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Appraisal Fee Adjustment --Cost of Research and Drive Time, Gas Cost Predicted to up

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Ray Miller

Thread Starter
Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Gas cost are increasing everyday along with all the other expenses of doing business.

Gas is predicted to be $3.50 to $4.50 per gallon by mid-spring in this area. Interstate gas pumps will be their standard ten to fifteen cents a gallon higher. In addition my trucks use the mid range gas. So I am another ten cents higher. I notice my new tires on my appraisal truck were $15 more last week per tire (same tire) then a year ago. Oil changes have increase, insurance has increase for the truck.

It appears everything that we are using has increase in cost. Like eggs, last year at this time we were paying 69 cents a dozen today that same dozen eggs cost $1.49 a dozen. The price increases are creeping up daily.

I work yesterday afternoon trying to establish a fair fee to charge for RURAL APPRAISALS I can no longer route a number of appraisals for the same direction for the same day. This increases our cost now for driving one direction, and doing the research on just one subject in one area. Before, I was able to split the cost between two or three appraisals thus charging less per appraisal. Now we have a full day of travel time for subject, comparables, research at court houses and township offices. If the subject is not what the owner says it is when making an appointment. You may have to go back to the office and pull new sales for comparable extending you time at least another ½ day or more. From start to finish I average around 16 to twenty hours in each report. Then I need to add in my cost of doing business ie: insurance (E & O, Gen. Liblity, Health, Commercial Auto, etc), auto expense ( truck replacement, oil, gas, tires, repair etc), office expense ( phone lines, lights, etc), vacation time, sick day time, holiday pay, utilities, CE and additional Education, memberships, convention travel and pay while away, publication, MLS and data base fees which are $500 a month, Realtor Association Fees which are $60 a month. Marketing cost for hard print and internet every month $1000 a month ( Law Journal, Web Site, Realtor Association Publication, Business Cards etc), Software expense around $140 a month, ISP fees. Bottom line is, If I do 3 to 5 appraisals a week or 12 to 15 a month now, what I use to do in a week. The cost of doing business looks to be about $290 an appraisal spread across a year. Then I have to add in what I want to earn. Twenty hours at $40 per hour which is just about bare bones now for other skill trades and professions. So I have I have $800 in labor/time in each appraisal. So around $1100 per SF Rural Appraisal. Some may take longer and some may take less time.

My questions how do you really stay in business at $150, $200, $250, $300, $350 make a living, pay expenses and do a good job on your appraisal reports in a rural area? How would you cut costs and my honest to yourself? What will cutting corners do for you, if you can produce a creditable report with all the necessary research?

How do you get your fees up where they need to be for SF Rural Appraisal Reports to make a living?
 
Last edited:

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
Ray, What an insightful post! I got an order from e..... last Friday, fortunately the home was not rural, just somewhat unique. They wanted turn time of one business day for a fee about $125 under my normal fee.

Because of my difficulties with certain authorities I'm forced to try negotiate these assignments when I'd rather just say no.

We arrived at a agreed upon price and I did the inspection on Friday afternoon. The homeowner was livid, she paid them around Five Bills for the appraisal and wanted to know that I was getting most of that. I told her it was against company policy to discuss fees....

The AMC made a little over One Bill on this appraisal. The report was completed with three like properties in this small community. The AMC reviewed and requested two more comps even though I had told them the property was unique to the area and there were no other similar properties. I ended up placing two more comps of a different kind to satisfy them, just didn't change my value and noted in the report the two extra comps were at the request of the AMC.

It's impossible in this area to get assignments at over $450 per, even with an hour or longer drive time one way. There are scavengers out there willing to do the work for free or close to it.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
It's tough, isn't it Ray?

I just quoted a 35 acre rural property for the large stagecoach AMC with a 4 to 5 day turn and $400 (about $100 less than I used to charge) and got a "thanks, we'll see if we can get that fee and turn time approved."

As the market continues to tank lender users should be paying more to well qualified appraisers rather than less to bottom feeders who compete by taking shortcuts.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Ray Miller;... said:
My questions how do you really stay in business at $150, $200, $250, $300, $350 make a living, pay expenses and do a good job on your appraisal reports in a rural area? How would you cut costs and my honest to yourself? What will cutting corners do for you, if you can produce a creditable report with all the necessary research?[/FONT][/SIZE][/COLOR]

For many, the fee options which you cite are better than having to hone a new skill in a new job: "Welcome to Wal-Mart!"
 

Ray Miller

Thread Starter
Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
For many, the fee options which you cite are better than having to hone a new skill in a new job: "Welcome to Wal-Mart!"


How long can they work for the low fees. Some where, some time they have got to go broke?

Or is it like a horseshoer I met a few years ago at a gas station. He said he was having a very hard time, his truck had broke down and he was using his girlfriends truck to shoe out of, but she needed it back. What am I going to do, was his question to me. My answer back was: "you have been cutting prices for the last three years in this area. Now you see the results. You can no longer afford to work and therefore, no longer cuts prices. I know where you can get a job cleaning stalls for $3 an hour." :fiddle:

Myself I would rather hone new job skills.
 

Kevin Keck

Junior Member
Joined
Jun 2, 2006
Professional Status
Certified Residential Appraiser
State
Ohio
I raised my fees $50.00 for a large AMC out of PA several weeks ago. Just too many new requirements and not enough cash. I have not received a request from them since. There are just too many appraisers that will work for low fees and they have created a cheap labor supply. It is best just to understand and accept the market. No amount of complaining is going to change anything. It is my hope that I can replace them with a higher paying client that doesn't value quick and cheap over quality.
 

Thomas Fiehler

Senior Member
Joined
Jun 2, 2003
Professional Status
Certified General Appraiser
State
Ohio
I had a call from another appraiser wanting to send me some work. Only catch was he was only willing to pay $75 per report. I asked him if he forgot the "0" behind the 75 or another number in front of it! Don't know why he seemed upset.
 

Kevin Keck

Junior Member
Joined
Jun 2, 2006
Professional Status
Certified Residential Appraiser
State
Ohio
I had a call from another appraiser wanting to send me some work. Only catch was he was only willing to pay $75 per report. I asked him if he forgot the "0" behind the 75 or another number in front of it! Don't know why he seemed upset.


I submit the above as evidence that an appraiser owned AMC would also suck.
 

AppraizinAZ

Junior Member
Joined
Dec 31, 2006
Professional Status
Certified Residential Appraiser
State
Arizona
What the hell is wrong with these appraisers willing to take less for their work?? Don't they see what happens when they do?? PRXXXCKS!!!
 
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