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The Appraiser Coach Podcast


Listen while you drive to and from appraisal inspections as Dustin Harris, The Appraiser Coach, gives you helpful tips, tricks, ideas, and principles which will make you a better appraisal business owner. Dustin has been a successful real estate appraiser for many years. As the Appraiser Coach, he has made it his life’s mission to teach other appraisers across the country to also succeed and thrive as real estate appraisal business owners. Join Dustin each week as he keeps you informed with the latest in the appraisal profession, interviews movers and shakers, talks to your peers about what is important to them, and shares with you his secrets to incredible success.

Mar 23, 2016

There were many comments following this recent blog article:

 

Appraisal Fees Do Not Tell the Whole Story

 

Bill was particularly outspoken.  I think he had some thought-provoking ideas, but I am not sure the whole story was explored.  Here is my attempt to address some of the issues. 


Bill Johnson
almost four years ago

Dustin, thank you for expanding on your thoughts both in the comment section of your blog post and via the podcast, however I think we may need to agree to disagree.
The point was not to compare you to me, but rather to compare two separate areas to each other to get a read on a local level of what the impact is on set statewide fees (VA panel), national level fees (set AMC split fees) or customary fees in general. Although for many reasons I would guess that San Diego/Carlsbad appraisal fees are lower than your area (1,000 appraisers in SD and 5,000 within 200 miles / high ratio of AMC’s, etc.), I’m willing to concede, round the corners and say our fees are similar (+/-).
As it relates to establishing cost of living standards, again it was not to assume I know your standard of life, but to rather collectively draw from averages as pulled from 50 DIFFERENT C of L categories in the Bankrate calculator. On a side note, with the state of CA announcing this week that the ENTIRE STATE is moving to a minimum wage of $15 in the next few years and future increases will be tied to inflation (C of L), the increase in the gap (your area versus mine) will likely explode from the current 80% higher in my area.
In listening to your podcast and your explanation as to perhaps your area being of higher complexity compared to mine (no way to truly test) I will again provide my side of the complexity story. My primary county of operation (San Diego County) exposes me to ocean/bay front properties, international boarders, several military bases, and has a diverse geography (Mnt, desert, ocean). The area also has a traditional big city downtown (high-rise condominiums), rural areas, agricultural areas, Indian reservations, and some of the most expensive real estate in the country. In fact, my primary zip codes have a median price approaching one million dollars (higher liability / Jumbo loans). San Diego is also a very heavy local and international city for investments and specifically with the influx of professional house flippers. As it relates to your local connection of appraisers, perhaps they are getting the cookie cutter properties as only a few times a year can I ever reuse something I’ve comped before (everything is a one-off assignment).
As it relates to travel, one must not only take into account the distance in miles, but also the actual TIME in traffic. Although my daily commute a few years back (3 to 4 days) was from San Diego to Palm Springs (126 miles one way), big city traffic jams (San Diego is 17th worst) often result in daily time commitments of a few hours. As a side note, a check of national gas prices today showed that my area was on average $1 more per gallon than in your area.
In bringing this all together Dustin, I truly believe collectively that our areas of practice have strong similarities (fees / complexity), however the outcome changes dramatically when you apply on a local level the cost of living and one’s final standard of living.
The entire point of my comments weren’t to debate the facts as I have laid out above, but to take them to help determine why on a local level appraisers can have such strong feelings about their profession. If we take the Bankrate data as fact (average person) it states that my area is 80% more expensive to live in as compared to yours. If at the end of the day an appraiser in your area gets to pocket a $1 after local expenses while under similar circumstances my area gets to keep 20 cents, we are not going to be looking at the problems of our industry from the same angle. At equal fees, appraisers in similar areas to you can live well ABOVE what is considered typical for the area (standard of life), however at the same fees, appraisers in my area live well BELOW what is typical. To better understand my point of view, reduce a $325 appraisal fee by 80% and live off of a $65 appraisal fee in your area. The goal is to have you live below what is typical for your area so that you can have a true understanding of what it’s like to live off of $325 in my area.
After you are in the above situation, there’s a very good chance your opinion might change as it relates to the requirement to have a 4 year degree, 2 years of apprenticeship training (6 years to make $65), and the importance of establishing customary and REASONABLE appraisal fees. Your ability to establish a small business with hired employees will most likely face much steeper challenges based on your gross income, etc.
Although the solutions to our problems are much longer than my comments today, the emphasis should be on the reasonable aspect of appraisal fees. As in, just because $xxx may be customary, the true reasonable fee may need to be double or triple in some areas when the C of L is considered. Here come the haters.