After The Shake-Out --- Raising Fees

[liberated]

"All paid jobs absorb and degrade the mind." - Aristotle

Yep, I bet if you did appraisal work for free you'd have plenty of business.... and you'd be considered an appraisal artist... a potential new niche...

Lol.....the philanthropist of appraising? I don't think so.....

 

[mcginwe]

I see mortgage officers making some bank on deals that we make $350 on. Realtors clean house as well. Some kind of increase is needed. Appraisals take time and evern more mental energy. Thats all Ive got to say about that.

 

[glenn walker]

One issue about fees has to do with what market areas the appraiser is located in , I am in a large population center, Los Angeles ca, we have no shortage of appraisers, we have so many appraisers looking for work that the AMCs have no problem getting a $200.00 to $250.00 report done. I have friends who are appraisers in smaller cities and they can demand and get larger fees. I dont work for any AMCs, but I have a cousin that is a manager for one of the bank owned AMCs, she tells me that in Los Angeles they pay as low as $200.00-$250.00 for a full report, yet in an area were there is a limited amount of appraisers , they pay $500.00. some of the areas they call on have only 3 to 5 appraisers in the whole city and they can charge just about anything from $500.00 to $700.00 for a SFR and the AMC pays it. After being in this business for over 25 years, I see the fees going down not up, appraisers just dont understand that banks are not looking for quality but volume, there are always non lender asignments that pay higher fees but the fees for most appraisers are going down , If the HVCC is put in place the Banks are probably going to have the AMCs direct their business for as low a fee as possible, the appraiser will not be pressured into lower fees, he will simply fill out the AMC roster and fill in the box on what fees he charges, if his fees are in the lower ranges, the orders will come , if he trys to get normal fees, the AMCs just route the order to another monkey, great system, no lender pressure, you just wont ever get an assignment. The computer , digital cameras, and Avms, allowed the industry to get up to speed, the next step is to get a whole new generation of appraisers to work cheap, and in all fairness If I had a family to feed, I probably would do whatever it took to eat.

 

[mcginwe]

Thats depressing... I'm staying a bit more positive.

 

[Riick]

glenn....

A poll of my friends in the appraisal business says that if HVCC goes into effect,
they literally cannot afford to stay in this business.
Question then becomes - who is going to do this work?
Probable Answer is: The guys who were doing Subcontract work - $200 looks like a RAISE to them.

You get what you pay for .... and sometimes not even that.

 

[xmtraterbcra]

glenn....

A poll of my friends in the appraisal business says that if HVCC goes into effect,
they literally cannot afford to stay in this business.
Question then becomes - who is going to do this work?
Probable Answer is: The guys who were doing Subcontract work - $200 looks like a RAISE to them.

You get what you pay for .... and sometimes not even that.

Base fees in metro areas of California for full USPAP compliant appraisals should be in the $600-$700 range. Of course, some appraisals are easier, others harder. The $600-$700 is a good average that keeps the price down for those really difficult appraisals - and there are a lot of them. That is to say, my philosophy is that the base price should be an average of 80%-90% of the least complex assignments. Logic: (1) You often don't know the complexity until you actually accept the assignment and start working on it. (2) Complex pricing systems that are open to modification when new information becomes available don't work - you'll just create distrust. (3) It's those time-consuming complex appraisals that kill profits. (4) Borrowers and clients need less complexity, more simplicity. (5) If homeowners can afford to pay $350 for an appraisal of a $200,000 home in Memphis, Tennesse, with half the cost of living as in California, then Californians can afford to pay $700 for an equivalent appraisal of a $550,000 median price home in California. (6) And I can think of other reasons.

Bert Craytor, SRA

 

[demcpeake]

I tried to up my fees by $50 last year and I lost a third of my business....I am still trying to recover from that one. I would think twice about this in today's market.

I'm with you on this. We tried to UP our fees, and some companies were fine, but some we haven't heard from since. It's a fine line.

 

[yr2525]

I'm in Louisville, KY. Raised my fees by a small amount this spring and lost some 50% of my business even though client's said with the cost of fuel, it seemed reasonable. The average fee here is just a small percentage above what the AMC's pay for a URAR. Fees have been stagnant here for 10 years. We have too many appraisers competing for too little work. The AMC's have no trouble getting someone to do a 2055 for $150 and a 1004 for $200. I'm so used to being undercut that when I hear you guys talk about getting $350+ for a URAR, I have trouble imagining it's possible. The only hope I see, is that so many people drop out, fees will go up. Otherwise this is going to become a part-time job for house wives and retired folks. And I like everyone else, have resisted falling in with the AMCs because I couldn't keep my quality up and meet the turn times and still keep the better paying clients. So I, like others am thinking of other possibilities to turn a dime.

 

[glenn walker]

I agree , appraisal fees are way to low, I was getting $275.00 to $300.00 back in 1985 to 1995 era. Raised fees to $325.00 to $350.00 in 1999 to 2007 , 2008 try to get $350.00 and $400.00 FHA, but mostly getting $300 to $350 and not the $400.00. I have had afew large custom homes and those did pay $550.00 , looks like about now, the average appraiser in my area is working at $200.00 to $275.00. I really agree that $500 to $700 would be a fair price in California , but I think the Fees are going lower for lender work and this may become the standard , I am just playing it by ear and taking each appraisal on a "case by case" basis, some of the small tract homes are fairly non complex, the larger custom homes are that $500.00 minimum fee, as far as raising prices , I have tryed that in the past and it only worked durung the re-fi boom, in a slow market the borrowers and lenders are very cheap, and they dont care about the cost of gas. The HVCC will be very interesting , if it ever gets off the ground, we may all be at $200.00 ..."Yikes"

 

[liberated]

I see mortgage officers making some bank on deals that we make $350 on. Realtors clean house as well. Some kind of increase is needed. Appraisals take time and evern more mental energy. Thats all Ive got to say about that.

Appraisals take time, even more mental energy and a lot of liability; therefore, an increase is way past due (in my humble opinion).