How Much is Your Time as an Appraiser Worth?

If you are doing FHA appraisals for $ 450 each you know what your time is worth because if you can complete 5 appraisal assignments a week your gross is $ 2,250 X 52 weeks a year is $ 117,000 a year.  Most appraisers can’t however work without vacation time or any time off during the week and most don’t get a consistent number of assignments each and every month.  An appraiser who does gross that much money makes about $ 56 an hour if they were working a standard 8 AM to 5 PM day, but we all know that appraisers usually work longer hours than that.

Appraisers often work weekends, usually for the convenience of our clients, and many appraisers work more than an 8-hour day but have flexible hours if they are working for themselves.  So, it’s hard to make comparisons with those in normal jobs if you don’t know how much time an appraiser is putting in to earn his or her income. I sometimes find that the hourly rate that I charged someone was too low because it actually took much longer to complete the work than I originally anticipated when I bid on it.

What complicates income comparisons is the fact that non-residential appraisers often complete narrative appraisal reports that can take days to weeks to complete. Commercial appraisals are thus usually quoted based on the number of hours that are estimated to complete them. An appraisal assignment that can be completed in a few days may be quoted for $ 1,200 or $ 400 per day, and that works out to about $ 50 an hour again if you are working an 8-hour day.

If you think a multiple property, monster assignment is going to take you 3 solid weeks of work, to the exclusion of everything else, you had better be bidding based on 120 hours. For those of us who don’t employ Interns you have to get down to a base rate. Even at $ 50 an hour, which many would not accept, you would have to bid $ 6,000 for 3 weeks of work. It’s been my experience that taking an assignment based on an hourly billing rate is not the way to go. You can spend 10% or more of your time just tracking your time even with a good time management program or app.

Potential clients tell me “I know someone better qualified than you who will complete the assignment for $ X dollars.” And maybe they are right, and may the lowest priced appraiser take all the work he wants, because I’m not interested in working for the lowest fee possible. If Joe the appraiser will do an assignment, like a simple assignment on a single-family residence for bankruptcy court for $ 350, more power to him.  At some point it’s just not worth doing the work.

It’s not that I’m so busy as an appraiser that I can just turn away every assignment that I don’t think falls into my acceptable fee range, it’s just that I can and do often turn away assignments and the ones that have low assignment fees I have no regrets about not taking.

Every appraiser asks themselves “how much is my time worth?” The more difficult the assignment, like those completed with the greatest detail for litigation, the higher the assignment fee should be. Anyone who tells you they want the least detail and the most reasonable fee possible but then tells you that the report is going to go to their attorney as a basis for possible litigation is setting you up for a nightmare. The client wants to pay you as if the assignment is a walk in the park, but when the opposing counsel calls you in for a deposition you will wish you had held out for a larger fee and spent more time to complete a better (more detailed) report.

If you listen to what a potential client is saying you have a better chance of surviving the ultimate and possibly unintended use of your report. An engagement letter is the best way to protect yourself. If you agree to a current date of value and the client says “oh yeah, we need two dates of value” you have the contract as evidence of your original agreement. If you agreed that the use was estate valuation for tax reporting purposes and an attorney contacts you about a pending and undisclosed trial you can point to the contract and say “no way, the report wasn’t completed for that purpose.”

If you are told the truth about the purpose of an assignments and the real use of your report it’s less likely that you will be caught off guard when a phone call comes asking you to defend it.  It’s also less likely that you will feel that you weren’t fairly compensated.

We all know from NAR studies that after all of the teeth gnashing the population of appraisers is shrinking and that appraisers generally make about $ 50,000 per year.  Yes, there are those who work and manage offices and make much more, and there are those who work in multiple states or get work from high paying bankers or trusts and do well, but for the most part there are many other appraisers who work hard and make an average income.  That’s not the kind of income that draws many new appraisers into the industry.

For more appraisal information contact Glenn J. Rigdon MA, MRICS, ASA is a Las Vegas / Henderson Nevada based appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas  (http://www.appraiserlasvegas.com), or http://www.horizonvillageappraisal.com, or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at http://www.linkedin.com/pub/glenn-rigdon-ma-mrics-asa/1a/30b/879/

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