$250 Appraisals?

[timd354]

Jr./timid: You have any idea what "Price Fixing" Means?? People have given you various cost factors to figure into the Appraisal let it go at that. IF you feel as though you can make money at whatever fee you feel is good, well congradulations. There are many on here that have tried to assit you in figuring cost. I hope there is NOBODY on here that is going to tell you what to charge, You been watching the news at all the past week or two?? Buy a book on business economics, attend some courses at your local college. They are DEDUCTIBLE!! Learn from those older than yourself. do NOT ask on a public Forum what you should charge.

How is it price fixing for an appraiser located in Maryland to ask an appraiser based in California what his minimal accpetable fee is? Besides, why don't you read the whole thread before you accuse me of something that has no basis. If you read the whole thread, it will become patently obvious that Mike and I have taken an opposite viewpoint on the issue being discussed here.

I have no trouble at all figuring my costs, here they are if you care:
Here is a list of my expenses for my appraisal business:
office rent: $0 (I have a home office)
Fax Line: $26.78 per month
Cell Phone (which functions as my business line): $120.75 per month
Auto Insurance: $1,152/year = $96/month
E&O Insurance: $641 year = $53.41/month
Gas Expense: (figure base upon average round trip per appraisal inspection of 72 miles -from last year's records @20 mpg and gas at $4.00 per gallon: $14.40 per appraisal) assuming 20 appraisals per month: $288/month
Misc Vehicle Expense (vehicle paid off): for oil changes, wear and tear, ties, etc: figured at an additional 10 cents per mile = $144.00 per month.
Office Paper and Toner, supplies ,etc (i refill my own cartidges): $75/month.
Internet Access: $42.15/month
Database Fees: $258 per quarter = $86 per month
Various Profiessional Dues, Licenses, Etc.- avg $500 year = $41.66

Total Monthly Business Expenses (avg based upon 20 appraisals/month) = $973.75
Per Appraisal Estimate of Business Expenses = $48.69per appraisal

This is rough estimate, but pretty accurate I believe. I did not include continuing education expenses because I cannot recall what the cost of that is, but I take the online continuing ed courses thru McKissock, which is pretty minimal every 2 years. Additionally, the cell phone expense and auto insurance expense is higher than the actual amounts which should be included as a business expense since these amounts include my wife's cell phone (on the family plan) and include my wife's automobile, which is not used in business unless my vehicle is in the shop (1 insurance policy).

Obviously, I run a pretty lean office and there is no way that someone who does a lot of rural appraisals which require much more driving or who keeps an office in a commerical space could keep his or her expenses this low.

 

[rescom]

I'd have to totally disagree. I'm not near retirement...I have no children with the excepton of two awesome doggies, am not in denial and have a spouse that had a company go bankrupt. I refuse to lower my fees because of the obvious. It takes me twice as long to produce an appraisal. I have to obtain 15 comps from the get go just in case the lender wants "two more comps " selling in the past 60 days loated .5 mi from subject.

I'll be darned if I am going to lower my fees with all the work I do. IMHO, anyone "lowering the bar" fee wise is the worst thing we can do to ourselves and our peers.

One of my brokers clients the other day said that she could find someone else to do her income property appraisal for $250. I said, "have at it". You get what you pay for. I stand behind my work and chuckle to anyone who is willing to do it for a "sick" amount of money. I ended up getting the appraisal...at full fee.

Is anybody concerned or planning for 2009? Sounds like most of you are simply ignoring it and acting like if you just don't acknowledge it, that it will just go away. If this HVCC is not changed at all, then how are going to make a living? Just curious. And don't give me the non-lending work BS.

 

[Pa'akai]

I'll worry about 2009 when 2009 comes. Half the doom and gloom over the years never came to pass. We have no clue what bill will pass at this time.

As of now I will have enough work at regular fees once I have my HUD approval. Thats the only thing slowing me down right now.

If things change in 2009 then I will consider any changes to my fees and how I will react to the market then.

Right now I don't need AMC's, but thats me and my situation at this point.

I understand my market is different from others, but not everyone works for AMC's and is affected by their low fees.

