Determining What to Charge for Appraisal Fees

Have you ever asked yourself why gasoline prices seem to fluctuate so dramatically?  Maybe it’s the weather.  Perhaps it is a conspiracy in the Middle East.  Surely the politicians are to blame.  To be sure, the correct answer is complicated and likely multi-faceted.  There is much that goes into what your card is charged at the pump, but not much the common man probably understands.  You can bet however that those who make these decisions do indeed know and understand how it all works.  Have you ever wondered why a Big Mac will set you back $3.99 at McDonald’s, yet any size soda will only cost you a buck?  Rest assured, these decisions are not determined on a whim.  Successful businesses understand costs and thus are able to properly determine correct prices to remain viable in the current market.


appraisal feessWhat about appraisers?  What do you charge for your services?  More importantly; why?  If you received a phone call today from a potential customer for a standard appraisal, what would your fee be?  Would it make a difference if it were an attorney, a homeowner, an AMC?  Does the type of assignment or even the type of customer play into your fee decisions?


As appraisers, we spend a lot of time complaining about our low fees, but where do those fees actually come from?  Why is $350 per appraisal a common number in many areas?  Who determines fees and how?  Is it tradition?  Is it just because that is what it has always been?  Are they set in concrete?  Can we realistically change/raise them?  We have the idea that appraisal fees are what they are and cannot be changed (like touching the Ark of Covenant), but does that perception meet reality?  Maybe it is time for us as business owners to step back and get to the basics of costs and fees.


Within any business, there are hard costs and soft costs.  Hard costs are basically the same every month.  They include things such as your building rent, internet access charges, payroll, MLS membership fees, your cell phone bill, etc.  Though they may fluctuate slightly, you can basically plan on paying the same fee for them month after month after month.  Furthermore, these are costs you incur whether you do 1 appraisal or 100.  Soft costs, on the other hand, are different.  They will change based on your volume.  They include such things as gasoline, print cartridges (another reason to go paperless), contract labor, taxes, and vendor portal usage fees.  There are reasons to like and dislike each type of charge.  Business owners like hard costs because they are predictable. They can be planned for.  On the other hand, when volume is low and times are lean, hard costs are difficult sometimes to satisfy.  Soft costs are liked because they are easier to pay when they come due.  A high volume means a high income to satisfy obligations.  Yet, they are not easy to budget for because they are so volatile.  The big question here is, do you know what your hard and soft costs are?  I am not asking if you know the definition of the two. Rather, I am asking if you, as a business owner, know your own numbers.  Do you know how much you spend every month in hard costs?  Do you know how much, per appraisal, you spend on soft costs?  The answers to these questions are essential if you expect to remain in business long-term.


The above measure is not as difficult as it at first might appear.  Begin by either getting out your receipts from last month and going through them or just go to your Quickbooks (or whatever financial software provider you use) and start putting purchases into two categories; hard and soft costs.  Do that for at least two other months from earlier in the year to give an accurate picture.   What?  You don’t track your expenses that closely?  Well, now you know where to begin.  Once you have the data you need, it is now time to start analyzing.  Don’t worry, you are an appraiser.  You can do this!


Once you have determined your hard and soft costs (as well as a realistic monthly estimate of your volume), it is now time to look at your competition.  Do you know what Mary T. or John D. Appraiser down the road are charging for a typical appraisal fee?   It would be ridiculous to determine your fees without a working knowledge of what other appraisers, doing similar type work in your area, are charging. Otherwise, you could charge whatever the devil you want.  Fact is, you live and work in a capitalistic society where competition matters.  Charge too little and you go can’t cover your expenses and still have something at the end of the day to take home to your family.  Ask for too much and your potential clients will simply choose a comparable appraiser whose fees are less. You have to find a happy medium.


Though there are a lot of moving parts here, there are essentially only two, main components (determining costs (both hard and soft) and knowing your competition).  The problem here is that I dare say most appraisers look only at the latter and pay very little (if any) attention to the former.  It is not easy to accurately determine your soft and hard costs.  It takes work.  With so much else vying for our time, this portion often gets neglected.  Do not allow it to.  If you need to pay an accountant or financial genius to help you out, do it!  It will be well worth what you put into it.


It is in step 3 that the real magic happens.  This is where you must finally determine what your fees will be on a typical assignment.  Frankly, some guesswork must play out here.  Though you have some hard numbers on your costs and a pretty good idea as to what your competition is doing, you still have to determine what it is you will do.  If I could offer any advice at this point, it is to aim high.  You might be surprised at what the market will actually sustain.  Maybe you have always charged $350 per appraisal and you can indeed make a living at that amount.  What would it do for you and your business to raise that fee to $375?  Too much?  What would even $365 do for you?   Would your clients sustain you in such a minor change?  There is only one way to find out?


