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Fee Collections

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Steve Gish

Sophomore Member
Joined
Apr 28, 2003
Just finished another day of class, boy do I have some doozies for you guys…

Overheard two people talking,

1) “so and so did 97 appraisals last month” “Still doesn’t have a life or girlfriend” “No, works 70-80 hours 7 days a week” “He better slow down before he burns out” “Yea he’s been hitting it hard for a year now” :angry:


This is a broken up, brief synopsis of a 2 minute conversation I had with an "experienced" student on a break…

1) "I heard you tell that guy, don’t plan on getting a paycheck for at least 60-90 days after your first appraisal is done.” "Yep, title companies and LO’s don’t pay until loans close” “It took over 6 months before my income stream to level off after that first paycheck came in. Last month I played 27 rounds of golf, I love this job”

2) “Thought you had to be licensed as a trainee to appraise?” “In Kansas No, not if someone will accept your work. I’ve been working for 18 months, will take state test (unknown which one, I ASSume trainee-license test) next week but had to finish the one pre-license class first.”
“Ya don’t say” :eek:

3) “I have $1200 in uncollected fees outstanding for over 6 months, I'll probably just write them off.” “Why don’t you do them(appraisals) COD?” “Because there are so many appraisers, they will just find somebody else…there’s one guy in our office who has over $18,000 in outstanding, uncollected fees.” “Ya don’t say” :huh:


Lot’s of strange stuff here, this one guy was just FULL of information (I didn’t say good or accurate information). I’m mainly interested in the outstanding fees problems, is this REALLY this big a problem? Is the market THAT saturated with appraisers?

Can a person REALLY do 97 appraisals a month? (AVM’s?) (2055’s),
I'm just trying to sort things out. What say ya'll?
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Steve, .....Sounds like you are being exposed to some of the realities of this trade with those over-heard conversations by others. Sure, there are folks working really really hard and burning the candle at all three ends and feeling so great about being so over-worked...and then they get into a car wreck for lack of sleep, or get real sick because they are so weak, or lose their spouse because they do not spend any more time with the family......and I'm still not that impressed. Yes, it is really a good feeling to have a steady flow or work, and that feeling comes and goes with the flows and the ebbs, and there are ebbs ! Yes, it is really nice to have the phone ring off the hook and the fax burn-up and to have everybody "wanting" you.

Anybody who boasts of having $18K worth of un-paid outstanding invoices is.......a blithering idiot. It is insane to take absolutely every assignment, and NOT consider the c.o.d. payment option, and to allow clients to string you out because of their totally inefficient payment protocols. No, it does not have to be a pay-at-closing scenario. For these types, the closing only starts the 60-90 days b.s. merry-go-round, as one waits all the more. It does come down to who controls who, and who lets that control work against them because they are not willing to confront the abusing client......because they might cut off the gravy train. What gravy train ? It appears that person loves to work without GETTING paid ! Lunacy, but clients really do LOVE that kind of appraiser. Better client s are out there and the process of finding them can take a long time.......and in 5 years I have found a few, a small few, and a long string of one-night-stands......because I did not know how to make-value and make-happy. I have no qualms about pursuing a c.o.d. or client pre-pay arrangement for out-of-state and first-time clients....especially anyone who pastes some estimate of value all over their faxed order or in their phone conversation. These are the folks who will hang you out to dry, big time. They are full of promises then, and great to "promise" you all kinds of work in the future.....if you could just "let this first order be invoiced, because they have not run that pre-pay by their borrower". More than likely the client has already collected your appraisal fee up-front....so should really be no problem for them to send you your check today. Some might, many will not......and if that was the contract arrangement, then you should not send in the report, nor discuss the report until the check has arrived and cleared. Oh, how mean and dastardly we appraiser must appear !

Some markets are saturated with appraisers. I live in one. And, all the while, in the background, the vast pool of clients is working feverishly to develop databases with info from our completed report, and with the availability of on-line county databases, etc. the automated valuation tool does move forward with the overall desire to eliminate the field appraiser.......because they "charge" too much. I hope you can determine early-on what an appropriate fee structure in your market should be.....and then do not waiver from it. Volume, schmolume. I'll bet that guy you heard about, with the $18K of un-paid invoices, probably arranged a "discounted fee" plan for volume work.....and can now look forward to REALLY getting taken ! "97 appraisals last month" ?, thats more than 3 per day including Saturdays and Sundays ! If they were one to have turned in a work-log to their State for that interval of time, it would probably show a logged effort of 29.5 hours per day ! Best of luck to you, Steve. Hang around the Forum, you'll learn lots.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Welcome to appraising, Steve!

Now you're beginning to see why we 'appear' negative.

You've just met the appraiser enemy. Illegally performing appraisals (unlicensed and bet someone certified is signing his junk as 'did' inspect!), either grossly exaggerating the number of appraisals they're doing or cloning with no research and hitting whatever number they are told to, absolute idiots with $18,000 in receivables,......

It does go on and on. Now you're beginning to see.

I love what I do, I hate the way I have to do it sometimes. From your previous writing about your mentor, I believe you are with a good one. Sounds like the others in your class are in sweat shops with no ethics. Now you are beginning to see what we forumites are fighting against. I really, really don't want people like you've just described in appraising. I don't know how to stop this flood.

Not all are like that as you've already found here. Just way tooooo many. Those are the ones not found here on this forum.
 

Steve Gish

Sophomore Member
Joined
Apr 28, 2003
From your previous writing about your mentor, I believe you are with a good one.

Oh Pam your an angel, the individual I converse with most is my instructor. I can't FIND a mentor in KC. My mentor/mentors are right here in the forum for right now. I would love to find a mentor that works mostly (but not exclusively) in the commercial field (I could work the SFR's he doesn't want once I'm trained) but that's a pretty pie in the sky hope at this point. I want to move into commercial work and or rural property eventually, that interests me :D We're getting ready to have a TON of county tax fight work here real soon, I'd like to learn and get in on some of that as well. Assessments skyrocketed around the KC area this year, 200%+ in some areas.

I about fell over when that guy told me about the outstanding fees... Gotta wonder how a guy plays a round of golf (as a trainee) EVERYDAY it's not raining, and makes a living. :blink:
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
I about fell over when that guy told me about the outstanding fees... Gotta wonder how a guy plays a round of golf (as a trainee) EVERYDAY it's not raining, and makes a living.
Got me..... he still living with Mom????

I don't have a major collection problem. Maybe have a couple or few every year, but it is not a big problem. The only time I seem to get stiffed is on finals, that are not final...... so it's MY fault they didn't close. :rolleyes: I make sure that my fee is clearly known, and that the request is clearly spelled out before setting the appointment. I won't even crank the engine in my car if payment arrangements have not been made. Got to have a good clear engagement letter so if they don't pay, you can win in court! ;)
 
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