 

[jay trotta]

Of the many forums et al, visited, I have yet to see anyone post out the information noted on here with regards to earning power; Fee's or anything near. Perhaps there is a hidden fear for some who think it appropriate to waggle this end of the dog for a period of time.

If you know your cost & expenses, you should be able to figure out how to make a living; for those stuck on the; I won't work for less than $$$$ - so don't work, it is Your choice and personally - I don't care. If you know how to make money, why would you come here and post it on a public Forum ?

Obviously most want the "Public" to know exactly what they should expect in regards to a Fee.....why, nobody here has any idea what any of those properties are all about. Perhaps that enxt property you go visit may warrant a $1,500 Fee - your going to have one hell of a time gettin over that 1989- $450 Fee.

Ya'll charge whatever you feel the Cost to produce the report will be based on what it takes to get the job done. Let whoever is offering you the opportunity to work decide if they feel the work is worth the cost. End result, ifn yer Not charging enough, ya won;t be here next time around - that in and of itself lets us know who has any business sense.

Cheers

 

[phoebe33764]

To Rescom

I'll worry about 2009 when 2009 comes. Half the doom and gloom over the years never came to pass. We have no clue what bill will pass at this time.

As of now I will have enough work at regular fees once I have my HUD approval. Thats the only thing slowing me down right now.

If things change in 2009 then I will consider any changes to my fees and how I will react to the market then.

Right now I don't need AMC's, but thats me and my situation at this point.

I understand my market is different from others, but not everyone works for AMC's and is affected by their low fees.

I couldn't have said it better myself. Cutting my fees before it is necessary is like giving away my hard earned money. No way. When the time comes, I'll adjust. After 2009, the AMC thing can't go on forever. Every month I do a spread sheet calculating if I am spinning my wheels doing appraisals when I could make $50k a year at a desk job. I am still in ahead and can work out of my home. Next year I may reconsider.

 

[David Sawyer]

I'd do an appraisal for $250. This country is pretty close to being in a depression - I'd take whatever work you can get right now.

Chad,
Who are you? Last month you stated on a forum,

..."I moved out of FL last week to take a job in the carolinas. My new job is outside of appraising, but I also fortunate enough to have a degree and have only been in appraising for 5-6 yrs, so it wasn't that tough to get back into my old profession (engineering).

In researching the Florida DBPR site, the only Hampton listed as certified is a female and it is not Chad. This past week, I have had two requests from AMC to be on their list for $175 fee for a 1004/ condo. Would you really want to know what my reply was? If you were still in Florida would you accept this fee since you stated..." I'd take whatever work you can get right now"?

Did you find a job in the Carolinas for a AMC? Is that why you are pimping these low fees? Three years ago I did a minimum of 10/week and worked 70-80hr work week. Now I only average 4-5/week with the majority complex assignments and my fee on these is more than double what you stated that you would accept. Last week all my 6 orders were non-lender work which is what the goal of my business plan.

 

[Ray Miller]

Not picking on you but just using your data. It shows that you at least keep some data and have an idea of what some of your business expenses are. You had the to post.

I have no trouble at all figuring my costs, here they are if you care:
Here is a list of my expenses for my appraisal business:

office rent: $0 (I have a home office) I must there for assume that you do not take a deduction on your income tax for a home office.

Fax Line: $26.78 per month

Cell Phone (which functions as my business line): $120.75 per month Some of us are in areas that do not have cell phone services, like my self I must depend on hard lines for each computer motem, incoming and outgoing voice, fax. In addition to business cell service. Which with Altel is $99.00 per month base with all the taxes and related ad on’s is around $200 per month. Hard line is around $500 per month now with out the yellow page advertising (which is covered later)

Auto Insurance: $1,152/year = $96/month is this commercial or is it associated with you personal auto. If so you may want to really read you policy about your coverage. A lawyer will if you are in some kind of accident and my cost you everything if you auto policy does not cover you on the job.

E&O Insurance: $641 year = $53.41/month I see not general libility, health, accident, workers comp.