So, what determines your success in finding the perfect fee in order to run a successful business yet not be constantly passed over for lower fees being charged by your competition?  First of all, it is not all about numbers.  I assume that, like me, you do not always go for the cheapest product or service out there.  Successful consumership usually means not picking the highest prices, but not choosing the lowest either.  The old saying that you get what you pay for is usually true.  Normally, I look for a mid-level product for a mid-level price.  As an appraiser, there are ways to make your product superior to all of your peers yet not necessarily charge the highest fees.  Even in the world of AMCs, your end product does indeed matter. Your clients do care about your quality and turn time.  I know.  I know, but they really do.  No really, they do!


Over the past several years, I have been able to successfully develop a business model that allows us to work more efficiently, but not cut corners in the meanwhile.  Sometimes it is called working smarter rather than harder, but it essentially allows us to be in a different league than our competition.  We are able to keep our costs at a minimum, our productivity high, our quality control strict, and our fees in line (if not slightly less) with (than) our peers.  Know your costs.  Understand them intimately.  Be aware of your competition.  Understand not only their fees, but their expertises and weaknesses.  Merge these two components and you will know exactly where your fees should be.  This is a key to a successful appraisal office in today’s challenging appraisal world.

44 thoughts on “Determining What to Charge for Appraisal Fees”

  1. Pingback: Determining What to Charge for Appraisal Fees - Appraisal Buzz

    1. First, my fee was $425/appraisal in 1994. I have been down the road of figuring “hard” and “soft” costs, or as I think about it “fixed” and “variable” costs. While it is a useful exercise, it is absolutely unhelpful in obtaining fees. I have finally had success in raising my fees by about $150/appraisal by giving up, not caring, and being a grouchy old man. That is to say, I have given up on caring what the AMC’s, lenders, and other users of my service think about my services. I have given up on caring whether every hole in my schedule is full. When pressed by anyone wanting my services on the cheap and fast, I become very grouchy in a hurry. I currently say “no” to nine out of ten inquiries or propose higher fees and longer turn times. — The upshot of this is that by saving schedule time for better paying jobs, I have time for better paying jobs (obvious when you think about it). Rather than cave into that panicky feeling that comes when my schedule looks empty, I hold tight for higher paying jobs. And it works. I’ve been over 4 weeks out in my schedule for several years with an occasional mid-winter slow down. My lowest fee for a land appraisal is higher than what most appraisers get for a full FHA appraisal. I figure my fees based on my estimated hours of work, plus more for distance. I don’t cut corners on my analysis and writing time. I make more now than I did at the market peak back 10 to 12 years ago, and I’m working less hours. I strongly suggest getting ticked off and not caring as an approach to marketing……

      1. You Steve, could be my twin brother, you are doing what I have been doing for 2 years now. I have had so many low life AMC call me, and the first thing out of my mouth is My fee is $400 and up, and if you don’t like it, go find a cheep appraiser. The second thing to them do you shop by low bid when you need a Dr. All my good clients that truly want a good appraisal, and me to spend the time to do it right are VERY Happy paying my fee. And one more thing stop giving into underwriters that make request that have nothing to do with value, another reason I don’t work for AMC’s . “Mother’s don’t let your kids grow up and be underwriters” Title of my book when I write it, along with ” 100 most stupid request from underwriters”

    2. I should imagine that most appraisers have a handle on income versus expense when it comes to running an appraisal office. Although there are some exceptions, most bank related clients control the fees with a take it or leave it attitude. If you have not had the opportunity, I recommend reading “Real Estate Appraisal – The Death of an Industry” by Hamp Thomas. It was written three years ago, and the situation has not gotten better. When I started my own company 20 years ago, I would receive at least three resumes a year from peoples wishing to enter the profession and start field work training. I have not received one resume in the last ten years, and I don’t think it’s because I am a mean boss! With the average age of a real estate appraiser in the United States well into their 50’s and many leaving every week, I can only assume that our profession is nearing its end and AVMs will rule the day … Yes, Very Sad!!

  2. Enrique T. Casado

    Very good. I would be illustrative for some folks to have a nice chart explaining your thoughts. Just an idea.

    In general, thank you for this article. I am sure it seeded some minds.

