Appraisal Referral and Lead Cost Survey

[Dzicc]

Hey all,



I am interested to know what you all think about appraisal referrals and appraisal leads costs.



If you have a minute, I put together a 10 question survey that I’d like to get some feedback on, and I will share the results with you all once completed.

For context, I have only ever paid a few referral fees and have no formal arrangements with other appraisers to do so but my understanding is that typically these fees are a flat rate (ranging from $25 to $100+) or a percentage of the total appraisal fee (ranging from 5% to 25%).



As far as appraisal leads, I have paid many ranging from $7 to $15 per lead. I would consider these leads to have been mostly unqualified leads (although advertised as qualified). Many times, I have paid a fee for a lead and the lead didn’t even need an appraisal but some other real estate related service or the lead needed an appraisal service that I couldn’t provide due to geography or credential (I am residential only).

I would really like to know how other appraisers think about referrals and leads and what other appraisers consider to be reasonable referral and lead costs.



Here’s the link for the survey: https://www.surveymonkey.com/r/8LJ3JKQ



Thank you all in advance and I will share the results afterward!

 

[Dzicc]

Here’s what I found:

1. I posted the survey on two separate national forums and also personally emailed the survey to 15 local appraisers that I know personally. Unfortunately, only 17 appraisers completed the survey. I’m guessing it was mostly the locals but it was anonymous so I do not know.

2. I may have made the survey a bit more confusing than it needed to be. I didn’t explain the difference between a referral and a lead and perhaps there isn’t one? My thought was a referral is more of an engagement-ready party and the referred work was completed before a referral fee was issued whereas a lead is paid up front and the party may or may not be ready to engage and the work may or may not have never been completed. I am probably wrong about that but, regardless, I did not specify that in the survey so I can understand why there was some confusion in completing it.

The first two questions of the survey read as follows:

1.Do you regularly pay appraisal referral fees?
2.Do you regularly pay for appraisal leads?

To me, the responses were very interesting. Only 1 of the 17 appraisers noted that they regularly pay appraisal referral fees and only 1 appraiser of the 17 noted that they regularly pay for appraisal leads.

I found this interesting because I was the appraiser (yes I also completed my own survey) that noted I regularly pay for appraisal leads but I did not note that I regularly pay referral fees because, to this point, while I have compensated another appraiser for work referred to me, I do not do so regularly. I have, however, paid third party services like Thumbtack and Home Advisor for years for appraisal leads. I found it interesting that another appraiser answered yes to question 1 but not question 2 and that every other appraiser responded “no” or “other”. The "other" description said “no” as well but the appraiser expressed concern as to whether an AMC fee constituted a lead/referral.

The rest of the survey centered around what type of referral/lead fee would the appraiser most likely be comfortable paying and how much of a referral/lead would they pay.

Given the options of a flat fee, percentage, and “other”, nearly half of the 17 appraisers selected “other” and many left comments.
Most of the “other” comments stated that they would not pay a referral/lead fee or would never pay a referral/lead fee.
Nearly half of the 17 appraisers responded that they would pay a flat fee and only 1-2 appraisers selected a percentage fee.

When asked how much of a referral/lead fee would the appraiser pay, the majority response was $0. The next most selected responses were $50 if it were a flat fee and 1%-5% if it were a percentage fee. None of these figures or the responses related to the fees were particularly surprising to me.

Ultimately, I wish more appraisers had participated in the survey but I thought the experiment was fun enough to try and the results were definitely interesting.
Thank you to all who participated! Here’s a link to the results (please don’t judge me for my poorly worded questions lol).

https://www.surveymonkey.com/stories/SM-60Apa11N1YxKKKfzw7u7JQ_3D_3D/edit/

 

[Terrel L. Shields]

I participated and am one who never had paid a referral per se. I usually had appraisal friends whom I refer things too and am just doing them a favor. And certainly, I would never pay for a "lead". I remember when some outfit was offering these leads and people were online complaining that they never actually got any work, it was more like "we filled that order last week", or, the lead was just some AMC wanting to fluff up their "approved" appraiser list. Banks do that to. They want every appraiser in the county to be on their "vendors list" for the benefit of the bank examiners, but in reality, only a handful of their approved vendors get any work. And if you did score such a one-off job from them, it is usually just that - a one-off complex and poorly paying assignment none of the regulars wanted to tackle.