Gas Expense: (figure base upon average round trip per appraisal inspection of 72 miles -from last year's records @20 mpg and gas at $4.00 per gallon: $14.40 per appraisal) assuming 20 appraisals per month: $288/month My rural appraisal run can run that in two days. (So why should I be held to the same standard for expense for my rural appraisals as others in urban sitting?)

Misc Vehicle Expense (vehicle paid off): for oil changes, wear and tear, ties, etc: figured at an additional 10 cents per mile = $144.00 per month. I don't see anything for major repair/tune ups. You have not figured any replacement cost for when it dies on you. Looking at a lot of published data the cost you have listed are now at around .34 per mile without the cost of replacement. (my truck needs to have the 5 speed replaced and a tune up. Just this is going to cost $2300.


Office Paper and Toner, supplies ,etc (i refill my own cartidges): $75/month. My HP and Epson cartridges can cost that for just one refill.

Internet Access: $42.15/month

Database Fees: $258 per quarter = $86 per month

Various Profiessional Dues, Licenses, Etc.- avg $500 year = $41.66 Professional dues in any of the Appraisal Association run three times that about.

I see no replacement cost for hardware or software.

I see no vacation pay, sick leave, holiday pay.

I see no health insurance, retirement.

I see no marketing and advertising cost.

I see nothing for the expense of CE.

I see nothing for on going education.

I see nothing for professional publications to keep current of the profession.

I see nothing on regulatory publications for the industry.

I see nothing for the cost of educational books to keep you update and informed.

I see no cost for accounting and and filing of taxes.

I don’t see any thing for overtime worked.

I see nothing for heat and lights in your office.

I see nothing for current up grades in soft ware, M/S or similar or NADA or similar or any thing for monthly software support for any software.

I don’t see a return of investment.

I don’t see a return on investment.

I don’t see wages for additional help, be it a family member or someone else.


Total Monthly Business Expenses (avg based upon 20 appraisals/month) = $973.75
Per Appraisal Estimate of Business Expenses = $48.69per appraisal

What I am assuming here is that I am seeing cost associated with what has now become a cottage industry/profession. Not a real stand alone Professional Business with all expenses cover and a fair profit or income.


Obviously, I run a pretty lean office and there is no way that someone who does a lot of rural appraisals which require much more driving or who keeps an office in a commerical space could keep his or her expenses this low. How ever the lenders had come to expect that all can run an appraisal office, business for the same fee across the board. Fast and cheap. The $250 fees just don't even cut it any more.

 

[Tim Hicks (Texas)]

Ray,

Every company in the world has been downsizing in the past 10 years to cut costs. Appraisers should be no different.

A $250 fee is cheap, but certainly better than $0 in one day. That is how many appraisers look at it, including me. I am out of business at $0 a day. $150 for an appraisal is ridiculous, but if that is what the market comes to, then we all may have to downsize or go out of business.

 

[Wolverinefan]

Simple supply and demand curve....too many appraisers and too few assignments. Until appraisers decrease or volume increases we will continue to see this downward spiral....Its sad but its the same in many other professions as our economy sucks.

 

[JonGalt]

Great break down Ray.

I see no replacement cost for hardware or software.

I see no vacation pay, sick leave, holiday pay.

I see no health insurance, retirement.

I see no marketing and advertising cost.

I see nothing for the expense of CE.

I see nothing for on going education.

I see nothing for professional publications to keep current of the profession.

I see nothing on regulatory publications for the industry.

I see nothing for the cost of educational books to keep you update and informed.

I see no cost for accounting and and filing of taxes.

I don’t see any thing for overtime worked.

I see nothing for heat and lights in your office.

I see nothing for current up grades in soft ware, M/S or similar or NADA or similar or any thing for monthly software support for any software.

I don’t see a return of investment.

How 'bout reserves for the new computer when the current one crashes and dies? Never had to buy a new MFC printer when the current one decided to break when you had 5 orders on your desk?

Okay, so if your overhead per report is about $75-$95 per report, they offer $200 for the appraisal, what does that leave you?

Does everyone on the board pay their tax or am I the only one paying? Tax sucks quite a bit out of a fee too. Both parts of FICA, business tax, payroll tax, my accountant costs $1200.00 per year to manage it all.