Front & Center

Story of My Appraisal Fee is Told to the Consumer, Not Buried on Page 26

The story of my fee! Disclosure of my Fee is Front & Center

Remember those dreaded book reports in grade school? Remember the oral presentations in front of the class? We did not think much of it then, but this was the beginning of public speaking. Fast Forward to today: Our appraisal reports are similar to those dreaded book reports except there is no oral presentation, no public speaking. No way to BS your way through it because you only read the Cliff Notes, not the actual book itself.

We have come a long way and today we write reports that speak to the reader. No Cliff Notes, no text to highlight, but reports created by us based on our observations and research of the market. The standard forms do a simple basic function that are nowhere near adequate to tell our story, so appraisers expand to addendums, charts, graphs, photographs, etc. Appraisers tell the story of the property and the neighborhood.

When USPAP was revised a few years ago requiring appraisers to disclose prior service, the software vendors all came out with a USPAP Identification page. I, like many others, chose not to use this form and simply place my disclosure of prior service elsewhere in the report. After all, our reports were long enough. Last week, The Appraisal Foundation issued a Q & A on this very topic. I actually took the time read this one as there were discussions on this very topic recently in some forums and there was definitely a division of opinions.

Well, I must thank the Appraisal Foundation for clarifying what is expected and required. Not because I discovered I may not be in compliance by not having my disclosure as a signed certification, but I discovered a missed opportunity; a missed opportunity to tell another story. A Story that has absolutely nothing to do with the value of the property; the story of my fee!

Many states require the appraiser to disclose the fee paid within the report. I now use the USPAP Identification page for the prior service disclosure. I also utilize this page as my fee disclosure. You see the center portion of this page clearly states:

“Comments on Appraisal and Report Identification
Note any USPAP related issues requiring disclosure and any State mandated requirements

Well my State requires I disclose the fee I was paid for the completion of the appraisal. Not only is my fee disclosed in this section, it is highlighted in BOLD type and is a larger font size. This page is now the very first page in my report!

My fee is Front and Center on the very first page. The story of my fee is told to the consumer, not buried on page 26.

By TJ Everett, Certified Real Estate Appraiser


Image credit flickr - Todd Van Hoosear

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20 Responses

  1. Avatar Coach says:

    Same here TJ. My invoice is on the very first page.

  2. Avatar Mike says:

    This is a great idea. If you are not doing this already, you should be.

    • Avatar Eric West says:

      Agree. Isn’t it ironic that appraisers have to disclose everything under the sun but when it comes to their  fee, amcs don’t want it being discussed with the borrower or included in reports?

  3. Avatar TruthBTold says:

    Good stuff. Will implement! 

  4. Avatar Fritz Vogel AGA,CRS,CEI,GRI NY Cert. Appraiser 27yr says:

    That’s a great step forward. Take any opportunity you can take to disclose fees. New York is not a fee disclosure state. The Banks “own” New York, Wall Street is and always has been in New York. So I do not have that opportunity to broadcast the fee disparity AMC vs My Fee. I do believe that all of the AMC’s do not let you put your fee or invoice anyware in a report. Unless, required by individual states. NYS, I’m sure will be one of the last if at all, to request fee disclosure. But, for those who CAN REPORT,  DO IT!

    • Baggins Baggins says:

      Honest disclosure is always the preferred disclosure. If a company refuses to allow honest disclosure, what trickery is next?

  5. Avatar EJ says:

    Just getting ready to send my 1st one out. 15 font & double bold. We’ll see what happens. I bet they come up with something about page order now.

  6. I nominate TJ for Hero of the Week! Well done, sir!

  7. Baggins Baggins says:

    In CO we no longer have to sign agreements or indemnification forms to work, that was the real blessing.

    Do not disclose what you were paid.

    Rather, disclose what you billed. Normally you were not paid yet so use the term; The appraiser has billed:

    They came for the data, not the bill, front page disclosure is bragging. Disclosure in the middle, invoice at the very end or separate.

