Reasonable and Customary Fees for an Appraisal.
By Craig Wallace, Certified Appraiser.
What are Reasonable and Customary Fees for an Appraisal?
That seems to be the question that many in the Real Estate Industry are trying to figure out. Prior to the HVCC, the Fees I would charge for a standard 1004 on a home under 2,000 SF was $375-$400. FHA was $450+. Since the HVCC, the fees dropped to $200 -$335. I was no longer able to collect COD, could no longer market myself, and lost all of my long term clients. But a funny thing happened to fees being charged to the borrower, they went up.
What did you pay for an appraisal on your last refinance or purchase? Was it over $500? Most likely. The appraiser only received 50% to 65% of what you were charged; the bank pocketed the rest as profit. So, I think a reasonable and customary fee is what the borrower has been paying. This shows up on your closing statement, form HUD1. This is what the market is; this is what the end user is accustomed to paying. The fee for the appraisal management company should be separate fee from the appraisal fee. The next time you have an appraiser over, tell him what you have been charged for the fee, but don’t expect him to tell you what he is receiving, because he is forbidden to tell you that. We can get removed from the list.
Some Agents and Homeowners think we are paid too much, but let’s look for a moment at what we have to do, and the hours involved. Personally, I spend about an hour doing the comparable research before I even leave the house. I can spend about an hour driving to the subject neighborhood and photographing all the comps. I can spend about 15 -30 minutes at the subject, more for larger homes. This includes measuring and inspecting. Then the drive back. Once in the office a typical report can take me between 2-5 hours to write. So, we have a total of about 5- 8 hours. A typical AMC fees is $295, so that is between $36 – $59 per hour. This does not include the cost of Gas, E&O insurance, MLS Dues, Continuing Education, Office Expenses, etc. So, this is at the low end of every other party involved in the transaction, but we have the most liability and the most oversight.
I personally feel we should charge by the hour and miles
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