How much I charge for a 7000 Sq-ft House

[Brian Adams]

Hi,
How much should I charge for a House which is 7000sq-ft and the valve will be approximately 2.5 Million. The property is in Sacramento Region of California.

Thanks

Brian

 

[Steve Wyrick]

First thing are you qualified to do the appraisal?

Does your license and your E & O cover up to that amount. Suspect you need to be a Certified Residential, if not better check with OREA.

As far as the amount goes, in Sacramento and area I am not familiar with, is a 7,000 sf home typical? is it in a neighborhood of similar homes with adequate sales of similar homes? If it is then charge your normal fee. If it is not then charge whatever you can get. Always remember, your fee should be based on what your time involvement is going to be and at whatever hourly fee you feel your worth.

 

[Brian Weaver]

I'm not sure I understand why one would need E&O that covered every property one did, dollar-for-dollar.

I certainly don't carry a $5,000,000 policy for the subdivision I did...not even for the $3,000,000 shopping center I'm doing now.

Just carry what's right for what you do.

As for the 7,000 Sq.Ft. house...is there enough reliable data to do a credible job in a reasonable time frame?

I don't take every assignment that comes my way.

If something is more trouble than its worth; it becomes worthless. A good thing to remember when contemplating a big job.

 

[spittman]

Brian,

You can't really base your fee on what the property is estimated at, but of course, I think it's safe to say one of the biggest part of the job will be measuring the improvements and listing all the amenities. I've done some pretty complex assignments for cheaper homes though. Think about your scope of work (measuring, inspection notes, comp searching, gas/ mileage, etc.) ... if you think it'll take you twice as long to complete vs. what you normally do, then why not charge twice the fee or at least 50% more. How many other assignments could you be working on if it were not for this one? When I research a property and things don't seem typical, my Spidey senses usually tell me to charge more. You sound as if you already know the assignment is complex. I'm also assuming your license allows you to appraise such a property.

 

[Richard Carlsen]

Brian

I know what I would charge for such a property but what my market will accept in fees is more than likely different than yours.

There is one topic that we tend to shy away from here on the Forum. That topic is the setting of fees. Don't want to awaken the anti-trust element out there.

I suspect that whatever you want to charge and what the market will allow you to charge are two different numbers.

BTW, appraising a 7000sf house is not the same as doing a shopping center. Just because I've appraised a multi-million dollar single family house on the water does not mean that I have the experience or the knowledge to do a multi-million dollar strip mall. Experience in residential and commercial does not run both ways based simply on value.

My advice is that if you don't know what to charge, call an appraiser friend who has the experience and team up with him/her if you desire to learn this end of the business. Otherwise, I'd stay with the commercial.

Just my 2 cents worth this morning. Have a good one!

 

[Carnivore]

Brian,

I try to estimate the amount of hard time I will invest in the subject. Typically for me, I start at double my typical cookie cutter residential fee providing the subject is in an urban/suburban area, is target rich with comps(so I only make one visit to the market area for the site data collection and comparable picture taking). The typical cookie cutter fee varies based on how long it will take to measure there palace. The measuering can be a major job on these expensive homes. I have been at a house as long as three hours. That measuering alone is worth $250 to me.

I seem to always get bushwacked on these things, so I now build in an aggravation factor of about 25%. For example, these people can be real pains, when it comes to scheduling! If its saturday, then there is a surcharge on top of the aggravation fee.

I think you get the drift. Just remember it nearly impossible to raise your fee once you start.

 

[Couch Potato]

How much work will it be?

Is that 7000 SF a 50' x70' two story box or something more irregular? Is in a neighborhood full of house that are 6000 to 8000 SF all on similar lots or is it the only one of its size for miles around? Since you already know the value before accepting the assignment, I doubt it is anymore difficult than a 1200 SF ranch from the 1960's.

 

[Mike Kennedy]

Ditto........

Excellent advice from Steve, Sammy, & Richard..........i.e. if unsure what to charge, then mostly probably have never done similar homes, link up with experienced pro, or refer it. $100-200. per square foot reasonable - fee not contingent on value estimate but complexity. Two to Three times the amount of time simply measuring accurately versus perhaps 1500-3000sf properties one may be experienced with. Expertise in local market for similar properties mandatory and compensated for by what the market will bear.

 

[The Warrior Monk]

Prices on larger projects are often negotiable. Start high; if they balk, negotiate.

 

[Restrain]

Give a figure that you think is reasonable for your time, effort and energy. Further, consider how many other appraisals you can complete in the same time frame. If they don't want to pay that, you'll lose money on the deal.