Comments on: How Much Do You Charge for a 1004?

By: Susan Wolfson

Susan Wolfson — Fri, 14 Nov 2014 00:52:31 +0000

Re-doing a report that you made a mistake on IS NOT DOING A REPORT FOR FREE! Its correcting a mistake. Wrong picture of a lot? Well, why take a picture at all? The most anyone can see from a picture of a vacant lot is that YOU KNEW WHICH LOT YOU WERE APPRAISING!

We DO have a LOWEST PRICE. Its the price that the VA allows us to charge. Why do we use that as our LOWEST PRICE? Because, as a veteran owned business, we feel that NO ONE should get a home appraised for less than a VETERAN has to pay for an appraisal. Its a matter of personal / moral / business ethics.

Therefore, we calculate the fee for any NON VA work based on the scope of work, the complexity of the assignment, the size of the home, the size of the site, and the LOCATION.

We do NOT DO a $1,000,000 home for the same fee as a $100,000 home.

We look at our expenses to complete an assignment, we consider what other professionals charge, we decided we were worth at least $50 / hr. That translates into what the VA pays us for one appraisal that typically takes us 1+ day to do. All others go up from there.

Also, while the correct form is supposed to be up to the appraiser to determine, if the appraisal is for loan origination to sell to FNMA THEN it has to be on a 1004 or other FNMA form. In that case, it is NOT up to the appraiser to determine.

And FYI MIKE FORD, a residential appraisal “that does not require a residential certification”????? NO SUCH ANIMAL!

By: Mike Ford

Mike Ford — Fri, 25 Apr 2014 19:49:10 +0000

I liked the consideration of complexity rather than letting the form type used dictate the fee. I don’t want this to go off to far afield, but as appraisers we bear responsibility for maintaining our own professionalism. I do not ‘do 1004’s’ at all, or quote fees for them. On the other hand if they are talking about a non-complex, sfr for loan purposes in accordance with FNMA guidelines, including a market conditions addendum for a transaction amount that does not require a residential certification, to be reported on a 1004; I can give them a quote following some of Dustin’s other rough guidelines.

It is a mistake to allow clients to order “1004’s” or anything else by form number. They order appraisal assignments of varying complexity and varying property types. They may prefer a 1004 but it is ultimately up to us to analyze the property assignment and determine if that is an appropriate form format for the assignment at hand.

Why am I being picky abut this? Because as long as we allow lenders and clients to think appraisals and their complexity are form driven they will continue to think “OK, it only takes them two hours at most to complete a 1004; and 15 minutes more for a 1004MC.” In their minds that portion of an appraisal is worth no more than $40 to $50. Somehow they neglect the analysis aspects; or verification process, or supporting our findings or reconciliation.

Finding out the ownership interest(s) in real property that we are being asked to appraise is supposed to be our first step-not which form or fee to charge.

By: Baggins

Baggins — Thu, 31 May 2012 18:50:10 +0000

Sorry forget to say: Really enjoyed the article. Thought provoking with a side of inspiration. Thank you for the well written article.

By: Baggins

Baggins — Thu, 31 May 2012 18:49:13 +0000

This article is well vetted. However it does not tackle the motivation behind the discounted fee request from the other side of the desk. The cost savings from reduced costs of appraisal services are not passed back to the customer/consumer. Rather the amc approach is to co mingle total appraisal fees, thereby creating an environment which creates variable opportunistic profit through downward fee pressure. / To put it simply with the walmrt analogy: I’m not reducing my fee if such reduction means a profit incentive (thing of value) for me to be assigned the order. Were cost savings being passed back to the customer, discounting would be more acceptable. Can you still call it a discount if it does not equate to cost savings and the borrower still pays a constant rate regardless of the appraisers fee? As a customer, when a vendor charges less for their product, you get to see those cost savings right? Would so many still shop there if the reduced vendor pricing merely equated to increased company profit and the product purchaser viewed no cost savings? / If you mailed these guys a hundred dollar bill back for every order, it would be clearly a thing of value. The industry has yet to tackle the ethical challenge of why discounting beforehand to create the 100 profit incentive ahead of time is not considered providing a thing of value. Clearly, the amc’s send the orders to the appraisers that all else being equal, provide the amc with the largest profit margins. They have a right to make profit, but I wonder what right the consumer has to save a buck when the cost of the service is reduced. Not one dollar of appraisal cost savings get passed back to the borrower. When amc’s abandon the preferential assignment based in individual order profit and move to a cost+ system instead, the aggravation of these overly competitive fee issues in a potential restrained trade environment will be greatly diminished. Then cost savings will be actual savings, and discounting is each appraisers individual business decision without undue bias. / My 1004 fee? 350/450 for most of them, and like Mr Harris states: Each order and order scenario needs individually considered. $250 is right out, considering the borrower is still probably being charged $500, regardless of my discount.

By: Ex Kentucky Appraiser

Ex Kentucky Appraiser — Mon, 07 May 2012 08:57:54 +0000

If you accept appraisal assignments from ANY AMCs you are part of the problem. If you’re declining ALL AMC orders or sitting out the biggest cluster f*@$ in the history of appraising you can be proud of yourselves.