    • Avatar don says:

      TOOO true

      • Avatar don says:

        One common question when testifying is ” have you collected your fee yet”.

        My most embarrassing situation when representing my appraisal in court, was when the opposing appraiser charged twice as much as I, and had his testimony struck by the judge for not proving a cap rate.

        Being professional is partly defined among business schools, ” As being able to set and collect fees”.  Does this make AMC’s more professional than appraisers?

        • Mine was a report that was submitted after discovery deadlines (it took that long). Judge disallowed mine; accepted oppositions and another report from our ‘side’ and we all expected conclusion to be mid point between the two reports.

          Judge found value to be exactly as I reported it AND quoted verbatim from my ‘disallowed’ report for her reasoning! They may disqualify data for technical reasons, but they can’t unlearn what they have been exposed to. Another reason to do the best work we are capable of doing.

          • Avatar don says:

            Worse than that: An Orange county judge, judged my fee too high based on the inferior work of two other appraisers. My fee was $3,000 and he cut mine in half. The others were under $400.

            Do the best we can is a great statement. Such is the day that is our only solution, I couldn’t even vote against him as he is in a different county.

            It changed my collection policies.

            Merry Christmas

  8. Ross Grannan on Facebook Ross Grannan on Facebook says:

    I got reemed out by an AMC when I told a borrower how much my fee was because they were visibly upset on what they were getting charged. As far as I am concerned this should be part of the disclosure to the borrower, everything else is in there, fee to the attorney, title search fee. My USPAP instructor said blame it on Dodd Frank and keep my mouth shut. I say BS on that, that doesn’t help when I am in the borrowers house, I think it is a cop out.

    • Avatar TJ Everett says:

      Every opportunity I get, I explain the process; the amc middle man etc. I also mention that state law requires I disclose the fee I receive for the appraisal within the report. I tell them where they can find my fee in the report. I have not discussed fees with the borrower, I simply give factual information on why it is in the report and where they can find it. Nothing more.

    • Ross concur BUT your fee with client is one of those grey areas. DF says they cannot prevent you from disclosing it in report but not discussing it with client is a different story. Why not a modification like TJ does? “Mr & Mrs Borrower I have no control over what fees the bank and management companies charge under the category of appraisal fees above my own fee, which is disclosed in the appraisal report. While they cannot forbid me to disclose it in the report, their assignment conditions are that I not discuss fees with borrowers and I am bound by that requirement.”

      • Baggins Baggins says:

        Interesting but no. If the lobbyists would not have adulterated the new HUD1 form, there would be clear line item separation of the appraisERS fee and the total appraisAL fee. Two distinctly different items these days. Some rules are meant to be broken. So I simply never changed anything, that’s what I did. Order comes in, order is printed to a folder. The subject address, owners names, and my fee are highlighted. I never changed a thing. And when questions come up, the folder comes out. I don’t have to show it or point to it, the highlighter does that work for me. Simple but effective non digital tools are still superior to this day. Per the comment from Ross; Sadly to this day many appraisers errantly believe their duty is to the lender, not the public trust. Duty, a legal obligation. We are not agents or representatives of the lender or their affiliates. You will not lose your license for disclosing your fee, that’s like way way down on the matrix penalty list and is not even clearly defined so depending on the complaint if that were to ever happen, it’s not even a clear issue. Tell me one appraiser whom has been penalized at the state level for sharing the fee with the borrower in a refinance or sale situation. Go ahead, show me one example.


  9. Avatar don says:

    I used an engagement letter accepting the assignment. This included my fee, the Market Value, the price of any extras included from the basic FNMA standard. Most of these items were included in a AIREA seminar by a Tucson MAI in  1989. I  formatted it as a bid demanding acceptance from the client. The Form report included various standard inclusions and explanations (such as Measuring methods, Source of verification, etc.)

    Once in a while a client declined due mostly the charges at $100/ hour for the non FNMA requirement. This was useful in deciding who was a qualified client, and when there was a discrepancy in the measuring method.



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Front & Center

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