No College Degree for Cert Generals or Residential Appraisers

[J Grant]

Prices are prices. Claiming that appraisers should charge $1K for a simple appraisal because the value of a home has increased is nonsense. Makes just as much sense as the price of TV's.

Well I never said here that appraisers should charge 1k for a "simple" appraisal because the value of a home has increased. None of this has anything to do with TV prices.

The fact that home prices have risen, and the fees of nearly every other professional have risen, is a comparison for our field. Even a "simple" appraisal is more involved these days. Appraisers are underpaid, imo 1k is too high for regular apprasials but they should be north of $600. $750 would cover the time, but likely there would be pushback on that increase from a common $525-$575 range. There is a lot more scrutiny on appraisals than there used to be, more steps, more challenges in ROV, etc.

The situation is further compounded for appraisers who do AMC work, where modest fees in the hundreds, not thousands, get cut in half.

My tax prep guy has nearly doubled his fee over the past four years and the same for my IT support person. Imo those two professions have some parallels to appraisal. Trades, same thing - the plumbers and electricians charge over 60% more now than four years ago.

 

[glenn walker]

Quite possibly one of the most ridiculous statements made on this forum in a while...OTOH, I have Nando on ignore so I could be wrong.

According to this, a relatively simple $1M appraisal should cost about $2K. Wow.

A Million Dollar home in many of
the Counties in California is a 1,200 square foot stucco box located on
a 5,000 Sq.Ft. rectangular lot with street view. These are Easy Peasy cookie cutters and nobody pays $2,000 but more like $450.00 to $550.00 or 2055 exterior drive-bye for $250.00.

 

[Mike Ault]

Not around here. Agents make maybe 1/2 that... and then they'd split with their respective broker. Besides, the avg. broker makes less than the avg appraiser in this area. 6% around here is a thing of the distant past. Besides, if you have broker envy, you should follow the money if you think its easy. Its really not. I owned a brokerage for 5 years prior to getting my appraiser's license; I've seen the problems up close.

Maybe Grant should be in the television marketing and pricing. In 96 my 32" Tube type TV cost $1,200. Today you can get a 65" flat screen for $299. To follow her logic, the TV should cost about $5K.

I understand, my father started his brokerage in 1959 & a substantial number of my family members have been involved various aspects of real estate in the local area as long as I've been alive. To go back to Terrell's example, however, whatever the realtors were splitting up at the beginning of his sample they were splitting up 3 times as much at the end of his sample. And the hapless appraisers involved in those transactions got no pay raise whatsoever during the same time frame even though their cost of living and doing business increased at almost the same rate as the value of the real estate did.

 

[Mark K]

I understand, my father started his brokerage in 1959 & a substantial number of my family members have been involved various aspects of real estate in the local area as long as I've been alive. To go back to Terrell's example, however, whatever the realtors were splitting up at the beginning of his sample they were splitting up 3 times as much at the end of his sample. And the hapless appraisers involved in those transactions got no pay raise whatsoever during the same time frame even though their cost of living and doing business increased at almost the same rate as the value of the real estate did.

If you're thinking that brokers are making 3X or 4X what they used to, think again. There are a LOT more brokers today and many are working out of their homes without an office and they're taking 1-1.5% and are happy to do it. When I look over the MLS sales I rarely see one of the large brokers' companies on the list/sale agent portion. Most are independents being paid at a large discount compared to the 'good old days'. No brick/mortar office, no management, just a laptop and some E&O, maybe.

Again, I'd say to anyone with broker-envy, feel free to try it for a while. Appraisers don't make good brokers. The best 2-3 brokers in this area are retired teachers. They understand the touchy-feely emotional side of the business while appraisers tend to talk about the logical side. Appraisers are pointing out the roof pitch or the 6" wall with extra insulation and the brokers are pointing out the pretty paint job, the darling flower beds, and the updated counter tops. Never mind that train track 50' behind the house...the trains don't come by that often.

According to the stats, the avg broker makes less in this state than an average CR.

 

[RCA]

Nothing to worry about. We are in a state of flux for the next couple of years. E.g. JP Morgan says it cannot "commit to a binary outcome." Nobody knows how this going to end at this time. AI "seems" promising, yet it is still a VERY risky tool to use.

Fannie Mae should go slow on UAD 3.6. Honestly, I think they are probably wasting their time. And, most of all they are wasting other peoples time.

 

[Terrel L. Shields]

the hapless appraisers involved in those transactions got no pay raise

The appraiser is the only one in the transaction who cannot price their services on the basis of the risk. As we have seen time and again, a single lawsuit can bankrupt an appraiser and cost them their entire career as well as reputation. Realtors OTOH have little risk if they don't conceal the truth about their listings. The sole factor that is the biggest risk is the price of the house.

And for many of us outside of Fort Rich, CA a 1,200 SF home is well under $200,000, and a million-dollar home is often 4,000 SF, complex with features that were unheard of or unseen in 1993. I remember the first time I saw a house with an elevator, a walk-in freezer, 16' ceilings, solar panels and backup generator. Or other features like a mixer built into a cabinet, remote controlled ceiling fan. I appraised a 9,000 SF house with a theater, indoor pool, 4 levels, and boat dock and it sold for less than $1 million on a lake. Find comps for that. If the deal falls thru, do you think your liability is not huge? The threat of a lawsuit is the cost of doing business and I don't care if you think E & O is always going to save your bacon. It isn't. Risk is or should be half the fee. And a big complex house like above is far more than 8 hours work, closer to 20. So, I'd say I got a premium over a regular cookie cutter but I d*** sure didn't make $100 an hour something that I probably would make on a 1,200 SF cookie cutter.