Strategies for raising fees

[J Grant]

A future sample letter to clients

Over the past several years there has been a rise of costs of doing business, as well as an increasing amount of time needed to complete an appraisal due to the expanded UAD.36 data fields as well as an increase in ROV considerations. These factors have led to a change in fees for a non complex single family or condominium appraisal to $ X amount beginning on X date/year.

I appreciate your business and look forward to continuing to working with your company. Please feel free reach out if there is anything you would like to discuss about the new fee schedule.

Thank you,
name

 

[J Grant]

I do not know when I will raise my fees, but it will probably come around when UAD starts being used , though honestly, it should be now, even though I do not do AMC work, even regular C and R is behind the times due to rapid increase in expenses and cost of living.

When UAD comes out and is in use - a strategic way to raise fees, for an appraiser to raise them across the board in fear of being dropped ( sad but true)- then raise them to every client except one, and see what happens. You will at least have one client sending work- though if all appraisers raise their fee by a reasonable % or flat increase due to UAD, the clients and end users will pay it. They can not drop us that fast for those who fear that will happen.

Appraisers have bent over backward keeping fees stable, which means low compared to expenses even at full C and R. The stakeholders, after a round of cuts ot our role are still stuck with us, at least for the next X years, so we might as well make a decent income. A fee increase is barely an increase, being that the fees on the residential lending side have been stagnant for so long. The rise of home prices has almost doubled, with RE agents and lenders who can charge a percent of sale price or a % of loan amount making banks, while we fall further and further behind, even as the rise of prices makes each assignment harder as homes become more renovated, added on, used for Air BNB etc.

 

[Trihard]

I do not know when I will raise my fees, but it will probably come around when UAD starts being used , though honestly, it should be now, even though I do not do AMC work, even regular C and R is behind the times due to rapid increase in expenses and cost of living.

When UAD comes out and is in use - a strategic way to raise fees, for an appraiser to raise them across the board in fear of being dropped ( sad but true)- then raise them to every client except one, and see what happens. You will at least have one client sending work- though if all appraisers raise their fee by a reasonable % or flat increase due to UAD, the clients and end users will pay it. They can not drop us that fast for those who fear that will happen.

Appraisers have bent over backward keeping fees stable, which means low compared to expenses even at full C and R. The stakeholders, after a round of cuts ot our role are still stuck with us, at least for the next X years, so we might as well make a decent income. A fee increase is barely an increase, being that the fees on the residential lending side have been stagnant for so long. The rise of home prices has almost doubled, with RE agents and lenders who can charge a percent of sale price or a % of loan amount making banks, while we fall further and further behind, even as the rise of prices makes each assignment harder as homes become more renovated, added on, used for Air BNB etc.

Expect a lot of trickery from AMC scum when asking for more money. You need to be ready to deal with their bull****. I have one AMC I do work for who uses appraiser fees against one another. So when you would ask for an increase per assignment they would say "there are other appraisers in the area that charge $400 for the report, so we can't raise your fee." Meanwhile, I'm sure they are telling the other appraisers that my fee is also $400 and they can't raise their fee's. It's a dirty game dealing with these companies.

 

[J Grant]

Expect a lot of trickery from AMC scum when asking for more money. You need to be ready to deal with their bull****. I have one AMC I do work for who uses appraiser fees against one another. So when you would ask for an increase per assignment they would say "there are other appraisers in the area that charge $400 for the report, so we can't raise your fee." Meanwhile, I'm sure they are telling the other appraisers that my fee is also $400 and they can't raise their fee's. It's a dirty game dealing with these companies.

I worked long and hard to get away form AMC work and spent personal money to support myself over the 3 plus years it took - and I continued to work for them until I could get out and have neough non AMC work so I am familiuar with thier scummy ways.

The appraisers still working for AMCs need to simply raise their fees; they will still compete against each other unfortunately in fee bids, but at least if they across the board raise to whatever percentage or level they feel compensates for UAD 3.6, they can earn a somewhat better living.

Note, I provided a STRATEGY to raise fees, such as raising fees to all bout one company, -leave those fees alone to continue to get work if the fear is so great of being dropped. With such low basement fees, what is there left to lose - you can always crawl back later and lower them.

 

[chad hampton]

You’re trying to raise fees against an oligopoly?

 

[J Grant]

You’re trying to raise fees against an oligopoly?

It's up to each appraiser. But if nobody raises fees, then appraisers need to stop complaining about it.

IDK what percent would work - imo a range of 20% is a reasonable start point, and well below the cost of living increase and rise in fees I see in other professions, which have risen 40% over the past four
It is not an oligopoly; it is more like aconcentrated mass of those who control vast volume, but even they can not fend off fee increases from virtually every appraiser.

I wish AMC staff appraisers would hold out for a better salary as well - they can not fire all of you all at once!

 

[glenn walker]

I would just start raising fees but not announce it or even say why. That just gives them time to look for a replacement. Remember nobody cares why you raise fees so you sneak them up slowly.

 

[Terrel L. Shields]

The only strategy that might work is for the sacrificial lambs to accept a low fee then hold off as long as possible and say the assignment is too complex and time consuming to finish at the fee offered then state a higher fee or you will withdraw. This forces the AMC to scramble to meet their own deadlines. Only if they have trouble on turn times will they offer higher fees.

 

[J Grant]

The only strategy that might work is for the sacrificial lambs to accept a low fee then hold off as long as possible and say the assignment is too complex and time consuming to finish at the fee offered then state a higher fee or you will withdraw. This forces the AMC to scramble to meet their own deadlines. Only if they have trouble on turn times will they offer higher fees.

I do not agree. That is sleazy and deceitful imo. The client might cave and give a higher fee due to the order being held hostage, but likely they will never use that appraiser again.

Appraisers just need to fight the fear, and the strategy I suggest is one I used myself over the years, especially as I weaned away from AMC work. If an appraiser raises their fee to half their clients, they have no fear because they are still getting work. Then they can sit back and see what the other half does. Of course, if nearly all appraisers simply raise their fees as UAD becomes operational, it would be easier all around. The clients are probably expecting it and will think appraisers are idiots for not doing it.

 

[chad hampton]

That is sleazy and deceitful imo.

You do know who you’re in business with, right?

We tried taking the high road and working in good faith for the greater good of the public and profession. We weren’t the ones who turned out to be lowlifes.