  3. I just tested the waters on one of my lower fee clients. I cited business reasons and gave examples of the range of fees my other clients are paying me while assuring them I valued our business relationship and although I sweated it out for 24 hours they came back with an agreement that the higher fees would be honored. If we would all do this while the market is good and there is a lot of work it would put the pressure on them and also assure more reasonable fees in the future when there may not be as much work.

  4. Garland Tredway

    My normal fee in Jefferson County is $550 up to $1,250. Texas is a non disclosure state. Our reports in 2005 were 15 pages. Our reports now are 42 to 45 pages with all the questions the lender want today. I get this fee every day & turn down 50% of business every day. $350 was what I charged at 15 pages.

  5. I have been appraising for well over 20 years now and I have always calculated the cost of doing business. If you don’t want to take the time, look at your NET profit from your tax returns from the last several years. This might surprise you and wake you up. We were all getting $300.00 for a 1004 appraisal, $250.00 for a 2055 and $450 for FHA over 23 years ago and we took 1 picture of the front one of the back and one of the street. There was no 1004mc form, no UAD to deal with, no 3 year and 1 year history searches. No logging in and uploading reports as all of the reports were saved as a pdf file and sent via email. It took approximately one third of the time to do an appraisal and gas was around $1.25 a gallon, not to mention everything was much much cheaper. Hardly anyone carried E&O. Times have changed dramatically and we appraisers have acted like a bunch wussies and basically have given everything away. Every time we have been forced to do additional work that requires more time (1004MC, UAD) we role over and play dead and just accept it without every charging more for our time. Appraisers used to make really good money which we should be able to, after all we are licensed professionals and our service provides a very very important level of protection to welfare of our nations lending system which affects everything. Just look at the financial meltdown of 2008. That is how important what we do really is. Therefore we should be able to make a decent living for our selves and our family’s. As a result of everything I have mentioned here, Today most appraisers just barely pay the expenses it cost to be in business and have very little left at the end of the week, month or year. And I do disagree that we can make it on $350.00 per appraisal, not at todays cost of doing business. You might survive for many years at those fees but who wants to just survive, I for one would like to have a little left over after all the bills are paid. I have made the executive decision that if I can’t do much more than pay the bills as an appraiser it is time to do something else. I have been steadily raising my fees over the past few years and I am getting enough work at the higher fees that I don’t have to do as many appraisals to just pay the bills. I have to admit even at the higher fees I still usually have to work 50 plus hours per week if I have anything left to show for my efforts. Here is the reality, We are the only ones that can do what we do so if we all decided to charge a thousand dollars they would have to pay it or they (the lenders, the AMC’s, etc) would all have to close shop. It is that simple, again we are the only ones that can do this legally. Just Food for thought. I appreciate you bringing this important topic up. If every appraiser took a good hard look at all the facts available and took a good look at the fees in their area many years ago and more importantly took a good look at their expenses or their net profits, I would be willing to bet almost every appraiser would be increasing their fees, after all we serve an important function and we are licensed professional and we should be paid and treated like the professional we are.

    1. R. Haynes – It would be great if all appraisers could band together and agree on higher fees. That would be called “collusion” and I think that is illegal. Good thought, though. I’m all for higher fees!

  6. My records say I was earning a standard $350 an appraisal starting around 2003-2004.
    Back when I first started this business, inflation was a constant companion, if you didn’t raise your fees, before you knew it you couldn’t *afford* to stay in business.

    I remember a discussion with someone I was about to start subcontracting from; He offered me $XXX per job. I ran through my costs with him, including average total mileage, depreciation on my car, travel time, time at the property, time getting photos of comparables, time for write-up, MLS fees, paper, ink, film & developing (pre-digital days), etc., etc. I literally showed him that, at the per-job rate he’s offered, I’d be making something like 20% over minimum wage. At that rate, why not take a minimum-wage job? I couldn’t afford to work for him. Since my figures were realistic, he saw the light, and we agreed on a much higher “split”; We worked together for several years.

    If you don’t know your costs, you’re liable to either work much longer and harder to bring home a decent income, or, you’re going to notice that you’re falling behind, and owe Peter, Paul, Bob, Ted, & Alice $$$.

    If you want to make more money, when is the best time to raise fees?
    In the middle of a downturn, when there’s no business? Of course not.
    Obviously, a better choice is when you’re “busier than a one-armed paperhanger” is the time to raise fees.
    In the current marketplace, if you haven’t raised your fees yet, you’re “leaving money on the table”.
    This is business, and not charging what the market will bare, is foolish. Give yourself a raise.

    BTW…. This business is cyclical, it *regularly* goes bad. You have to make a good dollar today, and put $$ away so you can get through the lean times; remember the Old Testament story about the Seven Fat years and the Seven Lean years? No different today. Act accordingly.

