Now Would Be A Good Time To Get Those Fees Up

[Doug in NC]

Appraisal fees essentially haven't risen in my market area since 1993. Everything else has gone up with inflation, why not appraisal fees? If fees had increased just an average of 2% per year for the last 20 years, we would be getting a fee of $490 per appraisal right now (I'm getting that and more on many orders right now but only because they are complex assignments). I can think of three reasons standard fees have not risen: 1) over-supply of appraisers 2) an AMC industry that has exploited the appraiser supply to suppress those fees 3) appraisers who don't value their own worth and have been complacent to accept sub-par compensation for their services.

Lately, there is talk that the industry has a shortage of appraisers. Some act as if that is a bad development. I was nearly forced from this industry in the past 3 years, and I'll be the first to admit that a reduction in the appraiser force has been a great thing for me personally. I generally won't accept appraisal fees at what the AMC industry has determined is the current standard. I ask for a better rate and generally get it. If enough appraisers will start asking for what they're worth, standard appraisal fees could be increased by at a third or more in a very short order.

When is the best time to raise your fees? During the peak of the appraisal business, which is right around now for many appraisers. Sure, we'll never rid the industry of the many bottom dwellers who defend their acceptance of ridiculous low fees, because that is their business model. For the majority of us though, getting our appraisal fees increased is as simple as asking for it. This is especially true for those of us who are very busy right now. The AMCs use market forces to keep our fees low, there is nothing wrong or inappropriate for us to do the same (but increase appraisal fees) to improve our profession.

 

[miktay]

I have a lot to say about this topic, but my current high demand (with high fees) don't allow me the proper time to respond.
Hopefully some of the retired folk can chime in.

 

[hastalavista]

The best time to raise fees is when the market supports it.
The best time to lower fees is when the market demands it.
The decision to raise or lower one's fees is made in the context of their business model.
From the appraiser's business model perspective, the feasibility of sustainable higher fees, in theory, has no limit. The feasibility of sustainable lower fees, in theory, has a floor.

The last one I raise fees on are my well established clients. They, in turn, are usually the last ones who look for a reduced fee from me.

 

[bnmappraisal]

The last one I raise fees on are my well established clients. They, in turn, are usually the last ones who look for a reduced fee from me.

Good point!

 

[Pilgrum]

I've been offered fees of $500 + recently for a 1004 on a simple residential property. Does anyone think those offers are going to decrease anytime soon.

 

[OSU Beavers]

LandSafe just offered me their "Market Fee" of $425 for a 1004 SFR. I told them that was the fee in 2001.

 

[Doug in NC]

The last one I raise fees on are my well established clients. They, in turn, are usually the last ones who look for a reduced fee from me.

And your established clients probably aren't bottom-dwelling AMCs, who have the highest demands but expect their appraisers to accept the lowest possible fee.

 

[Doug in NC]

It's really not beneficial for the lenders to have their AMCs auctioning off appraisal assignments either. By the time the fee dickering is done between the appraiser and AMC, sometimes 2-3 days of time are lost.

And what do low fees get the lender on review assignments? The appraiser who sees the job only as a quick paycheck, the faster he/she gets it done, the more the appraiser makes. So that appraiser isn't going to go out of the way to add new comparables and offer their own suggested property value. In essence, good appraisal reviewers are punished by having to do more work for the same low fee, whether they sign off on a value or have to produce their own defensible appraised value conclusion.

 

[factsandtruth]

My average fee for 1004s for the year is $475..cookie cutter.

 

[Gioia3707]

Cookie cutter base fee $450 for 1004 lender work/ $550 for 1073. If they want more than the VA standard it just goes up from there.

Some say I'm crazy, but I have had two week backlog for 18+ months.