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What is a reasonable fee for a rural appraiser?

Discussion in 'General Appraisal Discussion' started by Ray Miller, Oct 15, 2010.

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  1. Ray Miller

    Ray Miller Elite Member

    0
    Feb 20, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Wisconsin
    Should the appraiser be paid for:

    Travel Time to and from the subject, the comparables and township, assessor offices?

    Mileage on company vehicle (this covers repair cost, replacement cost for auto, replacement cost for tires, monthly oil changes and such)?

    Office time to write the report?

    Office expenses that include each reports share of phone/lights, hardware/software replacement, business insurance (gen lib, reo, commercial auto), realtor association dues, mls dues, ce classes, on going education, license renewal, membership in appraisal associations, reference books and publications, health insurance?

    Let’s take my appraisal for yesterday:

    I left the office at 8:00 a.m. and returned at 5:30 p.m. I covered 350 miles looking at the one subject five comparables, and two listings, stop by the court house and the village offices for non-on line data. As well as stopping by several non-mls real estate offices for there recent sales.

    I feel a reasonable fee should be $75 per hour travel time for 8 hours = $600. My auto expense .53cents per mile $185.00. Office time of 4 hours to research and write the report $300.00. Office expenses $35 per report. The fee for this report is $1120.00 is this really out of reason???

    Should more work and more hours be charged for as well?

    I base this fee on what my auto repair shop; my plumber, my vet, heating and cooling, TV/appliance people have charge me in the last four months.

    If you think it is out of reason why? If you think it is reasonable, why?
     
  2. Denis DeSaix

    Denis DeSaix Elite Member

    232
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    I think your fees are reasonable except for the $75/hour for driving back and forth. I don't think it is reasonable to charge the same amount for your driving time as you do for your analysis time for mortgage finance work.
    Unless, of course, you are foregoing $75 analysis work to drive the 8-hours. Then the economic answer is to not take the drive and do the analysis work. :) You may have other endeavors (ranching, farrier, auctioneering) which are more profitable than driving, so if those are an option, you should do those instead of driving as well. If so, take those opportunities. Because the question really becomes, "what are you foregoing by taking the drive?". In your example, you've already recaptured the auto expenses. If you had nothing else to do, and your auto expenses were paid for, would you be willing to make a 8-hour inspection trip for $80 to $100 dollars in order to earn the ability to finish a report for $520? If yes, the reasonable fee is $600-620. Maybe $15/hour is what you want to make to catch the $520; then the fee is $640. That sounds reasonable to me as well.

    And, finally, if your market is such that you have little competition and are not fee-sensitive as far as your clients are concerned, then you can charge whatever they can bear (which is not unlimited, but may be closer to your $1,120).
     
  3. Vermonter

    Vermonter Senior Member

    19
    Mar 21, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Vermont
    Agree, however the possibility of making a second trip is not unheard of on rural assignments. You have to charge what is worthwhile or decline the assignment.

    There are times you take a beating tho....like the one on my desk right now. All comps in initial research have been disqualified for one reason or another and have to make a second 80+ mile round trip.

    It's always good to re-analyze your P&L tho. Wish more appraisers did.
     
  4. Mile High Trout

    Mile High Trout Elite Member

    24
    Feb 13, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    It's simple to think of it in terms of specialty and experience.

    Some appraisers are rural circa appraisers, and they find the task less time consuming due to experience. Some appraisers are urban circa appraisers and find tasks such as highrises and such to be less time consuming.

    The shift away from local has caused for less specialists to be on hand.

    Fit the fee into your business model, and client base.

    Avoid the second rural trip by spending as much time as necessary to bring all those sales with you. The old paper printed MLS books were quite handy in a rural situation. Sometimes you just need to have a lot more sales than you need to be certain you won't have to take another trip out.
     
  5. Verne Hebert

    Verne Hebert Senior Member

    0
    Feb 25, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Montana
    I can't agree with the travel. I understand the rationale but the market won't bear it here.

    I include one hour travel and 50 miles in the base appraisal fee.........which I consider market. Beyond that..travel is $ $ 35 hr and mileage is .60. And the market here, for complex work, my fee schedule, is $ 375 day. Often I have 300 mile days also.

    Lately most are because I have been doing outlying FHA work for a few months now. I can comfortable do 6 a month and the fees range from $ 850 to $ 2000 for sfr's, generally; occasionally higher.
     
  6. Michigan CG

    Michigan CG Moderator Staff Member Moderator

    284
    Nov 1, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Michigan
    I have a hard time understanding why you would need to travel 350 miles for a rural residential assignment or even a farm assignment.

    Have you thought about referring the work to someone who is more proximate to the subject and comparables?
     
  7. Ray Miller

    Ray Miller Elite Member

    0
    Feb 20, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Wisconsin

    As for the road time, I can't see going as low as the $15 suggested maybe some reconsideration at $25 to $35.

    Why should the rural appraiser eat a second trip. Should not the lender tell us what we are to appraise in the engagement letter or the scope of work? Should they not stand at lease part of the cost. If the fees for all the appraisals were just and reasonable may be an appraiser could eat one of two every month.

    But this bull of tossing a blanket fee for the rural cities, towns, villages, rural recreational property, acreages to be set the same as the urban fees is just not right.

    Is it not time that the rural appraiser make this known. While I can do three maybe four a week, the urban appraiser can do 7 to 10 a week for the same fee, with less expense.

    I wish more appraiser from the urban areas would stop coming out and working for pea-nuts in the rural areas. I just review an appraisal where the fee for a 1004 on acreage with out buildings was $200 and the appraiser drove half-way across the state. Didn't have the closed sales that were not listed in the MLS data base. Missed the value by some $100,000.

    Its time now to let the AMC know what reasonalbe is for the rural area, Right? Not let them set the same fee as is being done that they pay for the urban area's.
     
  8. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    418
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    Time and expenses. Pay me $750/day and I will drive for free - How far can you go in 8 hours? 500 mi? My day rate is $500. 50¢ a mile?

    i just went to Dewey Co., OK then bounced down to OKC for a second project, divided the milage between the two.
     
  9. Elliott

    Elliott Elite Member

    53
    Apr 23, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Oregon
    I quote a fee and a turn time. I don't negoiate, I don't agree to
    pre-set fee schedules. I'm known in the AMC world as a "spot appraiser,"
    which as far as I can figure is what we use to call an 'independent
    fee appraiser.'
     
  10. Ray Miller

    Ray Miller Elite Member

    0
    Feb 20, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Wisconsin

    Location is up a state highway to a county trunk to a township road up a very steep hill to a one mile privite shared road to a half mile privite drive way 300 feet above the Wisconsin River on small rural acreage with horse out-buildings, shared well with four other homes. The view is breath taking of the River. The comparable search was from Prairie Du Chien to Stevens Point, WI.
     
    Last edited: Oct 15, 2010
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