Last week, I got a call about a divorce appraisal.
Straightforward assignment. 1,800 square foot home, lots of recent comps, nothing unusual. I quoted my usual fee which is on the higher side for my market for family law appraisals. The woman on the phone paused and said, “Wow, you’re cheap.”
That surprised me. I’m not usually the cheapest. I’m not the most expensive either, usually on the higher side, if anything. Then she said, “The first company I called quoted me double your price and then some.”
For this property? That didn’t make sense. So I checked everything again. Still a basic, cookie-cutter home. No red flags. How could they be double my fee, no way. Then she said:
“I’m buying out my spouse, and I want the appraisal to come in as low as possible. That company told me they usually come in low on divorce appraisals in situations like this. Do you do the same?”
And that’s when it clicked. My gut feeling was that the quote wasn’t just high. It felt strategic. Like the fee wasn’t just for the report, but for a specific result. I couldn’t help but wonder: Was she being sold a low value for a higher than typical fee? I don’t really know, just speculation on my part.
Like I have done many times before with other clients. I explained to her, clearly, that’s not how this profession works. Appraisers are supposed to be independent, impartial and objective. I told her I don’t care if the appraisal benefits her or her spouse. I care that it’s supportable, market-based, and defensible in court. And if an appraiser is advertising that they’ll “usually come in low” when it helps the client? That’s a huge red flag.
I asked her if she wanted to schedule and she said she’d call me back. Well, she did. She ended up calling me again and we now have the appointment scheduled in a couple of weeks. Looks like she decided to pay for true market value and not the lowest value!
This is why we, as appraisers, need to ask the right questions up front. Divorce and other legal appraisals often come with expectations. Some clients don’t understand our role. Others know exactly what they’re asking for, and hope we’ll play along.
That’s your moment to hold the line. Say no to pressure. Say no to being “the low appraiser” or “the high appraiser.” Say no to turning your credibility into a commodity. Because the second you bend, you break. And once your reputation’s gone, there’s no invoice big enough to buy it back.
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Comments (2)
Unfortunately, there will always be appraisers who will position themselves for work based on predetermined results. Working for those clients will eventually cause problems for the appraiser.
As far as fees go, I used to provide a flat fee, and still do when the SOW is obvious. Usually I was happy with the work:fee ratio, sometimes I would come out ahead, sometimes I would lose out. If the property was “not typical” my typical fee was no longer relevant and I no longer cared how it compared to other appraiser fees.
Actually, the discussion of the fee with the client is when you can contrast your work with the work of other appraisers. Do you provide four sales and some pre-written commentary? Or, do you provide a robust data driven market analysis based on absorption rate, supply trend, ratio of price cuts to sales, pending sales, and listings; SLP ratio, expired and cancelled listing analysis, new build competition, affordability, etc. Do you forecast the market via illustration of your market analysis and analysis of pending, active and expired/cancelled listings? Can you provide a reasonable and supported synopsis so your client can make strategic decisions? If an appraiser can do these things, eventually he/she will be eating the lunch of the biased appraiser, especially in a courtroom setting. Some clients want this information and will pay for it, others want a number and don’t care about the details.
I always prefer to talk with potential clients over the phone. I would suggest appraisers develop an interview protocol so they can quickly define the appraisal problem and determine the scope of work of an assignment. Once these two components of the assignment have been determined it will be relatively easy to determine how much time will be needed to provide credible results. The amount of time is what I base my appraisal fee on.
A different twist on your experience just occurred to me. I recently was engaged for a residential assignment with an environmental component and some verification of data challenges. My fee was quite a bit higher than others, however I was awarded the assignment I believe because I was the only appraiser who provided this information to the client. This is a case a little extra up front due diligence and where “knowing your worth” paid off.
Thanks for the thoughtful comment Steve! I agree that chasing predetermined results might win short-term work but it always catches up to the appraiser. For sure, all appraisers shoudl have an interview protocol. Good point about doing a little extra due diligence up front can be the difference between landing the job or losing it.