  7. I believe us elder appraisers understand this better than the younger appraisers. We have all been complacent at times, which allowed the lenders and AMC’s to set our fees. I have always wondered how AMC’s state they average surveyed fees in a particular area are $325 to $350 for a 1004 product. No one ever called me from a survey group. When one of those AMC guys calls me, the first thing I ask is the fee and turn time. One they say $325 and need it in 3 days, I tell them that I have been doing this for 40 years and they must have performed their survey 20 years ago. After this long in the business, I don’t need any practice. If they want my services, they need to pay for it. Sure they can find some appraiser to perform the assignment who is struggling to get business, and meet their fee schedules and ridiculous turn times. I think they have the mentality that we are just sitting around waiting for them to throw us a bone so we can run out to some property that may be 40 miles from the office so they can have it back in 24 hours from inspection. Then expect us to sit by our computers so we can respond to any questions about the appraisal submitted within 4 hours, add additional comps, ect and be excited that we will receive $325 for our time and efforts. We need to get over our fears of loosing business to fees and turn times and begin acting like the professionals we are supposed to be. Good article, and the younger guys need to take a closer look at this if any change is going to take place.

    1. Recently have spoke to a loan officer in Montana. Base Fee for a 1004 non complex property. $700.00. I’m doing appraisals in Arizona. As you know most banks are requesting AMC’s to bid out appraisal request not just for turn-time but for the fee’s. . Don’t compromise your fee’s or give unrealistic turn times to get an order. It only brings down the fees for everyone. The turn time from an AMC are unrealistic to became with. Be firm on your fee and turn time. The AMC will work with you. Keep in mind we have a shortage of appraisers and this will continue as the educational requirements have become more stringent since 2008. And are continuing to be . (2015) Bachelors Degree to be Certified residential. In many states.

  8. I may get shot over this, but it drives me crazy when appraisers belly moan and whine and cry over fees that haven’t been raised in 20 years. Lets look at the simple fact, you can do more appraisals in a single week now than you ever could before! With online records, MLS, information, emails, software etc. I can do twice as many appraisals as I could when I started. Anybody remember having to go to every single courthouse and PVA to check sales histories, deeds, mortgages, PVA info, lot sizes, etc. How about running to the store to develop film, then going back to pick it up and then paste them to the report. Then lets remember, having to buy envelopes to mail those reports by going to the post office and paying for postage or hand delivering them to clients. How about when their was a revision, you had to reprint the whole report, or that page, then go through the whole process again. Lets go further back, when you had to literally retype a whole page of the form on a word processor because you made typo. How much time are we saving by having all this info a few clicks away. How about our own software. How much time do we save by cloning info from the same neighborhood, or importing comps at the click of a button because its already in our database. Anybody else remember having to physically open a FEMA map and get flood zones. Now I click a little button in my software and its done in 3 seconds. My map program takes 5 seconds to create my map and is much more accurate than the 5 minutes it took before. I’m all for being paid more, but when I hear appraisers all cry and whine that no one pays us more and it is more work, no one wants to be honest and talk about how much easier our job has gotten with all the technology.

    Anyways, the fact of the matter is that you can charge whatever you want. The market will tell if you are too high or not. As appraisers, we are also in different life circumstances. These young guys are hungry and need the work so they will do it cheaper. I know older guys that are financially secure and won’t go out of the office it isn’t worth their time. I completely understand both sides, but the old secure guy can’t blame the young hungry kid for being cheaper to get that work. Glad I got that off my chest.

    1. J Allen – I agree that appraisers are more productive than ever before. We work hard to gain expertise and most of us try to utilize technology that makes us more efficient. However, you seem to feel that lenders and clients, not appraisers, should be the beneficiaries of our increased productivity and higher quality work, and that appraisers don’t deserve higher fees. Well, I have plenty of clients that are willing to pay a fair fee for high quality services. I really don’t understand why you are trying to rationalize working for peanuts. By the way, due to lender requirements, I complete fewer appraisals now than I did before the housing crash, but, because I raised fees, I’m netting more profit. To each his own, I guess.

    2. WOW !!!!! Some of what you said is true; however, you have left out so many details. Today it takes you a lot more time to complete an appraisal because you have to re-search and write a lot more comments, take 3 times the photos, almost be a home inspector, fill out more forms and talk to more people than ever before about things that have nothing to do with nothing. Cost of living is a lot higher for everything so you must increase fee’s. AMC’s only make a living by stealing our fee’s, negotiating a lower rate and employing people who do not know what they are doing and ask us stupid questions. I am sick of paying wages for these young people who go to college and get a degree for something stupid that they cannot get a job in. The Banks and AMC’s have created another income stream right off of our backs.

