Let’s Talk Fees
How different fees can affect an appraiser’s income.
OK, before you lob spears and bricks my way, we can.
This is not a ‘public event’ filled with associates in an open meeting setting. In places like that, the FTC takes dim view of any fee discussion, fearing price fixing and collusion.
But privately, fees can be discussed among peers, with no agreement that any certain, mandated fee be charged by everyone. The gubmint can’t stop you from talking with an associate.
For weeks and months, appraisers across many of the forums I read have been discussing the need for appraisers to get their fees up to an appropriate level – for their area – not influenced by the rock bottom barrel scraping fees often expected by the lower tier AMC’s who don’t direct-place assignments, and fish for lowest fee and fastest turn time.
This past week I have had two separate private ‘discussions’ with appraisers. One said this:
I’m charging and getting $1,000 for FHA, $650 for standard assignments. The AMC model is broken. They drove off appraisers with starvation fees. Now they cry when they can’t find anybody. Raise your fees – it has never been a better time.
The other said this:
I have received requests for appraisals from AMC’s, quoted my fee and turn time, and never hear back from them. Several days later, even weeks later, I see the same property being solicited by another AMC. I go through the process again, and sometimes they accept my quote, sometimes they don’t. THEN, I see it a third time from yet another AMC! And, on occasion, from a fourth. SO, by the time I accept the offer it has been a week, sometimes as many as three or four weeks, since I first bid a fee and turn time on the property.
Once I do get the order, I call the Realtor, inform them of the site visit (appointment) date (usually 2 weeks out, sometimes less) and I get “we have been trying to get this appraisal for weeks, a month, etc.”. So, I have to explain the number of times I have seen the solicitation from the multitude of AMC’s looking for cheapest and fastest and inform them that had the first AMC accepted my terms, this would likely already be done and to the lender!
So there’s the problem with turn times! It’s not a lack of appraisers or the appraisers work load out in these rural areas. It’s the AMC’s shopping cheapest and fastest.
A few weeks ago, an appraiser in Sacramento, CA posted on his blog an article about how different fees can affect an appraiser’s income. I decided to make an Excel spreadsheet of my own, which I have attached. A portion of that is shown here:
This spreadsheet graphically demonstrates how a certain level of income is dramatically affected by the number of assignments necessary to be completed, on an annual and monthly basis. It’s really obvious a higher fee will yield the same income by doing FEWER reports. Doing fewer reports lowers the stress level, and the hours worked on assignments!
Open the spreadsheet, and play around with it if you like. Save it on your computer. Send it to your associates, etc. – but give me credit if you do.
It is designed so that you can change the fee amount, or the income amount, and the table line or column will update accordingly.