Ahead of what promises to be a busy spring season, appraisers may've scored a win in a long-running dispute with many appraisal management companies regarding timely payment.
Incenter Appraisal Management is rolling out a new program that allows appraisers to be paid within 24 hours of submitting a report.
The
"We looked at that problem, we realized we could do something about it," Walser said. "In our case, we looked to take the billing piece [and provide] peace of mind and make that a reality for our appraiser panel."
Typically, most appraisal management companies pay within 30 to 45 days after receiving a report; that is also the case for banks and other lenders that use their own panel of appraisers to do valuation work.
But the appraisers themselves are typically small businesses, with quite a few solo practitioners doing everything themselves, including tracking down compensation for unpaid invoices. As is they spend much of their day doing inspections and reports; with the extra volume seen in the last year especially, there is not a lot of time left to spend on managing the business.
"We've gotten a lot of feedback from appraisers about how they're chasing down their payments with AMCs," Walser said.
Some appraisers have had to turn to factoring — borrowing against their receivables for a cut, usually 5% — in order to get paid quicker, Walser said.
And in a business where what constitutes a
Payment to its appraisers will be made within 24 hours of the report's submission in most cases, via automated clearing house transactions. The company already typically paid on a seven-day cycle via check and that option will be maintained as well, said Walser.
Incenter has 13,000 appraisers nationally but some of them are used more frequently based on location and workflow.
Appraisers often aren't paid for at least 30 days because of timing of when the AMC itself gets its money from the lender.
"The vast majority of AMCs can't afford to pay out the appraisers 100% right out the door and wait for payment from the lender, it just doesn't work from a profit and loss standpoint," Walser said. The 30-day model gives the AMC time to collect the funds from the lender.
With a team of six appraisers, Daniel Fries & Associates, an appraisal company located outside of Atlanta, exemplifies the exception more often than the rule. Its valuators are supplemented by two full-time and one part-time support staffers, so the company is considered medium-sized relative to those of other appraisers, said Daniel Fries in an interview.
"It would be nice to get paid in 24 hours but to me, it's not that big of a deal because we've got the cash flow coming…and we're not running check-to-check," Fries said.
His appraisers are able to spend all of their time doing valuations, while his support staff, which includes his wife, is able to do all the work required to keep the business going.
Still, while the Incenter program is great (and he is not an Incenter appraiser), "I've been doing this 36 years and it's kind of the nature of the beast," Fries said. The ideal is for his clients to pay in 30 days, "in real life it's probably 30 to 45 days for my corporate accounts." And the AMCs he works with are actually more diligent than that about making their payments.
And getting paid at all can be a big deal. When Atlanta-based
Regardless, appraisers need to be taking care of in order for the industry to keep on moving as smoothly and as fast as it wants to move, Walser said.
Appraisers "are business people too," he said. "They make decisions, prioritizing lenders and AMCs based on what they're being paid, how fast they're being paid and