  9. At present, appraisal prices should be the highest the market will bear, because they are too low for the amount of work, expense, time, etc. Analysis of costs vs income should be used to determine whether you continue in the appraisal business.

  10. R Patrick Goebel

    Amen to what the market will bear. I do both rotational work for regional or local banks and the AMC’s of my election. Have been in the business for 25 years. It does cycle, like others have said don’t roll over when you have more work than you could possibly ever do. Try out a higher fee on your least favorite AMC or lender client in a tactful way. You will be surprised how often it will be accepted. The more we do at higher fees, the more likely the clients we have will become accustomed to paying said “market” fees… I sit atop a large metro in south Texas and I my low paying threshold is $400. I used to see that as golden, now I oblige it as I have many that pay $450 standard and have two heavy hitting clients that have actually raised their fees to the rotation of appraisers on their own out of “goodwill”. They just want quality work. Got to love them. Negotiate people! I have AMC’s call me with starting bid of $300, I patiently wait for address, then if I know the area the property is located, I spring for what my other clients are paying or more if I don’t want it. Why take a pay cut for overtime? They usually pay it. If not, get out of the way and get some other sucker to do it. Don’t be the sucker. WE all have higher overhead and lots of other land mines to deal with. There are not enough appraisers. If you are professional and do quality work, charge like it. NOW is the time, not when the market is soft.

  11. I am a new appraiser and get $500 per assignment! I DID NOT get my degree, take additional appraisal classes, do a 2 year apprenticeship for almost no pay, take on the regulations of the industry, take on the liability and deal with the crap of AMC’s IN ORDER TO MAKE MINIMUM WAGE!!! Get some courage – raise fees. Anything under $500 ANYWHERE is a joke.

    1. Agree 100%. Anybody charging less than $500 MINIMUM is a dummy. The total number of appraisers in the country shrinks daily, while the population grows. Every day the demand for appraisals grows while the supply of the appraisals shrinks. It is simple supply/demand. If your minimum starting appraisal fee is less than $500, you are a bozo and you leaving a lot of money on the table. Don’t be a pussy, charge more money!!!

    2. Ryan, not sure where you work but where I am located many homes are under $150,000. For these assignments you’re looking at maybe 3 hours at best invested to complete the report. Do you really think anyone would pay $500 for an assignment like this? Do you really think any appraiser is worth $165+ per hour? I think a lot of people including you mentioning a minimum of $500 just don’t understand smaller town markets. Nobody will pay $500 for a standard appraisal in my area. For homes over 3,000 sf in my area, $450 to $500 is still difficult to get most of the time. In my opinion, $100 per hour is fair but if you’re taking 5 hours to complete an appraisal of a townhouse that’s worth less than $150,000. I really don’t think the $500 fee is justified. A standard fee for your market area may be $500 you would not have any work in my market with the “anything under $500 anywhere is a joke” attitude. Not trying to argue, just pointing out that markets vary significantly and so do appraisal fees.

      1. Troy. It is appraisers like you that hurt the appraisal industry. First off, if you are completing an appraisal in 3 hours, you are doing shitty work. Period. Second, the price of an appraisal has nothing to do with the price range of the house. Tou should be doing the same amount of work on an appraisal for a $150k house as you do on a $500k house. Third…IT ISN’T about charging for your time. It is about charging for your knowledge…..which you don’t seem to have much of, so maybe you do only deserve shit fees. I am in a small town and I don’t take less than $500 an assignment. Prob average around $600 for a 1004. The lenders don’t blink an eye at my fees. You need to grow a pair and start charging more money. But I guess if you think you are worth crap fees….then you probably are.

        1. @ Troy. How is a three hour appraisal “…shitty work. Period.”? That’s a comment that oozes inexperience. I do plenty in 3 hours or less and they are no less credible, no less involved. After you have been around awhile, you will have heard a saying that goes “its all about the data”. After you have been around awhile, you will know the gravity of what that means. In addition to data, experience goes a long way. It’s how the old carpenter can move half as fast as the young guy and still produce more work. I do appreciate your passion and hold-fast to higher fees. I think $500 is a good amount too, but I will write another post on that.

          @Brian. How is it that the price/value of a home is an element in determining the price of an appraisal? I get the rest of your post, just not that part.

  12. I think J Allen hit the nail on the head above.. I remember the days of film developing, going to courthouses, going through reams of paper, mailing, etc.. Having everything at your finger tips saves a lot of time which offsets the larger report requirements. Knowing your expenses is a large part of it but knowing your market is even more important when determining fees. I have standard fees of course but I also review every order to determine if the standard fee is sufficient. Fee increases for expanded scope of work, complex assignments (everything seems complicated these days) and/or limited sales data is widely accepted if you explain and ask for it. If I know an appraisal will take me at least twice as long to complete, I adjust my fee accordingly. The standard fee range from $325 to $375 reflects a standard appraisal assignment. When a client has special instructions, additional requirements and/or the subject in question is above average for the market area, I estimate the time I will have invested and ask for a fee increase. I believe many appraisers are scared to ask for more in fear of losing the assignment or client. If I lose an assignment over this situation, most of the time I am happy because my time is valuable. If the client won’t pay me a reasonable fee for my time, I don’t want the assignment anyway. I’ve been paid up to $1,500 for a single family (1004) appraisal. Ultimately, if a lender needs an appraisal and you have proven yourself to be qualified and thorough, you can charge a fair fee for any assignment. A set fee for every assignment is like saying every appraisal is the same. Be smart, charge based on your time, not what everyone else is charging and weed out the clients that only want the cheapest appraiser. These clients are not worth dealing with anyway. Just my .2

    1. Wrong again. Guys like you just don’t get it. You should not be charging for your time, you should be charging for your knowledge!! If you are still charging $350 for an appraisal you are a bozo. You make us all look bad. Never ceases to amaze me how so many appraisers are good at appraisal but are shitty at appraisal. Might be time foe you to hang up the tape measure and clip board.

  13. Michael Morris

    Very simple.

    I charge $25-$50 less than “typical” fee and get all the work I want. It’s profitable because my “hard” costs are very minimal. All you appraisers whining about getting higher fees are pissing into the wind.

    Within 2 years 90% of residential appraisers will be gone and replaced by AVMs and other computer generated values. Just check Coelogic’s “Real AVM” values on properties you appraise and see how accurate their “values” are. If your work is primarily “tract” neighborhoods, good luck…

  14. I’ve been in the appraisal business here in Austin, Texas for 26 years, and five years prior to that in the residential RE brokerage business. Over the past five+ years I’ve almost completely extricated myself from the normal mortgage markets; that, in-and-of itself has been extremely rewarding. I now have only three mortgage company clients, down from over 50 clients from years ago. My shop used to employ 10+ appraisers, and now we are down to me and my business partner, and that is just fine with me. We have a base charge of $450 (or more) for the simplest 1004 within the city of Austin. We now do business primarily with normal banks, family law attorneys (divorce and estate work), and private banking groups for upper end homes, waterfront homes, and homes on larger acreage tracts, or small ranch tracts. Our private banking clients will pay us up to $3,500 for very difficult appraisals, and we frequently receive well over $1,000 for appraisals that are moderately to fairly difficult on the outskirts of Austin. We decided that we simply would not be held hostage by AMC’s and we avoid them like the plague. This took years to get to this point, but has been well worth it. Further, I have now slowed down a bit, and turn down as much work as I accept, and the clients keep coming back. If you are a good and thorough appraiser, the lenders know it, and they will keep coming back. It’s like the old-school appraiser-client relationships we used to have. Don’t settle, and work toward getting new types of clients. There are lots of other folks who need our services besides mortgage companies.

  15. I have been appraising since 1958 and I refuse to work for less per hour than I pay my landscape contractor or housekeeper. Yet there are appraisers who will. Either they don’t know the value of their time and expertise; their expertise is so minimal they are satisfied to charge what they can get; or they are struggling against low fee competition. None of these situations are tolerable for a true professional that takes pride in their work and reputation and strives to give the best appraisal advice possible.

    I knew an appraiser back in the 1950’s who made a comfortable living doing FHA form appraisals at $25 per pop–and could do five a day and gross over $20,000 annually–an excellent living then. Appraisers today will accept AMC dictated fees for 30 and 40 page reports that take the better part of a working day from start to finish–and can’t make ends meet with $350 fees. This does not define progress. It does define stupidity however, when they are working for effectively $50 per hour–or less.

    Total your overhead and decide what you feel is an adequate annual living income. I think you will find that if you are not billing an average of at least $100 per hour per working day, you are not covering overhead and making a satisfactory living.

