The forbidden subject - Fees

[Terrel L. Shields]

I see some complaints about fees at $Same as 1995 or so. OK, I agree. But at the same time, many banks are paying $400 to $450 for AVM appraisals, AMC appraisals, etc. The fees have gone up. It is just that so many people are willing to work for less and let some middle man make the difference. IF everyone refused to work for AMC's then we could charge more.

Further, I remember the days of dot matrix printers and filling out pre-printed forms that had to go just so so into the printer both L-R and Up-Down. All pix were glued, all Neighborhood maps glued, sketches were in Pencil, Cut and paste using the copy machine....Those days are gone. I can recall many reports that took 5-10 hours just to print and get right. The old M & S SF form was invariably done in Typewriter or by hand.

Yes fees are not keeping pace with inflation, but our productivity apparently is or we could not keep on doing it. Sooner or later fees will increase, but I expect constant pressure for fees to remain flat and I believe most appraisers need to expand their services and / or create a niche to reduce the amount they have to depend upon lenders for work.
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[Blue1]

I'm charging more now because the complexity seems to have increased. Gone are the "cookie cutter" assignments, they're done by AVM's (I assume). It's true that assembling an appraisal report is much easier but, it is more than offset by the type of assignment. I know of one appraiser that does nothing by complex assignments, takes in few jobs but charges accordingly....that "niche" market you're talking about.

In my market, there is a lack of available inventory which has caused a sharp increase in prices. There are many more buyers than available homes for sale, therefore, sellers are not having to use Realtors as much as in the past.....guess who the sellers are calling in order to determine what their home is worth? Yup.......another "niche" market! Hey, you want an honest opinion of value.....Who you gonna call...........That's right! And charge accordingly, remember your a professional.

 

[Tim Hicks (Texas)]

Different parts of the country have different fees, too. I still charge $325 URAR, $350 FHA, but I know some appraisers who charge $350, $425. In some areas they are lucky to get $275. In some areas (California?), I heard they get much more. I have not raised my fees, but my productivity is higher and my profits are higher. Alamode's functions save me valuable time and EDI saves me time, toner, ink and postage. Internet mapping, internet flood maps, internet census, DSL lines, MLS over DSL lines all save me valuable time. It takes me much less time to complete a report than in the old cut and paste and put on the copy machine days. Appraisers need to embrace the technology. I still see reports with rub on arrows and faded maps. I can and do deliver some reports the same day I inspect, if everything goes right. Yes, it is possible. Sometimes I don't EDI a report until the next day because then certain clients would think that I could do it one every order they send no matter how complex. I try to make every long term client I have think they are my only client. I tell them I will not raise my fees if they will except EDI and I point out how much quicker they will get the report. I also point out that since they are loyal, I will not raise my fees. If the AVM invasion takes over my fees will go up though, because then they will only need appraisals on difficult or complex properties. Why is it taboo to tell how much you charge as long as we are not price fixing or organizing a naitional price fix.

 

[Terrel L. Shields]

This happened in a few years ago. A local group of Surveyors were at a district dinner and social and someone suggested that they all ought to have a minimum fee of $400 to survey a lot and some of them agreed. No formal agreement, but anyway, lo and behold several began charging accordingly. Someone at the meeting told someone else and they in turn went to the district atty. Price fixing...I understand at least 3 surveyors were fined over the matter.

Now that may be more urban legend than truth. I donno, but I have heard it several times in this area.

 

[Tim Hicks (Texas)]

We can't even organize under one common appraisal association. Price fixing would be impossible in this profession. Our customers shop for fees and Joe Appraiser will charge $25 less to do any appraisal if he thought it would lure your client away. When it slows down and it will (I know, I know I have been saying this for two years), appraisers will start slashing fees trying to make up for lost revenue with volume. It happens without fail every time. Heck, when I was training, I heard my bosses cussing other appraisers for undercutting their fees. Now, I know for a fact, that they do 90% of STARS work in this area for fees I would not consider if it completely dried up. Well, maybe.... Why do they do it, shear volume and 12 appraisers. So everybody ignore my posted fees, I can't afford lawyer's fees for price fixing.

 

[xmrdfghap]

I think the discussion on fees is overly cautious. We have about 1500 registered users on this forum. There are around 100,000 appraisers (I heard this a while back somewhere, it could be wrong.....but FHA said when testing began they had 85,000 appraisers on their roles) in the country. 1.5% of an industry discussing fees does not translate into a price fixing conspiracy.

If, like the surveyors mentioned above, all the appraisers in a community got together and decided to set a bottom line figure, it would be different. That would be price fixing just as the NAR has experienced in numerous areas......but 1500 out of 100,000? Even if we all agreed that a certain price would be charged, there are too many appraisers in every community not on here that would not agree for it to be price fixing.

 

[rtubbs]

I don't think I have seen it on this forum or on the old one or any other one but, as it relates to fees and income, would there be anything wrong with having a poll that asked for various levels of income? I know Ann O'Rourke has reported on income surveys in the past. I'd like to see a survey on income/year and a separate one on numbers of appraisals/per year. Does anyone have a reason why it shouldn't be done?

 

[wyecoyote]

Terrel,

I had one a while back when I worked at another appraisal company. The order was through a AMC for a 2055 Interior. Our price was around $275. The HO asked at the finish of the work all that for $500. I don't know if this was correct but that was 2 years ago. I also know of one appraiser who charges $600 for a URAR. He mostly does commercial and litigation work. But said that if someone was willing to pay that much he would do it. He gets maybe 5-10 orders a month and his office staff takes turns doing them.

 

[Terrel L. Shields]

Which goes to show that we have little to sell but our honesty, integrity, and fee takes care of itself. Trusted, respected appraisers can command better fees.

Appraisers who do a true niche appraisal practice often can provide service at or below other appraisers fees consistently because they have the data and can reuse it. I do a lot of poultry farms and have some 40 farm sales in my files at any given time. If you had to research all your comps from scratch you would take twice as long as I will to do the report.

Recently an AVM company offered to do appraisals for $440 plus minus and do them within 24 hours. This was to the largest bank / mortgage co. in the area and they found it interesting but decided that since they were not being charged that much by appraisers they would continue the system they have. However, they are sending out in house appraisers (usually an older loan officer) to do evaluations for small loans backed by much bigger real estate parcels....LTV 20-50% and have reduced the number of appraisals they were ordering.

I agree that the appraisal orders we see are on average more difficult properties than say 5 years ago.

 

[Steve Owen]

I am not comfortable discussing actual dollar amout of fee. I think doing so might subject us to charges of price fixing (whether it would actually be possible or not). Appraisers operate under an economic model known as "the farm problem." That is, many producers of relatively homogenous product, but relatively few buyers. It is almost pure competition. I always tell callers requesting fee information: You can probably find someone who will do it cheaper, but in this economy every good appraiser is really busy and will not lower fees. Are you sure you want to hire someone who would do it for less?

One aspect I didn't see mentioned in this thread is the pdf reports being done now with digital signatures. Where you used to be able to do appraisal work with a typewriter and glue, now you have to have digital cameras, high speed internet connections, fast computers, scanners, etc. Surely, digital e-mailed appraisals should be worth more than printed ones to support the additional costs. This is in addition to the extra complexity mentioned before.