourselves up to date!  There is a new paradigm now!  At least according to the underwriters I have been dealing with lately, who refuse to accept an appraisal with 2 recent sales and three over 6 months (but less than 9 months) that were the EXACT SAME FLOORPLAN, and after I had provided extensive data that sales were increasing, sale prices were stable, average cost/sf was stable, etc.  (I've now had this discussion about 4 different appraisal reports with 3 different lenders.)  There I was, stuck in my old ways of picking the most similar comps and providing statistical analysis to show why they should be given most consideration. 

Fortunately, I am now enlightened to the new ways, and am looking forward to just searching an ever-expanding search area without regard to similarity until I can capture 3 or 4 sales that occurred within the past 3 months.  It will be so much easier, I now look forward to each new day with such enthusiasm I can hardly stay in bed!  No more dreary old research and analysis for me!  Join the wave!!!!

PS - For those of you unable to recognize rampant sarcasm when you read it, I am just kidding.  There is no new method, no new paradigm, just me venting a little after failing to find any sign of common sense in the underwriting departments of several lenders.  Sorry to have gotten your hopes up... 

My 1999 Ford Expedition recently turned over 200,000 miles, and I am very proud.  I've never owned a car that lasted more than 120,000, so this is a definite milestone.  It runs great (knock on wood), is still in great shape, and has had only some minor repairs over the years.  I bought it in 2001 with 33,000 miles on it, so that averages out to about 24,000 miles a year.  And best of all, it's been paid off for a while.  I didn't like $4/gallon gas, but it was still cheaper than a new Prius!

I've received a lot of calls and emails from my last post, so I want to thank all of those appraisers out there who (a) still believe our industry shouldn't be given away to the management companies, and (b) think that the current HVCC is a bad thing for our industry and needs to be revised or killed. 

I remain hopeful that it will not go into effect anywhere near it's current incarnation.  Personally, I don’t understand how it COULD pass – I can’t imagine there wouldn’t be tons of lawsuits against Fannie and Freddie, since they (and the NY SAG) are essentially telling customers I’ve had for years that they can no longer choose to do business with me.  (What would happen if you told realtors that from now on every prospective buyer had to sign in to a government web site, and they would be assigned the next available realtor regardless of reputation or knowledge?) 

What this agreement is essentially saying is that, as a professional residential appraiser who has worked for years providing quality appraisals for use in mortgage lending, I no longer have any right to perform that action unless specifically asked to do so by a third party.  I cannot prospect for business in this category (aside from "signing up" with the AMC's), and I cannot get referral business from people that appreciate my professionalism, speed, and work quality.  So the entrepreneurship is taken away.  My job would consist of sitting by the phone, hoping it rings, and then making sure the assignment makes value so it will ring again. 

By the way, I am aware that the above is a drastic over-simplification, but if that has historically been your business then that is a fairly accurate description.  Yes, you can find new clients that are correspondent lenders, or find local banks the do construction loans, or get divorce work from appraisers, but the bottom line is that the HVCC has just taken away the business you have built and run and made successful.

I'd be interested to hear from appraisers that do a lot of work for AMC's about what percentage of the time they bust values.  Does anyone bust values regularly and still get the same amount of work?  I don't see how the HVCC does anything but pass the pressure up the line.  Sure, there is no pressure from the lender on the appraiser anymore, but the lender is still going to pressure the AMC (hello eAppraiseIt and Wamu!).  And the AMC is now going to pressure the appraiser (or stop using them and find another one who will get the job done.   

Tell me if I'm wrong on this...