Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
Here are a few important things that you can do to get control of high appraisal fees:
1. Make sure that you are working with a lender who lets you order the appraisal report yourself. If the lender stays involved your appraisal may be ordered through an Appraisal Management Company (AMC) or from a small, pre-selected group of appraiser that work for the lender and that will likely increase the fee. If it’s a large assignment or multiple properties not getting direct bids could double or triple the appraisal fee.
2. Call around and get bids. When they have to appraisers will compete for assignments by offering lower fees. Appraisers generally bid based on how much time and effort will be required to complete your assignment. If it’s a very specialized property they can bid more because they know there will be relatively little competition. Appraisers with higher overheads in fancy offices have to bid higher than those who don’t pay for offices.
3. Appraisers determine what level of detail is appropriate for each appraisal report based on its purpose. If the report is for litigation you can tell the appraiser you want a “minimal” report but appraisers know what the court and attorneys expect and they must write a report that will be viewed as credible by you, the attorneys, the judge and possibly a jury. So you may find it difficult convincing them that the purpose is litigation but in your case no one is ever going to look at it. I hear these outrageous arguments all the time. I never believe them.
4. General commercial appraisers can appraise any kind of real property, but that statement should be modified to state “that they are qualified to complete.” Always ask the appraiser if they have experience completing a specific property type in your location.
5. Don’t call appraisers for bids if they have out-of-state phone numbers or 800 numbers. You are probably calling someone who is trying to broker your assignment for a fee, or I know appraisers who are out-of-state and bid high enough so that they can fly into town from another state just to complete an assignment. In cases like this you have likely paid too much.
6. Personal qualifications, designations and experience are useful indicators of report quality but only to a point. The difference in a report that has a $ 5,000 fee and one that cost twice that much from another appraiser may have minor differences that are not discernible to many. If you have to pay for the premier appraiser in the state or country don’t expect a discount because It’s likely that he or she doesn’t give them.
7. The best appraisal reports are completed when appraisers have been given sufficient time to do the research and write their reports. When you have an unrealistic deadline you are going to get a higher bid from appraisers and many may just pass on the work if they decide they can’t do a credible job. So make sure you start shopping for an appraiser early and that you have plenty of time for the appraiser to complete his or her work.
8. Make sure you are clear about the date of value, if it’s not the current date the appraiser must know and the sooner the better. Does anyone think that the appraisal of a property as of 2000 takes the same effort as if it’s appraised as of today’s date?
9. Appraisers need to know the purpose of an appraisal, if it’s for litigation or financing it makes a difference. Finally details about a property to be appraised are important. A 1,500 SF home is less of a challenge to appraise than say a 4,500 SF home. A small office building is easy compared to a retail center. When you are trying to hire an appraiser give them all the details when you describe the property not after someone accepts the assignment.
9. Turnaround time is important to a client and also to the appraiser. If you have an assignment with a short fuse you need to say so immediately, not after someone bids on the work. You may get lower bids if you hide the deadline but many appraisers will just cancel the assignment if the find out they don’t have time to complete it.
10. Don’t be afraid to ask the appraiser for a discount from the quoted fee. When someone asks me to discount a fee there are times when I will offer one but there are other times when I will not. In the worst case scenario you will get an “absolutely not” response.
It’s best for both the appraiser and the client if an assignment agreement is reduced to writing, there are fewer chances that you will get something that you did not want. No one is perfect and having term in writing makes sure that both parties are not taken advantage of. Appraisers are at risk for hour and hours of their time and clients for their hard earned money, appraisal agreements just make sense.
For more appraisal information contact Glenn J. Rigdon MA, MRICS, IFAS, 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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