Why I don't get paid when the loan can't be closed?

[Dale Smalley]

Are you doing an appraisal or are you helping them get a loan.

COD or have a signed agreement to be paid no matter what happens. If you are appraising on a contingency basis you may be in big trouble.

 

[Mike Garrett RAA]

Some of us are in a position where we MUST accept assignments without up front fees, ie.. VA panel work. Many lenders collect the fee at the time of application which also precludes us collecting at the door.

Great idea for individuals and refinances where you have not established a relationship with the client. We try to do it as much as possible; however, it still doesn't preclude the check from bouncing!

 

[bobburnitt]

Of course you would extend credit to clients you have a relationship with, and VA. That goes almost without explanation. I have some people I have worked for before that will pay, but they are very, very few in number, and they send me very little work. The area I am in is such a Good-Ole Boy clique, machine, racket, I'll scratch your back-if you will scratch mine situation, that I get almost no work from local clients. I have lived in this little community for 44 years and I am not one of the "insiders".

I have been self-employed nearly my whole adult life, and I have learned one thing, more people will pay you than will screw you **but** the number that will not pay is high enough that they will put you out of business everytime. They will make your life miserable. And with enforcement being nonexistant in our "profession" the lender coercion thing is always there. Having the money up front sure makes a difference in that situation. "Don't like the value, get another opinion. Have a nice day" click.

When I tell some people I must have the fee up front they go into a tirade about how "big" an outfit they are. Then I ask "are you bigger than Wells Fargo?" They usually say no, and then I tell them I don't work for WF anymore because it was taking me a year to get paid. Wells Fargo is fee at the door to me. If they say "we have already collected the fee up front from the borrower, I say "Great, mail a check to me today, and I'll get started, by the time I complete the assignment the check will be here and I will ship your report."

The three main reasons for not paying the appraiser up front are [in my experience & opinion] are #1 so they can ride you for 3 to 9 months even if they intend to pay you, #2 so they can pressure you to hit value, and #3 so they won't have to pay you whether you "hit value" or not.

Your business is your business, carry whomever you like, I will be doing something else while you are chasing YOUR money.

BB in Texas

 

[Mike Garrett RAA]

Bob, it sounds like you have "issues" with most people and most things. Perhaps this isn't the best profession for you since it is basically "client" driven.

As to the "Good ol Boys"...could it be the "clients" know their work, respect their work, and rely on their work? I appreciate the fact that it is difficult for the "new guy" to get assignments; however, I also see many of those "new guys" being the ones who cut the corners and hit the numbers in order to compete.

Getting work isn't usually the most difficult part of "marketing"...it's keeping and satisfying our clients that is.

I wish you well!

 

[bobburnitt]

I have an issue with doing work and not being paid for it. In Texas you have no recourse when it comes to collecting your fee if a lender stiffs you.

At the moment I have two complaints filed with the Texas Savings & Loan Department against mortgage brokers that owe me money. The Savings & Loan Department is who licenses these people. These brokers collected the fees up front from the borrower and absconded with the money. The S & L Dept contacted me and told me they were going to stop processing appraiser filed complaints. Also the Texas Legislature fixed it where real estate appraisers, accountants, and some other people, too numerous to remember, can no longer file leins against homes for their fees. And furthermore, mortgage bankers are not licensed at all in Texas, so you have no recourse with them whatsoever. In Texas, if you don't get it up front, you may never get it.

My experience has shown me that the number hitters rule, that is what the majority of "clients" want. You are correct when you say this is not the best business for me, I have told several people that if I had known what I know now, I would never gotten in this "profession" to start with.

My integrity gets in the way with the crooks. I have some people that want honest appraisals, but there is not enough of them to go around in this area.

Anyway, I do honest appraisals, I follow USPAP to the very best of my ability, I am continually going back to school to improve my skills, but I don't do the number hitting thing, a lot of folks don't like that. And I don't work for free.

BB in Texas

 

[Mike Garrett RAA]

Touche'. I agree, no one wants to work for free. Like Texas, Colorado has no licensing mechanism for mortgage brokers and most likely will not get it any time soon. The banking lobby is much stronger than the appraiser lobby.

I have real heartburn about encouraging new people into the business. That said, I still faciliate the registered appraisers course here in my market. At least they hear the truth with no smoke blown up their, ahhh, ahhhhh, a.... anatomy! It is much like real estate sales, only 20% survive the first 3 years. What is important is that they hear what could happen to them if they don't follow the rules. For that reason, I invite the people from the Real Estate Board to come down to the Springs and speak to my students. I also tell them if I ever review their work and find they are acting dishonestly, fraudently, or in a careless and negligent manner I will turn them into the state without hesitation.

 

[Judy Whitehead (Florida)]

The only thing worse than working cheap is working for free. Most of the time, we simply say "We prefer to collect at the door," if it is a client we haven't done business with before, and they 99.9% of the time say, "That's how we prefer it, too." Those that don't agree to that can look elsewhere.

 

[Blue1]

I find most of my clients very good at seeing that I get paid. Once you develop a relationship with a good client, there's little worry about being paid. I partly agree with Bob and partly agree with Mike. That is, one has to watch one's back, so to speak, but, at the same time, be flexible enough to devlop good, lasting, ethical business relationships. It's really an art if the truth be known. Mike, I think the "good ole boy" network that Bob was referring to are the ones that have been in business "forever" and are used to doing things "their own way" with "their own people." At times I have found unethical behavior being swept under the rug and being protected by closed lips. I think this is what Bob was referring to. Luckily, in my area, these "networks" are few and far between and everyone knows who they are and there are enough ethical folks one can have as clients.

P.S. If a Realtor or lender asks you if you "know the ropes" run like the wind.