Sounding Bored is my semi-regular column on the state of the appraisal profession. This week I break out in a cold sweat as AMCO delays paying their bills.
As a matter of ethics, our firm avoids working for appraisal management companies, because as a rule, they encourage poor quality by demanding below market fees and unrealistic turn times. As a results, AMC’s in many markets can attract individuals who do no real research and serve only to make the number for their clients.
The one appraisal management company we had worked for on a regular basis is AMCO because one of our long time clients, US Trust Company, moved their appraisal ordering process to AMCO because upper management wanted to save internal administration costs and benefit from one stop shopping. They likely saw the appraisal as a commodity, like a flood certification. (Note: Be careful what you wish for.)
AMCO tout themselves as The Nation’s Leading Independent Valuation Management Solutions Company and their rep was that they pay a fair fee in a reasonable period of time.
AMCO was told by UST to use us for our market because we had a 16 year relationship. They did for a while but slowly moved the work to their army of form-fillers. We continued to work for them because they accepted our normal fee and turn time requirements. We were mainly hired for complex, high end assignments. We figured it was a matter of time befefore we would no longer receive work from them, so we kept at it until that day came.
A little over a year ago, we noticed they were becoming eratic in paying their bills. They would pay some, but not all of them. Payment times expanded. We have invoices we have been calling on regularly since June and July. We would be directed to their accounts payable department who NEVER returned our calls. I repeat: NEVER.
They owe us over $15,000.
Yesterday we got the following email from one of their reps:
I apologize for the delay in payment. AMCO was expecting to have the funds from a line of credit in December but did not receive them and so that pushed back our payment. We are now expecting to have the funds in the next 2 weeks.
All unpaid invoices thru October will be paid at the end of January. November invoices in February and December invoices in March.
Thank you again for your patience and understanding.
Of course, if the appraisal is a day late, we get yelled at by someone fresh out of high school who doesn’t understand what an appraisal is (ok, so I am exaggerating a little bit, but it makes me feel better).
Here’s an excerpt from my response yesterday:
…Taking 7-8 months to pay bills by a large national coporation is not reasonable and we are seriously concerned that you are having financial troubles or simply managing the float for a greater return. We would not have charged the same fees if it was going to take more than 6 months to get paid on a substantial amount of work.
Are payments prioritized by those who have the most outstanding or simply by their age? One of the advantages and reasons we agreed to work with your firm, as an AMC, was your sterling reputation for being fair about payment which now that seems to be an outdated characterization…
Is anyone else having this problem with AMCO? Do we have any recourse before I hire a lawyer?