Retainer or Not?
Last month I asked appraisers if you ask for a retainer when doing vacant land private assignments, which tend to be more difficult than private ‘home on dirt’ residential assignments.
For those who do private assignments on GP forms (NOT the stinking GSE forms!), do any of you request a retainer from the prospective client before you start the research?
I do a fair number of private assignments, with about half of those vacant land (unimproved) assignments. Those are more challenging than ‘home on dirt’ assignments.
Lots of initial research and perhaps a site visit is necessary before committing to a fee and report delivery. Sometimes the prospective client does not like the outcome of that research or the proposed fee, and cancels the potential assignment.
So I’m considering charging a retainer of roughly 20% of the resulting fee to begin research.
Have you ever done that or considered getting paid for your initial research time?
After all, we are “fee” appraisers, not ‘free’ appraisers.
Many readers misinterpreted my initial query, thinking the question related to all private assignments.
However, the vast majority of direct and forum-based responses (around 130 or so, which I’ve read) indicated that, yes, most appraisers either get a retainer for assignments over a certain total fee, or else paid in full – either up front or else prior to report delivery.
This indicates to me that asking a client to either pay fully up front or else “½ down, ½ prior to report delivery” is an acceptable practice and no appraiser should be fearful about asking for payment.
I always get a full pre-payment for SFR private assignments, but the vacant land assignments have been a point of concern for a long time.
No appraiser should do copious amounts of work on an assignment under the client pretense that you will be paid at the end of the process. Ask for ‘something’ up front. And never do a private assignment, offer a verbal conclusion, and then expect payment.
The second part of the responses were that many appraisers start with an engagement contract, which is a wise practice in most situations.
Thanks everyone for your responses, insights and comments.
- The Unbiased Reality of Census Tract Data Dump… Open Letter to FHFA - August 15, 2023
- Isn’t that Just PAVEY! PAVE Response and Marcia Fudge - August 8, 2023
- ‘Pesky’ Words. Keeping Appraisers out of Language Purgatory - July 26, 2023