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fee for a 1004D appraisal update

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by Debra Carter, Jan 20, 2009.

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  1. Debra Carter

    Debra Carter New Member

    0
    Mar 26, 2006
    Professional Status:
    Licensed Appraiser
    State:
    Minnesota
    What are other appraisers charging for an appraisal update on the 1004D?

    I have never had to use this form except for final inspection on a new construction. I will need to travel about 45 miles away to take new pictures of the subject & then pull comps to determine if the market value has gone down since the original appraisal.

    Just want to be fair to me & the borrower on this. Thanks.
     
  2. Randolph Kinney

    Randolph Kinney Elite Member
    Gold Supporting Member

    91
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Most lenders want a very cheap, heavily discounted fee calling the appraisal (that is what it is) an update.

    It is in fact a new assignment and a new appraisal on the same property but with new market analysis, new comparables (if they exist) and new effective date.

    About the only thing you are saving is the drawing and measuring time.

    You also have to re-inspect or make the assumption the interior has not significantly changed since the last time you inspected, which is an EA.
     
  3. Debra Carter

    Debra Carter New Member

    0
    Mar 26, 2006
    Professional Status:
    Licensed Appraiser
    State:
    Minnesota
    Right & the subject is 45 miles away so I will have to travel for an hour and a half plus time spent in office pulling comps
     
  4. AL LLANOS

    AL LLANOS Junior Member

    0
    Apr 28, 2006
    Professional Status:
    Licensed Appraiser
    State:
    California
    I would talk them into a new 1004 and give them a discount for not having to remeasure and sketch. The 1004D stinks.
     
  5. leelansford

    leelansford Elite Member

    45
    Mar 29, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    Remember...you will be communicating a Summary Appraisal Report. The 1004D is totally inadequate and you need to supplement the form-- with your analysis of current data.

    Clients want the 'form' completed "on-the-cheap-" because--I suspect--most appraisers do nothing more than "X" a box and accept as payment whatever the client offers. You may have to explain a time or two what is required of you in order to complete a credible appraisal (as the client may not understand that what is requested of you is an appraisal).
     
  6. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    342
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    You need to set an hourly fee and stick to it. For jobs that cannot easily be quantified before hand, it simply makes it easier. I frequently get inquiries to cost and undoubtably lose work over it. But I will not tell someone it is going to cost $1000 and then find that I have to spend 80 hours on the project. I may estimate the cost but make it plain it depends upon the data and the hidden requests of the client....and private clients often morph their wish list as you go along.

    as a form, it is inadequate but it is your work file that is important. Within the scope of work, you need only worry about the work file. You are not necessarily providing a "summary" report, rather you are supplementing a previous report and thus need only reference that and the work file. (AO-03)
     
    Last edited: Jan 20, 2009
  7. timd354

    timd354 Elite Member

    109
    Jan 11, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    $0. I don't do appraisal updates, especially in this market, period. If the client needs a new effective date, they are going to have to order a new appraisal. They will also have to pay a full fee unless the client is a one of my best clients, the property is located no more than 30 minutes from my house, and the property is not a complex or difficult property to appraise. If all of these conditions are met, then the client may receive a small discount if they request a discount.
     
  8. Lawrence R.

    Lawrence R. Senior Member

    0
    Mar 27, 2007
    Professional Status:
    Certified General Appraiser
    State:
    South Carolina
    I am with Tim. It isn't really even about the fee, or the other form...it is just calling what you are really doing by its proper name, and considering the end user may not even see your original appraisal report, referencing it may be useless to the reader.

    We all have these situations pop up where lender A calls you to appraise a house you just did for lender B three weeks ago.

    The main question I ask myself about any fee is this--what would they have to pay someone BESIDES ME to provide this service....then I ask myself why it is that they are contacting me in the first place.

    Usually I come up with this answer

    1. The other guy will have to charge full fee, as he has to start from the ground up.

    2. They are calling me for 3 reasons. 1-They know I already have most of the data at hand, which saves them TIME(time is what?) 2-They assume that since I know that they know that I have done most of the legwork...it won't cost me as much TIME(which is what?) to complete it. And 3--for whatever reason, they want to do business with ME and not the other guy.

    Once I go through that line of thinking, I usually charge the other guy's full fee--which is about 75% of what I charge. We both feel like we are getting a good deal, we both make money while saving time, which is a win win.

    Every now and then they holler about the fee, but it isn't personal. You can't blame anyone for trying to get a deal. I just politely tell them that when I came up with my pricing structure, I took into account that some properties would end up taking more of my time and resources than others....which is exactly why I don't call back in the middle of an appraisal that turns out to be harder than I anticipated and ask for an increase. On that same token, I can't be expected to lower my fee when things are easier than expected. My fee is the mechanism by which I stay in business.

    I know others set their fee based on being lower than people like me, but they may find they are unable to produce a quality appraisal and remain in business at that level.
     
  9. Webbed Feet

    Webbed Feet Elite Member

    24
    Feb 11, 2005
    Professional Status:
    Certified Residential Appraiser
    Mr. Shields,

    You're better than what you posted. A 1004d is a "new assignment." It is NOT an extension of a prior real estate appraisal. NO "Update" is an extension of a prior assignment. A 1004d used update reporting MUST comply with Standards Two for a "Summary" report otherwise it is misleading as it is labeled a Summary report.

    I refute your post. An "Update" is NOT "supplementing" a prior real estate appraisal report. It is a new assignment, it is a new report. End of story. It has to comply with USPAP.
     
  10. Webbed Feet

    Webbed Feet Elite Member

    24
    Feb 11, 2005
    Professional Status:
    Certified Residential Appraiser
    Ditto! And plus the fact the 1004d requires so much patching up to get the final report into USPAP compliance that it's not worth the journey. It is easier just to use the same form used before all over again and create a new full shebang report.
     
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