Appraisers - Fees Rising! (New Fee Survey asks how much)



Fees Rising! (New Fee Survey asks how much)

By Isaac Peck, Editor

After what has been a long and difficult road for many appraisers, it would seem the tide has begun turning. A combination of independent and governmental sources, including data published by the U.S. Department of Veteran Affairs (VA), as well as anecdotal evidence from individual appraisers and Appraiser Management Companies (AMCs), all confirm what many have been hoping for years: fees are finally rising. A new OREP/Working RE fee survey hopes to spread the news to all appraisers nationwide about what fellow appraisers in their market and nationwide are earning today (Click here to take the survey).

This new higher-fee reality is vindicating for many long-time appraisers who have forged ahead through numerous adversities in recent years: the economic downturn of 2007–2008, which caused the flow of orders at many appraisal firms to grind to a halt; the passage of HVCC and Dodd-Frank, which led to AMCs, split fees and most recently, in the wake of the real estate collapse, an ever-expanding scope of work and excessive demand for documentation by lenders. All these factors have put downward pressure on the bottom lines of most appraisers.

The good news today is that a thinning of the ranks over the last few years has led to a marked increase in fees in many areas of the country. The OREP/ WRE 2017 Fee Survey is designed to share the knowledge. (And establish new customary and reasonable fees?)

Fees Going Up
At the Appraisal Summit last fall, a chorus of AMCs and lenders confirmed that in several metropolitan markets fees have risen substantially. Greg Stephens, Chief Appraiser at Metro-West Appraisal Company, reports that in some markets, including Denver, Portland and Seattle, fees have nearly doubled in the last couple of years. Anecdotal evidence from appraisers confirms this, indicating that in many hot markets, appraisers have been charging $800 to $1,000 (or more) on rush appraisal orders. Even in regular markets, appraisers report enjoying a gradual increase in fees over the last two years. At the Summit, several AMCs speakers said appraisers are turning down $1,000 fees in some cases.

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An October 2016 survey of lenders, credit unions, and mortgage brokers conducted by consulting firm STRATMOR indicates that within the last year appraisal fees are up 16% and turn-times have increased by 79% to 81% for purchase and refinance transactions respectively. In a recent interview with Mortgage Orb, Sam Heskel, CEO of AMC Nadlan Valuation, was asked to explain why appraiser fees are rising. Heskel said that fees are increasing because there is a shortage of appraisers in some areas and that “Appraisers are badly in need of a raise. It’s long overdue – and fully justified. Many haven’t gotten a raise in about 15 years, even though their workload, responsibilities and liabilities have grown.”

The VA has been increasing fees in a number of states nationwide also and recently started a recruitment drive to add appraisers to its panel. In Wash. state, the VA raised the appraisal fee for a standard 1004 appraisal from $500 to $800. In parts of Colorado, the fee for a standard 1004 has risen from $575 to $750. While the fees that the VA pays tend to be at the top of the range in many markets, they are seldom the highest in an area, and in fact, the VA fee schedule is often used as a benchmark for appraisal fees in an area when considering what is customary and reasonable.

Fees are central to the recent discussion of an appraiser shortage. Some argue that there is no shortage of appraisers, only a shortage of appraisers willing to work for low fees. Appraiser Ed Cline argues that appraiser fees still are, in some cases, less than what they were paid 10, 20 or even 30 years ago. Cline contends that the low number of new appraiser trainees is a reflection of the low fees that appraisers have endured for the last five years or more, and that this is a problem that will solve itself as fees increase. Cline writes that as fees rise, “the profession will become more desirable, more people will want to be appraisers, and more current appraisers will be willing and able to take on trainees.”

Many appraisers blame low-fee AMCs for any “shortage” that might exist, particularly with respect to turn-times for appraisals. “There is no shortage of appraisers in most areas,” commented James Smith on a recent story decrying an appraisal shortage. “The problem is with the AMCs that attempt to place appraisal orders for lenders. I see the same orders come to my office every day for two weeks. It comes to me for $325 or $350 the first few times. As the basic fee is $500, none of the appraisers even reply to the requests. So, the first week, sometimes two, are lost in this way and it has nothing to do with a shortage of appraisers.”

Price Gouging or Supply and Demand?
AMCs and other stakeholders in the mortgage industry complain that appraisers in select markets are “pricegouging” them and the public by requesting fees of $1,000 or more for rush or special circumstances, due to the increased demand for their services. The irony is that when there was an oversupply of appraisers- when direct-lender and mortgage-broker work dried up in the crash, AMCs frequently touted the law of supply and demand as an excuse for offering low fees on what work there was. If appraisers will take $200 for a 1004, they argued, then that is the “customary & reasonable” fee. The logic should follow then that today’s high fees are also customary and reasonable and not price gouging- just the result of supply and demand.

The most obvious irony is that the “shortage” AMCs complain about today is a direct result of many appraisers being pushed out of business, unable to make a living on the compressed fees forced on them by AMCs.

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Negotiating Fees
Industry experts, rather than worrying about a shortage, say that higher fees mean that appraisers now have the time it takes to produce higher-quality work, grow their businesses and bring on new trainees. Higher fees may also entice new entrants to consider appraising as a profession or many veterans appraisers, sitting on the sidelines, to come back.

According to Richard Hagar, SRA and educator (How to Support and Prove Your Adjustments), many AMCs and lenders that he works with are desperate for quality appraisal work and are willing to pay extra for skilled appraisers. “Most Chief Appraisers and lending executives that I speak to agree that the banks and AMCs caused this problem by forcing down appraisal fees,” Hagar said. “That caused many competent appraisers to exit the business several years ago, looking for higher pay. Those skilled appraisers who remain are buried in business. Banks and AMCs are now in a situation where they have to pay higher fees for form-fillers and they have to pay even more for quality work because the demand for skilled appraisers is so high right now,” says Hagar.

Hagar encourages appraisers who are not enjoying higher fees to try negotiating with AMCs and lenders to demand more. The key is to raise the quality of your work and service first, he says. “Appraisers have more bargaining power now than ever before. Banks are desperate for good appraisers. If you’re not earning what you’re worth, focus on increasing your quality and raising your fees. Provide high quality appraisals and support your adjustments. Provide appraisal services in a polite, businesslike manner and increase your fees,” advises Hagar.

New Fee Survey
In the wake of HVCC and the rise of AMCs, E&O insurance provider OREP and Working RE magazine conducted a nationwide Customary and Reasonable Fee Survey as the issue of C&R fees rose to importance due to language in Dodd Frank. Over 17,000 appraisers participated in that survey in 2010. OREP and Working RE are currently conducting a new 2017 Fee Survey. Just like the previous one, the survey is broken out by 365 Metropolitan Statistical Areas (MSA) as defined by the U. S. Census Bureau, with rural areas included by state, and takes only minutes to complete. It surveys eight different appraisal products including reviews and FHA appraisals and addresses appraisal turnaround time, which many say is the biggest obstacle to quality today. While Working RE’s earlier survey included only non-AMC appraisal reports, the new survey draws no distinction between AMC and non- AMC appraisals.

The new fee survey will provide appraisers a snapshot of today’s appraisal fees nationwide. The value of the survey depends on the level of participation. The survey assumes assignments that are not complex (complex assignments require higher fees) and is anonymous for appraisers. The results will be available no later than May 1, 2017 for free and updated regularly as the various market areas become more populated. It is designed for appraisers to reference when setting their fees. It can also be used by lenders and AMCs to measure their fee and turn-time policies. The data will be available to the government, AMCs and the public at large.

To weigh in with your customary and reasonable fees for various products, click here.

About the Author

Isaac Peck is the Associate Editor of Working RE magazine and the Director of Marketing at, a leading provider of E&O insurance for appraisers, inspectors and other real estate professionals in 49 states. He received his Master’s Degree in Accounting at San Diego State University. He can be contacted at or (888) 347-5273.

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Comments (8)

  1. You hear a lot about VA fees, but this means nothing without knowing the requirements. VA has some of the most reasonable set of requirements out there. Three comps, MC form and an opinion of value. Cost and income at your discretion. You don’t have to give anybody any status and the VA leaves you alone as long as you are on time. Here is the best part – nobody is really allowed to question your judgement or conclusions unless they do the same scope of work, so you don’t get any BS about comp selection or adjustments as long as you explain them. Lenders are not allowed to overlay any additional requirements without paying you more for your time – which most do not.

    I would really like to see the next iteration of this article blend fees with requirements.

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  2. My lowest fee is $2,500 and for SFR Litigation it can be as high as $10,000+. After 35 years in the Biz I would be bankrupt at $750 for SFR form report. It takes two solid days just to do research and get calls back from sources for a basic SFR and $750 for an appraisal is ludicrous. 5 units apartments start at $3,500 and over $4,500 for 10 units and starting $7,000 to $12,000 over 40 units. I just make a reasonable living that still does not allow me to fund retirement and the wife covers health insurance with her government job. It takes 8 to 15 days to finish one valuation as a narrative report and a basic SFR form report over two days. I laugh at those that do 2 to 3 a day and every single expert opponent in court can easily be crushed as poor research and analysis. I now charge $450 an hour for commercial and high end residential litigation and not a single client complains when you can have great results. Survival in this business is going high end and have litigation and consultant skills. Very few of us do very high end titanium narrative appraisal reports and analysis and it would be nice to see more high quality appraisers. Great research and killer sales data means fewer adjustments and proof of everything. It takes a huge effort to find the great comps and analyze them to where the support becomes viable and clear. Problem is that it can take many days and hours to gather the data and for $750 one would go broke.. In some areas of super high end homes there is a need for litigation appraisers with high skill set. in 2016 I did a lot of SFR starting at $5,000 to $8,500 for just the valuation portion and $450 an hour. I have even completed $25,000 SFR valuations and there is a need for high end litigation. AMC’s are losers and offer nothing and a total joke, even those that think they have something to offer. Talk to lawyers and accountants and get into the litigation end and become a consultant.

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  3. I have been a licensed appraiser for 12 years and have not been able to upgrade to Certified because of the education requirement. I missed the deadline by only a couple months. I personally would love to see alternative experience accepted in lieu of a bachelors degree. It has seriously hampered my ability to obtain assignments and make a successful appraisal business…. I look forward to see how this unfold. And yes… AMC’s have ruined the appraisal profession.

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  4. The updated game is to simply waste appraisers time with a never ending series of micro managed per order fee and tat request emails. Never stating a fee, but instead wasting countless hours of appraisers time, fishing for the lowest cost and fastest appraiser vendor. An increasing volume of amcs and lender distributors alike are now using this method, rather than simply stating fair and current fees up front. Things will continue to get worse, before they get better. The race to the bottom continues.

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  5. by Jeffrey A Patterson

    Are you noticing scope of work is missing from these conversations… not all are reports are the same. While AMC might be looking for good, fast and cheap. Some appraisers have been redefining “good” by increasing their scope. We not to be assuming all appraisals are completed to the “minimum” required by USPAP

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  6. My rebuttal to an AMC 12/09/2014 for a purchase appraisal I compelted:

    I will formally rebut the comps in the report only after I know who submitted these so called better comps. Regardless if I am provided with the information I am going to file a formal complaint with the PA Appraisal Board on the basis of appraiser corrosion to inflate the value of a property for a purchase as these comps are a joke and only requested due to their sale price and not to their location or comparability to the subject. All of my comps are located within 3 miles and in the subject market area. Due to the limited sales I has to use comps different in age and gla although they are the best sales within the market area which best reflect values of the market area which I commented within the appraisal report.

    Subject is 13 yrs. old 1.48 lot, 1052 gla 650 square basement of usable area with the remainder of the basement (300 square feet) being a 1 car garage

    Here is the complaint on my comps:

    Comp #2 is 43 years old as opposed to subject property being 13 years old.
    Comp #3 was in inferior condition and on a main road, as opposed to a quiet rural back road.
    Comp #4 is similar in style and age, but in a development with smaller lot size.

    My response:
    Comp #2 is 1.5 miles from the subject, is similar in gla, and within the market area, brackets the subject bath.
    Comp #3 is 1.87 miles from the subject, similar in gla, basement square footage useable area, brackets the subject site, and located within the subject market area.
    Comp #4 was employed due to its similar age and although inferior in condition it has similar square footage of usable basement area and is within the subject market area.


    3928 Barachei Dr is located 6.37 miles NW and is 1611 above ground gla, and 45 years old. Complaint on my comp 2 is it’s age although requested comparable is older in age than my comparable #2 and is 6.3 miles away.

    106 Forest Dr. 1740 gla, 1740 square foot basement, 3.71 miles away, 44 years old, 2 car garage. Again, comp is out of the market area, significantly larger in gla, and older in age.

    1175 Witmer is 1.87 miles S.W., on a smaller .90 acre lot and although originally built in 1986 it was destroyed by a fire in 2013 and rebuilt. Therefore its effective age is new and condition rating based on the photos is between a C-1 and C-2. It is superior to the subject in condition and marketability and only sold for $184,000.

    I understand your company is relaying sales provided by a third party although its obvious they are looking for sales with a specific value regardless of location and comparability and this is becoming a recurring issue which needs to be brought to the attention of the state board.

    Jim Burkett

    Certified Residential Real Estate Appraisals
    FHA certified covering MD, PA, and VA for over 12 years
    (410) 374-4323
    (443) 927-7457 fax

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