Some thoughts to pass along:
Attorneys will attempt to get you to do work for free. They can be subtle about the way they ask for info. I learned via the school of hard knocks this year to be extremely cautious in the future. I strongly recommend whenever an attorney contacts you about an appraisal assignment [that is not a legitimate
engagement] or request for info (which normally requires research time), that you start with a retainer (payment in advance) prior to doing any work. They charge their clients for similar work – you should also.
AMC assignments –
When I was graciously accepted as a trainee by my mentor, we were paid “X” for each assignment, and
more if the property was complex. Once AMC’s began to proliferate, we were paid ‘less than X’ for doing the same work … the AMC’s were stealing part of our customary fee to pay their overhead.
But since the Dodd-Frank law was passed, most of the better AMC’s now pay customary fees to
appraisers. My income per assignments is now back to “X” and in some cases ‘more than X’. But I ABSOLUTELY REFUSE to accept assignments for less than X.’ Those clients who don’t want to pay “X” can find someone else. That means ‘you’ who are afraid to charge more, but could earn more
if you would only ask for a higher fee.
I know appraisers in my area who are getting ‘better than X’ … in other words, paid more now than they were just a few years ago. This is because they stand firm on their fee.
The point of this is to evaluate your business practice. Then go to the foundry to get some brass. You can and should demand to be paid a fair fee today that is at least equal to or above what you were paid a few years ago before the stealing began.
Review assignments –
Many desk and field review assignments are being placed these days. Foreclosures on loans made in
2006+ have caused the GSE’s, FDIC and banks to re-evaluate the appraisals that were initially used to justify the mortgage loan.
Review assignments are not difficult, but they are more time consuming. Thus, your fee for doing a
review should be AT LEAST what your “X” figure is.
Doing 1.5 – 2x+ the work for .5 to .75 (or less) of a customary fee, and to take on the additional
liability, is ridiculous.
Too many appraisers have agreed in the past to severely low-ball the review fee, and that has rippled
through the industry. Frankly, if you are unwilling to charge – at a minimum - what your customary “X” fee is, then let someone else do the assignment. Only when all appraisers wake up to this will be when the review fees will move higher at the time of the initial request.
And from first-hand experience the FDIC and GSE reviews have increased reporting requirements. So be sure to carefully read the engagement instructions before agreeing to a fee in advance. These assignments often require extra data documents to be included within the report.
Associate with other appraisers –
Resolve this coming year – as early as possible – to get outa your bathrobe, bunny slippers and basement and actually interact with other appraisers. They really are nice people! Join your state appraiser association, join a national association, and try to meet with your local appraisers casually over breakfast, lunch or dinner during the year. (I can help you learn ‘how to do that if necessary.’)
Don’t discuss who the individual clients are, but do discuss challenging assignments and the type of work your peers do. Your peers are your source for referrals – both in and out. So don’t be afraid!
Associating with your peers is really a positive experience. Really!
Hope your 2013 is as productive in terms of income (or more so!) than ’12 has been for most