What are Normal Appraisal Fees?Ah, good question and one that is getting asked a LOT since the HVCC/AMC debacle of 2009 (and most of 2010) that skewed the fees appraisers receive to the ridiculously low while at the same time hiking the fees consumers were charged. So the question really is, when the industry gets back to "normal", what might be a typical fee charged by an experienced appraiser to perform a typical, single family residential appraisal?
Appraisal Fees, Researched and PresentedTo answer this question, a la mode released the Appraisal Fee Reference (AFR) in February of 2010. From the announcement:
"Using the data from hundreds of thousands of verified and validated appraisals, the AFR reports the median appraisal fees for each of the 3,221 counties and districts in the 50 states, the District of Columbia, Puerto Rico, and Guam."In other words, the Appraisal Fee Reference is an incredibly detailed publication, much needed by the appraisal industry. Appraisers need to be paid what the work is worth, based on the complexity of the assignment, the appraiser's level of expertise, and the area of the country. No one can (or should) set industry-wide standard fees because that would run afoul of too many laws to list, but knowing what others charge for a service is a valuable piece of information. We hope that HR4173 (the Dodd-Frank Financial Reform Bill) helps set the industry back on track and that it will be a win for independent fee appraisers.
You Rarely Get What You Don't Pay ForIf you are looking for an appraiser and are shopping for the lowest fee, be warned that if you shop too low, you may not get the quality of work that makes the appraisal worth ordering in the first place. Do you want that question in the back of your mind? Do you want your client wondering if their deal went south because of a $50 fee differential that resulted in an out-of-area appraiser coming in from a less-expensive area to do the assignment? Experienced (and ethical) appraisers will pass (forgo) assignments that don't compensate adequately for the work involved to assume the professional liability for the report. I would love to open up the discussion on this topic, so if you have a rant, a question, or an observation, please post your comment and we can get the conversation going!
The Best Appraisal ToolsThis year we have focused on integrating the newest and the best appraisal software and appraisal tools into our property appraisals business. Before we talk about modern appraisal tools, let’s take a trip down memory lane. Quick Clicks For Article Sections:
I remember when I first started appraising, way back in 1991 or so: the days of 386s, DOS and Windows 3.1. We used Total (now called WinTotal) from a la mode, took 35mm (film!) pictures and waited for them to get developed. We used microfiche to look up comp data and were so excited when the comp data became available on CD ROMs! Appraisal assignments back then certainly took longer to complete and to deliver - we hand delivered or sent them by postal service or messenger services! Appraisal practice has definitely come a long way since the 1990s.
Now use high-resolution digital cameras and on-line systems such as the MLS, tax records, and mapping and zoning information databases. And, of course, we have Google. What did we do before we could Google everything? We are far, far more efficient than we used to be, but the art of appraising has become more complicated at the same time. Clients demand (and rightfully so) more data, the analysis of comparables has become more sophisticated and lenders require more substantial information about market areas. Now, we get an appraisal orders through email or from appraisal management portals. Surprisingly, we still get most of our confirmations by fax.After hours of patient and methodical research and adjustments, aided by the fantastic new tools of the trade, reports are uploaded and delivered to clients online, in the blink of an eye.Our Favorite Toys (aka Tools):
- We use an Apple iPad with the DaVinci sketching app. I can sketch a house with the software as I am measuring on site, as opposed to sketching it out by hand and then entering it into the computer later when I’m back at the office.
- With the Disto D5 Digital Laser Rangefinder from Leica, I can measure accurately and efficiently at the property, enter the pertinent measurement and property condition data into my iPad and then sync it with my desktop later.
- A Canon Digital Point and Shoot Camera (the latest being a pair of PowerShot SD1200 cameras with Image Stabilization) make taking photos a snap and the quality is outstanding.