As appraisers we often wear at least two different hats. You have heard me talk about the business owner cap versus the technician cap. While we often play both roles, I like to think of myself, first and foremost, as a business owner. As a business owner, I am constantly trying to think outside the box for ways to improve the success of my appraisal business. It is interesting to me as I am involved in many different appraiser groups and discussions, fairly often I hear a conversation where someone is complaining that their competition is not charging enough. I think the idea behind this complaint is that since the competition is not charging “enough” (whatever that means), the expected price of an appraisal goes down and they will lose business if they do not lower their own fees.
Let’s unpack this. Whenever you complain about someone else’s fees, you are making a judgement about someone else based on your own mindset. Fees only tell one part of the story. You do not know the scope of work, the determination of the client, or their office setup, etc. For example, my office is currently set up in a way that is quite different than most of my competition. This setup allows me to do appraisals with less overhead costs per appraisal. Which means I could (notice I said “could” not “do”) charge less for appraisals and still make approximately the same amount as my competitors.
Fees are ultimately a business decision. More importantly they are mine and your business decisions to make. If it makes sense for your business to charge more or less than what is “normal” (again, whatever that means), then good for you. I stand behind you.
Ultimately, a business owner should not be thinking in terms of fees in relation to everyone else’s. They should be thinking in terms of what decisions make sense for their own business. I’ll say it again: fees only tell one part of the story, so it is a waste of time to judge your competition based on fees or really to judge them period. Focus on your business and charge the amount that makes sense for you and your business.
For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode: