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Why Did You Lose that Last Appraisal Assignment?

by Administrator on Nov 29, 2018 Business Operation 181 Views

If you are contacted by someone who is not the actual principal client, someone who is not the decision-maker regarding the appraisal assignment, you are immediately put in a disadvantaged situation.  You may be asked to bid, which often means spending your time trying to figure out what real property actually needs to be appraised.

FEES

You charge high fees because you think you are a better appraiser than many of your competitors.  If the party calling you doesn't thin the same you may find that you have lost the assignment.  If you are that good at what you do, and you don’t need to bid competitively, more power to you.  Most appraisers however need to bid reasonably to survive.  That means that you have to be able to estimate how much time a report will take to complete and what your time is worth.  It's your time plus a percentage above it to pay for your overhead.

Yes, we are usually bound by what our competitors charge.  You may decide that you are worth a certain hourly rate or set fee for certain appraisal types, but there are many in the market who may not agree with your assessment.

Do appraisal customers care about you fees?  Of course they do.  You may have the best qualifications in the market but if you think that people will pay 50% to 100% more to have you co-sign a report you may find that you are wrong. 

TURNAROUND TIMES

Some potential clients need a report as quickly as you can complete it, others are not in a rush and there are some that need it so quickly that they ask for a report to be delivered in an unreasonable time frame.  Most appraisers try to accommodate client turnaround requests but if the requested work must be done over the holidays or so quickly that the assignment will disrupt their ongoing work they will ask for a premium.

Appraisers have resisted the ever increasing demands for shorter turnaround times but again they have to remain competitive.  If everyone else quotes a 2-3 week turnaround for an assignment type and you or your office quotes 4-5 weeks for the same property some potential clients will not wait.

Clients are generally forthcoming about their turnaround time needs, so you don’t have to guess if there is immediacy.  If you accept a fee and a turnaround time and the client calls you after you start and tries to change them you have to be able to go back to your email or your engagement letter and point out that you are working based on your original agreement.

CLIENTS

It’s not always the case that the “client rules,” there are appraisal assignments that are made by family, friends, partners, attorneys and accountants to name a few.  Appraisers are not always made privy to who is going to be the decision-maker.

The worst case scenario for appraisers is spending several hours figuring out what real property or properties need to be appraised, often from a hand written list or verbal address list, provide property details and then have those details used to shop around for a lower appraisal fee.  If potential “clients” don’t know the details about the properties they need appraised it’s my opinion that an appraiser shouldn’t supply them. You can do the research and bid without turning over your research.

I have had individuals contact me, listened to my bid, which at times was nearly the same as my competitor’s bid, then attempt to bias my future analytic result upward or downward for their own purposes.  They say things like “well you understand that this is for the IRS so it needs to be high (or low).” Or they say “we all know that there is a range of possible outcomes, and I need one that favors my position.”  Appraisers hear these comments often but most tell potential clients they have to “conclude results based on their analyses.”

I have found that clients often select an appraiser themselves, not through others, with an attempt at bias.  They want to talk to the appraiser directly rather than accept an appraiser offered by an attorney or accountant.  “At least I told the appraiser what my needs are,” is the argument that I have heard.  You thought you had provided a very competitive bid, but the attempt is often more important to a potential client than saving a few hundred dollars on the fee.

I'm not saying that all clients try to influence their appraiser I’m just saying that it happens and appraisers need to be ready with their responses. There is nothing wrong with saying that you understand their situation, you just can’t agree to be biased or you will have lost any chance of providing the unbiased appraisal that you are duty-bound to provide.

COMPETITORS

Most appraisers try to sell themselves, their education and experience, without attempting to “throw mud” on their competitors.  Some simply can’t accept that they have competitors they think that they are the only acceptable, qualified appraiser who can do the job.  I have contacted appraisers in the market to ask them for sales information, a not uncommon practice, and the first thing they try to do it find out details about your assignment.  I can tell you that regardless of how “confidential” you try to make a conversation with some appraisers the will hang up the phone and attempt to contact your client, or if they can get them the owner of the property being appraised, and ask them why they would hire someone like you.

In my opinion you are better off not asking for assistance from other appraisers.  I have recognized who I am dealing with in my market and often it’s less painful to miss out on information about a sale or two in a market than to deal with some competitor who have no self-control.

Most appraisers are probably not that much different from other groups of licensed individuals trying to protect their professional turf, which means that an appraisers need to learn to keep their mouths shut or deal with the lost clientele that may result.

Again, am I saying that all appraisers cannot be trusted with data requests or information on a property that you are appraising?  No, but I have repeatedly been defamed by a select few.

INFORMAL REVIEWS

I’m don’t complete many review appraisals but I have informally reviewed many appraisal reports for IRS cases, litigation and partnership disputes.  It’s not difficult for most appraisers to read a report and tell you if the appraiser concluded a market value opinion that was higher or lower than it should have been.  Appraiser analyses are there for everyone who gets a copy of their appraisal report to see.   It’s not that difficult to follow the reasoning, or lack thereof, and property details and decide what you would have concluded.  That’s not a formal review it’s just a critical look.

When a client receives an appraisal opinion that they don’t like, because many have a reasonable idea about where their market value should be, at times they ask another appraiser to look at the report.  It’s not an unusual request, and I think that it is funny that some appraisers think their work is so good that it does not “float” to the desk of others. 

There are some reports that I entirely agree with and others that are so poorly crafted that I think that the client has a case to make with an error’s and omissions  insurance company, but since the “reviews” are not formal I generally just offer some general comments.

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/

Article source: http://www.appraisalarticles.com/General-Appraisal-Articles/General-Appraisal-Articles/Business-Operation//4716-Why-Did-You-Lose-that-Last-Appraisal-Assignment.html

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