    Appraisers have become some of the most over-regulated professionals practicing their professions today. We have no one to blame but ourselves. We accepted marginal, incompetent, dishonest, and unethical practitioners in our ranks and are now paying the price. The appraiser/client relationship we used to have has been obliterated by AMC’s seeking the fastest and cheapest appraisal report they can find. I remember some appraisers who used to think nothing of letting their client wait days before returning their phone calls and then quoting 3 week and longer deliveries on appraisal requests. Lenders became disgusted and it opened the doors for the AMC’s to take over our clients. So again, we have no one to blame except our complacent selves.

    We don’t ask our physicians, accountants, and attorneys to cite us chapter and verse of their source and basis for advice given to us. But we now have to provide so much documentation for our professional opinions to our clients that we face USPAP violation exposure with every report we produce. And don’t think that there aren’t competitors out there that will seize the opportunity to file complaints against an appraiser for pure harassment purposes. Whether filed with state appraisal boards or professional organizations such as the AI, the complainants are afforded complete anonymity and the (defendant) appraiser is neither give a copy of the complaint or afforded the opportunity to confront their accuser. This right of confrontation is a basic tenet of our legal system and should be permitted by state boards or professional organizations. Attorneys would not accept a process whereby they were denied the right to confront an accuser filing a complaint against them. Why should appraisers accept this process?

    When all that confronts competent, ethical, and honest appraisers today, it is no wonder our ranks are diminishing and all that will be left are the bottom feeders. My practice is to quote fees that are commensurate with the appraisal problem; my experience and expertise; and the demands of the client on my time. I now charge more per hour than my entire monthly salary from my first appraisal job with an S&L– and I earn it.

  16. At least as much as the landscaper – I love it! I always thought we should be in line with the electrician or plumber myself. This is great topic – fees/expenses/profit, etc. Though there is one aspect that never comes up that I would like to add.

    Ever wonder why appraisals cost a couple hundred of dollars? Why not $50? Why not $2500? There is no reason we could not produce appraisals at either of those price points. The reason has to do with the other side of the (mortgage) business, the selling of the loan. Like it or not, we need the loan officers to sell loans just as much as they do. Less loans sold, less loan officers, less appraisers and so on. Banks (not loan officers – ha ha) need appraisers to do two things. #1 Produce a credible value estimate. #2 Keep loan officers honest. The second is easy, especially with the current climate. The first is not too tough either, but a credible report is better when a qualified and experienced person produces the work product. The question becomes, how much support is needed to back up the estimate? This has always been and will always be, the relationship of our profit. The client will always want to get as much support as possible, until the amount of support costs more than the consumer will pay. What I mean is, the reason we get a few hundred dollars for each report is because that is exactly what consumers are willing to “gamble” on an appraisal. If appraisals were say $1000, we would be able to spend more time on them, but few consumers would line up to apply for a loan. If appraisals were say $50, no appraisers would be willing to put as much into it as we currently do. In the end, the lenders have figured out where the balance is (meaning the highest amount a typical consumer will spend) and have always attempted to get as much support out of us as possible for that amount. What I am saying is our fees are never going to go up, or at least not significantly, not past the amount a typical consumer is willing to pay for the gamble. That leaves only the amount of support/service we provide as a bargaining chip. If you look at the 1004 and think back to when it was created, it is a summary report designed for an appraiser to go through in a certain amount of time. It reflected a certain level of support that along with our inspection time, would be as much as they could ask from us for a certain amount of payment. It worked well for a long time. The difference today is all the extras that have been added along the way. 5 minutes here, 10 minutes there, an hour here and there. When I started over 10 years ago, we pumped out 2-3 appraisals a day in the easy markets on a regular basis and had zero revision requests. Today, I would be lucky to complete 2 reports from start to finish in an 8 hour day and could expect revision requests on over 50% of the orders, no matter how good of a product was submitted. Sure I still get some 3 hour orders, but mostly I spend about 8. I generally shoot for one a day.

    The difficult part is that lenders want more and more support. We ought to be charging more and more and one would think eventually, they would revise the amount of requested support. Getting that to happen is another story all together. I think that is why many are so negative about the future of appraising, as we don’t have a “normal” mechanism (supply/demand/free market) to create the balance. The HVCC ruined that for the industry and I for one see no way out of it. Ours is a perfect example of a heavy regulated industry that leaves real people in its wake.

    I truly believe the best solution is to go union, or something like it. The tough thing is that appraisers are independent by nature and necessity. Few are interested in going union, even if it would be the best thing we ever did for ourselves and each other. Anyways, that’s my 50 cents on the subject.

  17. PS – My post was quite the tangent from the blog topic. If you don’t understand what the coach was pointing out, you might want to work for someone else instead of yourself! That said never fear, as appraisers we should all be at least mostly competent to crunch our own business numbers.

