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?
Tags: Appraisal Management Companies, Soapbox Blog, Jonathan Miller
I suggest you search threads on http://www.appraisersforum.com. This issue is well documented and discussed.
That is shameful. I have not performed any work for them in months, because unlike your firm, I was receiving fees that were HALF of what I would normally charge—and they wanted top-notch work.
I can not see how they are having financial difficulty, unless there is some serious mismanagement of funds. You can either wait for your hard earned money, try to contract AMCO’s clients or use the threat of this as leverage to get your money, or tell your attorney to “get em.”
What troubles me most is your insinuation that they are managing the float. That would be unconscionable and should be punished. AMC’s—in a nutshell—have too much power over the average appraiser, who depend on them to put dinner on the table, and they have the audacity to not even return phone calls. You basically loaned them money, imagine not returning your banks phone calls?
What number do you call to collect past due invoices from them? Please post it.
WE ARE HAVING THE SAME TROUBLE WITH AMCO AND ARE NO LONGER ACCEPTING ORDERS FROM THEM. IF YOU CALL THEM YOU ALWAYS GET VOICEMAIL. OUR CHECKS HAVE BEEN TRICKLING IN AND SEEM TO BE CATCHING UP ON WHAT THEY OWE. HOWEVER, I HAVE TO DISAGREE WITH YOUR THOUGHT ON US “FORM FILLERS” AS YOU SAY. MY COMPANY PRIDES IT SELF ON THE FACT THAT WE PROVIDE DETAILED AND WELL RESEARCHED APPRAISALS TO THE AMC’S WE WORK WITH. ON THE CONTRARY, WE ARE NEVER ASKED TO “MAKE A NUMBER” AND MANY OF MY AMC CLIENTS DEMAND A HIGHER QUALITY OF APPRAISALS, EVEN PROVIDING ME WITH ADDITIONAL INFORMATION THEY WOULD LIKE TO SEE IN THE APPRAISAL REPORTS. SEEMS LIKE YOU FELL IN WITH THE WRONG AMC’S. WE STAND FIRM WITH OUR ETHICS AND USPAP AND HAVE NEVER HAD ANY PROBLEMS.
Thanks for the feedback Patriot – well said. …but by using all caps it means your are yelling at me 😉
…at least now I know I am not the only one hanging out to dry. I am glad to hear that you are an exception to the general rule as far as form-fillers. I am glad to hear that but it must be a unique feature of your market area.
AMCO owes us approx $7,000, all over 90 days. Considering their huge emphasis on ethics and quality, it seems paradoxical that they so hard to collect from. This is particularly damaging, now, because we refuse to reduce the quality of our work despite their anemic fees, therefore the profit margin here is too thin for us to be providing “financial assistance” to AMCO in the form of float. Last month I spent $700 to join CRAV at AMCO’s insistence. This month, they want my ERC appraisers to spend approx $150 each to take a class from AMCO on how to do relo appraisals.
I’m done with AMCO. Since they’ve lost their biggest client, CitiMortgage, I question whether they will ever make good on their debts. They’ve been slow payers for years. Lesson learned? 1. Fire your questionable clients befor they suck you in too deep. 2. “Big” doesn’t always mean “credit worthy”.
I feel your pain Tom. This is a familiar refrain.
Perhaps all of us should hire an attorney together as a class action to collect our unpaid invoices from AMCO – we could offer attorney a % of what is collected. By the way, I’m done with AMCO – still unpaid from August 2006. They also are not accepting US Mail sent Certified – that’s tells me everything I need to know about AMCO.
Does anyone know if U.S. Trust themselves are reliable? Received a call out of the blue from US Trust Company and they want to pay at closing. I never bill companies with whom I do not have a prior relationship and I see no reason to change my policy. Does anyone have experience with them directly?
I have contacted the Mayfield Heights, Ohio Police Department concerning AMCO’s failure to pay our company’s invoices for work performed. Police detective, Christopher P. Sonnhalter Detective Lieutenant, 440-442-2323 advised me via an email that the Police Department has never received any complaints against AMCO, other than mine. If a number of companies are not being paid and report it to the Police, criminal investiagtion may be in order. Detective’s email address is: [email protected] and Police Chief – Supervisor is: [email protected]