Increasing Fees

[starmansf]

Yes, you are part of the market: the supply side. If you can't supply your service at a competitive price there will be less demand for you.

 

[Bedrock]

Your clients don't care what your costs are; they only care about their costs. Raise your fees and they will go elsewhere. In appraisal jargon its called the principle of substitution.

Maybe it is time to get new clients, clients that respect you as an appraiser and value you as a business associate.

 

[tom mack]

Full disclousre; Last fall, I raised my fees, which were at market rate, not below, for a basic SFR, non complex assignment. I not only retained all of my clients, I gained three more local banks, two attorneys and a financial planner's office along with their staff. The point of the thread was not to waste keystrokes, but to solidify a feeling or notion that this profession is heading into two groups; Those who get paid what they are worth and those that are prolonging their demise by cutting their fees in hopes of retaining a client(s). I think Mark K gets it along with Ray Miller and a few others. You have to price your fees at a certain level that allows you to run your business as a business. Ask anyone who has had to testify in court concerning their report and you will soon realize that for the most part, we under price our services every day. I have already made a decision to once again raise fees which will put our office into one of the higher priced appraisal companies in the area. I will see what happens in terms of clients, but I will not cut my fees in order to retain any client. I am telling you, the reports we produce and sign our names to have more liability than working retail. And God bless the retail workers.

 

[starmansf]

Good luck.

 

[Ray Miller]

Good luck.

Its not a matter of luck, it a matter of sound business pratice that allows one to stay in business and charge a fee that will cover the business expense, a return of investment and a return on investment.

Cutting one fees is not a sound business pratice.

I think if one will shop Wal-Mart you will find the better part of their retail pricing is at or above the norm in some cases.

I think if you check the burger joints that have one lost leader, but make it up on the fries and coke. That being the double cheese burger for a buck. I would almost bet that is also a profit center as well.

 

[starmansf]

I guess if you live in a rural area where everybody is on a first name basis, you're right. In the big city, where there is no shortage of appraisers, life is different. I have no idea what its like in Indiana, Wisconsin, or Alabama (and I have to add New mexico here); but in California you'd starve with your pie-in-the-sky notions of fairness. This isn't exactly bare-footed, kissin'-cousin territory. These people would laugh at your fee schedules and price increases. You'd all price yourselves out of business.

 

[Mark K]

I guess if you live in a rural area where everybody is on a first name basis, you're right. In the big city, where there is no shortage of appraisers, life is different. I have no idea what its like in Indiana, Wisconsin, or Alabama (and I have to add New mexico here); but in California you'd starve with your pie-in-the-sky notions of fairness. This isn't exactly bare-footed, kissin'-cousin territory. These people would laugh at your fee schedules and price increases. You'd all price yourselves out of business.

I will absolutely guarantee you that in your sophisticated, big city there are appraisers making a good living. But then, they have taken the initiative, spent the time and money to take the classes, get the necessary experience, to rise above the bottom rung of the food chain in the appraisal business.

Our notions are not about fairness, they're about supply and demand. Luckily, most appraisers have not moved past F/F form-filling and because of that, some of us are reaping the benefits. This train wreck in the mortgage business hasn't exactly been a secret, neither did it happen overnight. There's been plenty of time in the past few years to prepare for the current changes in the industry. If, like some appraisers, I was fighting for the appraisal scraps in the residential mortgage lending business, I'd be looking for other work.

 

[Mike Garrett RAA]

Isn't if interesting those who want to market their services at the lowest possible prices also like to demean other appraisers who refuse to be part of that process?

 

[PropertyEconomics]

Isn't if interesting those who want to market their services at the lowest possible prices also like to demean other appraisers who refuse to be part of that process?

Thats life in the "big city" ...

 

[Mike Garrett RAA]

Yeah but you love that VA gravy train don't you? I missed getting on the panel by a hair 20 years ago. I did get on the FHA panel though and milked that sucker for years. But my former partners got on both - FHA and VA.

RE: "But the worst is....twice as many appraisers and they are willing to work for less."

Oh come on now - you made good money teaching AB1/AB2, right? Milked that for all it was worth? What's a few extra appraisers here and there?

Believe me, being on the VA panel is no gravy train...at least not in my market. Question? Why did you quit trying to get on the panel? Did you ever personally meet with the valuation officer at the regional center? Did you resubmit your package annually?

I tried for 7 years before being accepted and that was after I had 5 years experience. The VA has expanded the panel substantially...try again.