  18. The Spicy Italian

    I tried to read each comment and many were great. It appears that there is still a wide range of ideas about fees but the bottom line is that if you do as Dustin says and really look closely at your numbers, you will find ways to increase profit. Like expanding your webpage while closing down hard copy yellow pages. By finding HONEST AMC’s who have appraisers on staff who fight for YOU and understand customary and reasonable fees. Yes, they are out there. I don’t touch Landsafe or Clear Capital or LRES, etc because I don’t need the hassle. of fighting for fees. I just do good work and explain everything in the report. That is why the referrals continue to grow and the good clients send more and more work. And yes – I charge for the knowledge but would be crazy if I say I didn’t charge more for a larger, more complex property than a basic ranch. And yes, a basic ranch (with good nearby data) can be written up in a few hours as described. I don’t cut corners – it has the same explanation as a bigger home. Maybe the features list is smaller or the sketch is quicker, etc. Don’t fool yourselves, An appraisal that comes to you considers your experience, reputation, and the time you can turn it for the client. So looking at the cost of running things can set you up for success. One more thing – JOIN a local appraiser group in your area. In NC, we have NCREAA – it encourages open forum and helps us all to start thinking like a team of experts. We don’t price fix or set a standard adjustment – we simply discuss how everyone does business – it gives us a range of ideas. Plus it gets some out of their basements……yeah – talk about low overhead. It’s a smart choice for many.

  19. Below are fees for common every day services that we all encounter;
    Sprinkler Repair – $130/hour + $55 trip charge
    HVAC service – $120/hour + profit on parts
    Car Mechanic – $90-$120/hour + profit on parts

    We continue to let out industry be dumbed down. How low can you go? Lowering the educational threshold will not bring new quality appraisers into the business. We will be attracting burger flippers from McDonalds.

  20. I agree with everyone on many points. And Remember, if you are working in attics and crawl spaces you better make sure you are covered with a hazard suit, Respirator, and eye coverage. Breathing and inhaling ANY asbestos insulation, toxic mold can put your health at risk later in life or cause lung infection from just breathing the bad mold. You know the Mesothelioma commercial the Lawyers have out there. Any homes that smell like mold and water cover up!
    You are a Home Inspector when doing and FHA appraisals and many of the REO’s.
    Make sure you are charging FHA for the Builders Inspection, at least 2/3 of the Fee they get because you are doing the dangerous work.
    If you are injured on the site after falling or perhaps spraining a foot, etc, make sure you document and take photos to show the Insurance Company when you call the their homeowners insurance. Time & Date your Photos. Have AFlac or another disability insurance to cover your lost wages when you cannot walk for 6 weeks, after falling through a ceiling or floor. Most leg and foot casts are bulky, and dragging your leg is tough when you have to carry a camera, Ipad, disto, and other appraiser and inspector tools.
    When the Lender cannot get anymore appraisers because they have been injured they can call the Building Inspector to do the Appraisals. (The last sentence is a joke).
    You got to love it! Everyone wants a piece of the appraiser. FHA, AMC’s, Background check companies, software companies, insurance companies, now liability companies. We are so SMART we can do everyone’s job. CHARGE FOR IT! More money less work!

  21. I left my first job at a savings and loan in 1986. The fee was $250 per report. That consisted of front and back page, 3 photos of the subject, and an invoice. Never once questioned by an Underwriter and turn time was minimum of 2 weeks. I took advantage of the refi period and inspected 5 houses a day (no interior photos) and wrote those 5 before bedtime each night. Yes, $1,000 a day. No E&O, just a minimum wage secretary for typing and filing. I raised fees with each new requirement; comp photos $50 more, property histories, $100 more, MCA $100 more. So my minimum in 2005 was $500. From 1985 until 2005, I NETTED at a minimum $125K a year. Now, lucky to do half of that, plus the aggravation, etc. Requirements to be a Residential RE Appraiser in NC: 4 year degree, 12 additional 30 hour courses, 250 hrs experience. Total time to before taking Certification exam; minimum 7.5 years. Who is going to do that for $50K a year? Not my children.
    Unless you learn to say NO, this industry is doomed relegated to”discount appraisers” who work out of the trunk of their car. My advice to anyone 40 or under is to get OUT now

  22. if you hired a appraisal and you paid him $300 plus tax. Can you request a paper work copy report (I know i did paid for those right?)

  23. Douglas Carson

    It’s interesting reading this message board. I was wondering why my appraiser shot the figure of $2800.00 for an 1100 sq ft home, 7500 sq ft lot, and in a city. Now, I see why.

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