Questions Regarding Review Work

[SpartanAG]

As I've gained more experience in the appraisal field, I've become curious about review work. I'm trying to gather information from several sources to see if reviews are something I would be interested in and if they would be worth my time. If you don't feel like responding on the open forum, please feel free to PM me.

What do you like / dislike about review work?

Do you review both commercial and residential, or do you primarily focus on one or the other?

Do you do primarily compliance reviews or technical reviews?

How much time do the various types of reviews take you to complete?

Are you frequently asked to agree/disagree with the value in the report under review. If you disagree are you generally asked to provided your own value opinion?

What is your primary type of client?

How did you find your clients?

Are reviews a supplement to your appraisal income, or a significant portion of your income?

What type of fees are you seeing for the different types of reviews?

 

[Tim Hicks (Texas)]

I have done many reviews over the years. I don't do many any more because the fees offered are not worth the amount of work it takes to complete a review. I still do an occasional Fannie NUC review, but I will not do any AMC or lender $250 field reviews.

 

[Elliott]

I've done a few, too much work, too little fee, too much liability, and if the report is less than proficient, you end up doing a new appraisal report with better comps. I think one in 10 appraiser should do review work exclusively, then they could charge appropriately and do a competent job. Every time I tell an AMC I don't do review work, I know I've probably dodged a bullet.

 

[SpartanAG]

Thanks for the replies. My review focus would likely be on commercial reports with the occasional in-house residential review lumped in. I have no intention of doing residential reviews for AMCs.

 

[J Grant]

You might want to start by asking your existing clients if they assign any review work, and if so, what their need is, and if possible, an idea of fee range. Some reviews are bid out , on res end others assigned.

I have never done QC/technical reviews. I'd probably hate it, they tend to be low pay drone work (no offense but they are), though some would gravitate toward it who are detail oriented.

At one time I did a lot of 2000 form (field review) work, at fees that were rouglhy the same as If I had been assigned the appraisal on that property. There has been less demand for that kind of work in past several years and fees are lower if bid out from an AMC so I dont bother . A couple of my long term clients now offer me high $ reviews of high $ complex property appraisals, often a desk review but the review might be of two appraisals done on the property, not one. I supplement the form with a lot of narrative and usually end up doing my own appraisal within the assignment (comps etc).

Imo, the key is the reviewer should be competent in the type of property and area they are asked to review. In addition, a review can be challenged by the client, parties, the other appraiser, so there is a bit more tension around them . Like all other work the quality and expectations of the client impact how smoothly or not things go as well as pay proportionate to the assignment.

FWIW, the only time (I hope it is the only time, but am still working so who knows..), the only time I ever had a board complaint in my entire career was from an appraiser whose report I had reviewed. He took it personally which made no sense and his reasons for complaint ended up dismissed by the board, still it was nerve wracking. Very important to stay impartial and not get personal as a reviewer, but one never knows how someone will react so thats part of the risk of taking them on.

 

[J Grant]

On the high end work, I charge/bid aprox 2/3 of what I would charge for the origination appraisal.

Many feel that a review should charge more since it can end up being a lot of work. But, in my experience, it is not always possible to get that fee, because in a review, the bank or lender is usually paying out of pocket, vs a borrower /owner paying for appraisal.
Review work for attorneys might be very different as far as fees and involve court time and possibly be more lucrative. (and adversarial)

 

[Gobears81]

Thanks for the replies. My review focus would likely be on commercial reports with the occasional in-house residential review lumped in. I have no intention of doing residential reviews for AMCs.

Do you have much review experience now? If you've done enough, you might have a sense of whether you'd like to do more, as well as about how long they take relative to a "standard" commercial appraisal..
My review experience has been concentrated more on the eminent domain side, along with getting an occasional request from the assessor or individual. Very limited review work from banks. I aim for a fee that is essentially the same hourly rate as what would be earned on the appraisal side. For eminent domain, most clients want bids beforehand, so if the appraisal is solid and it does not require a separate value opinion in cases of disagreeing, we come out ahead, and the opposite is true in cases where the appraisal is substandard. Ideally, that bid will average out. In non-eminent domain review work, I explain to the client that if we disagree, the fee may be more than what a normal appraisal would cost, since it is a review, in addition to doing all, or nearly all, of the normal appraisal scope. Some of those clients often end up opting for a review of the methodology used in the appraisal in question, which often yields significant insight into the original appraisal, also.

 

[JTip]

Rule #1: you must be competent BEFORE you accept a review assignment.

 

[SpartanAG]

Gobears81: Thanks for the reply. I don't have a ton of review experience yet. Mostly just compliance level for lenders and mostly complex commercial.

 

[timd354]

On the high end work, I charge/bid aprox 2/3 of what I would charge for the origination appraisal.

I never did much review work because of having to compete with foolish appraisers who would bid less than what they would charge for an origination appraisal when a field review is more work and the fee should be more than what is being charged for an origination appraisal