Retainer or Not?

Retainer or Not? After All, We areLast 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.

Dave Towne
Image credit flickr - Chris Potter
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on

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21 Responses

  1. It depends on the relationship with the client. However, most fees are due and payable prior to report completion as a general rule in my private non-lending business.

  2. Avatar A. Brown says:

    Absolutely. Retainers are required from all clients until they have a payment history.

  3. Avatar Scott R. says:

    In my business model fee’s for private case work of any nature are due and payable prior to the delivery of the appraisal report. That includes attorney’s, accountants or anyone requesting an appraisal report. As for requesting a retainer, I’ve never done that but it’s probably not a bad idea if the fee is higher than a typical fee (which might be in the $500 to $2,000 range in my area. (a 5,000 sf home valued at $2,000,000 + is not uncommon in my area).

  4. Require non refundable retainer up front without fail. Even with old clients. I may trust them, but I cannot control outside circumstances that may cause them to cancel an assignment. Am I to just absorb what could be weeks of research time? No.

    On ALL orders $3,000 or less, I require full payment (used to be $2,500) in advance. Orders over $3,000 I’ll accept 50% up front with balance due on notice of report completion prior to delivery.

    On larger assignments there is a good chance that several days of research already took place in order to make a firm bid. A moderate complexity conservation easement related assignment comes to mind. Several weeks of very positive back and forth communications ultimately resulting in a couple hour meeting in person before final agreement was made and terms verbally agreed to. $12,500 down (non refundable) and balance due on completion. Six months after the retainer was received, the client has still not provided for site access, inspection, and other agreed upon documentary needs; and has not responded to written reminders.

    That retainer already compensated me for ALL research to date. I’m not out of pocket. The balance agreed upon is also enough to warrant completion of the proposed work any time over the next year or so, should the client decide to move ahead. I’ll continue to send out quarterly+- reminders of my willingness to proceed when they are ready to move ahead.

    THIS is why written engagement agreements and non refundable retainers are required. It avoids contentious issues down the road if / when projects are delayed without necessarily being anyone’s ‘fault’.


  5. Avatar used to bee appraiser says:

    Due to 57 years experience, I required payment in full for authorization to begin the job. my previous boss and several friends got jobs with half down, receiving only half pay for the job.

    I quote all jobs in written form, for my benefit and the clarity for my client

  6. Avatar used to bee Appraiser says:

    You must be clear about your client in legal matters, the client may not be the one who orders to report.

    The Attorney may be the agent for his client, not yours. BBBee careful, bbbee warry when collecting, or trying to collect a fee

    • Any licensed appraiser should know how to tell who their client is. If they cannot, then they are probably having USPAP compliance issues already. If there is an attorney involved that is either not MY client, or directly representing MY client, then I’m not discussing or communicating any details of the assignment to them. Frankly if they have not already (in their initial contact with me) explained what their specific interest is, I’m not even acknowledging that Im doing appraisal work for (my) a client.

      • Avatar don says:

        In bankruptcy court I had a client whose attorney refused to accept the report. He used the threat of my undisclosed value to negotiate within the court room. The opposing attorney did not call the bluff.

        Used to bee Appraiser, now just don

        • That’s got to be a rare one, Don. I had an attorney stiff me on a deposition once but only once (& I’m not done with him yet). I’m guessing no one called you as a witness in your scenario either or you could have disclosed the defaulted assignment conditions and revoked the report right then and there ‘for the record’. (I’d LOVE to try that just once).

  7. Baggins Baggins says:

    With waivers, we may need to start getting some retainers just for regular mortgage lending. Since the FNMA waiver program got moving, I occasionally have orders cancelled within days of receiving them, but the workfile is already printed and ready. Total waste of resources and paper. It’s not customary to charge a cancelled order fee in mortgage lending. Unintended negative consequences, yet again, fall on the appraiser.

  8. Avatar used to bee says:

    Since the late 1990’s I have used an engagement letter for all appraisals. This engagement stated who my client IS, The Standard appraised too, My fee and charges (per hour) for any requirements beyond the standards stated. AND most importantly my ability to collect any costs associated with defending my report.

    Most lenders accepted this as a clarification, those who didn’t, I didn’t accept.

    This letter was delivered immediately upon accepting the client, allowing time for them to cancel.

    I accepted a lot of odd ball jobs, some which did not meet standards, for some I agreed on a cancellation fee, instead of an APPRAISAL fee.

    Business goes on and we obligate ourselves to Standards long practiced, and published. We are also held to Standards perceived by competition.

    Do continuingly changing standards  promote a “profession” or do they make us “technicians” able to repair a loan officers problem.

  9. Avatar used to bee says:

    I used a different engagement for lenders, for foreclosures, for relo’s, etc. I would be glad to share this letter, however you should seriously make your own based on your experiences, and some advice from an attorney. I also included an “Addenda B” with explanations, standard exclusions, caveats, and a the loan I was appraising for including the loan ratio, the minim points paid by the seller and an interest rate. This statement frequently contradicted the loan, and I assume the agent threw it out, and kept the report missing the “addenda B”.

    Contack me at My e-mail, and I will respond with engagements; for loans, foreclosures, and relo’s

    • Baggins Baggins says:

      The mckissock classes on liability helped me totally reform my engagement letter. There is a lot of content there you can pause, click on, and type in, official fnma approved language, and other suggestions. Last round I took only complaint and liability focused, compliant focused ce, smart choice. Any use by any party not identified as an intended user is considered unauthorized use.

  10. Michelle Murphy on Facebook Michelle Murphy on Facebook says:

    I have been burned by a private appraisal the client did not like the results and I did not get paid! Now I require a fee up front before I put any work into the report.

  11. Avatar used too bee says:

    Many of us learned the hard way, as did other businesses. Some leaned the subject after trying to collect. That was a learning experience for both the appraiser and the property owner. Several of us tried learning before we were licensed contractors, gambling that no one knew the difference

  12. Rebecca McLeod on Facebook Rebecca McLeod on Facebook says:

    Money after inspection but before the report – always with private work and particularly anything that seems contentious. Divorces and contested estates are particularly bad.

    • Money at or BEFORE the inspection as a non-refundable retainer. IF split payment is accepted then the final balance should be collected upon notification of completion BUT PRIOR TO REPORT DELIVERY or results from disclosure.

      For fees of $3,000 or less, I require full payment upfront. For $3,001 or above I’ll take 50%-60% in advance and balance prior to delivery. It’s very rare that I get stiffed for an appraisal fee. Very rare.


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Retainer or Not?

by Dave Towne time to read: 1 min