Thursday , 3 December 2020

Getting the Appraisal Fees You Are Owed

It seems like every few months there is news of another AMC shutting its doors and leaving appraisers unpaid for their appraisal services. I recently heard of yet another one in Washington State. Every time it happens, I send a frantic note to my office staff that sounds something like, “Will you check our database to see if this company [name of defunct AMC here] owe us any money?” Then I wait on pins and needles while they get back to me. If no money is owed, I sigh with relief, but if there is money owed, I get a little heated as I know I will likely never see that payment.

So, what can an appraiser do to collect the fees they are owed? Honestly, once you hear a client you have been working for has either filed for bankruptcy or gone out of business altogether, it may be too late. Sure, there is paperwork that can be filed. There is a legal process that can be participated in, but I would not get my hopes up. I have been through that process as a wanting payee only to find it is a lot of time consumption and waiting for deadlines with only pennies on the dollar paid in the end (if at all). Trust me, if you are not owed a lot of money by the defunct AMC, it is likely not worth your effort. Write it off and move on.

You should check with your state appraisal agency to see if the AMC has a bond in your state and to see if there are any protections it may offer. If there are, be prompt in filing as you want to be first in line as the bond will likely be quickly exhausted.

That being said, do not think there are not preventative measures that can and should be taken. There are and they should. In fact, the best chance of you getting paid for your appraisal services is to be aggressive about it BEFORE the company/client you are working for is in financial trouble.

First, remember why you are in business in the first place. You are not providing a charity here. I hope you like your job, but that better not be the only reason you do it. You work your tail off for one reason – to make money. So, do not forget the most important part of turning in an appraisal – the invoice! Make sure you understand each of your clients’ billing process. Do you need to send the invoice to a certain person? Does it get attached to the report or sent separately? Knowing how your clients want their invoices can make all the difference in getting paid now rather than later.

Secondly, have an accounts receivable process. Who sends the invoices in your office? How do you keep track of what has been billed, how long it has been, if there has been any follow up, and marking when a appraisal service is finally paid for? What? You do not have a process? Get one and stick to it!

Do not sit waiting to receive payment. Get aggressive with your clients. If you are not paid in 30 days, find out why. If you are not paid in 60 days, annoy them until you find out why and when you will be paid. Worried about losing a client over your aggressiveness? Don’t be. They were insistent you meet their turn times. In return, be insistent that they meet your payment turn time. If they do not like to be pestered for payment, they are likely a company you would not want to work for anyway.

Accounts receivable is sometimes a neglected aspect of our businesses. It should not be. Appraising is what you do. That is your part of the bargain. Paying you for your services is what they do. That is their part of the bargain. Make it a priority and you will likely not be left empty handed when one of your clients ends up closing its doors.

Have any comments or would you like to submit content of your own? Email comments@appraisalbuzz.com

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About Dustin Harris

Dustin Harris
Dustin Harris is a successful, self-employed, residential real estate appraiser. He has been appraising for nearly two decades. He is the owner and President of Appraisal Precision and Consulting Group, Inc., and is a popular author, speaker and consultant. He also owns and operates The Appraiser Coach where he personally advises and mentors other appraisers helping them to also run successful appraisal companies and increase their net worth. His free podcast can be listened to on iTunes and Stitcher. He and his wife reside in Idaho with their four children. He loves playing in the outdoors and watching movies indoors.

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2 comments

  1. Avatar

    Some sound advice Dustin, but the system is often rigged against us. Why does the lender collect an appraisal fee on day one, assign the appraisal in week two, receive the appraisal in week four, but under new regulations to take place in your state of Idaho, then get up to 45 days (post delivery) to pay the appraiser? Why in the above example does the lender get to hold the payment for nearly three months, while its the little guy (the appraiser) who extends credit to the lender ? Why does the Mercury Network charge my credit card on file within a few hours post acceptance, while its okay to have me wait nearly 90 days (example above) for my payment? Why does Global DMS require payment of their fees (delivery) prior to me being able to send the completed appraisal to my client? Why like clock work does FNC, Inc. (Appraisalport) charge my credit card on file at the first of the month for their services even though some assignments may only be a few days old? I agree on the importance of holding our clients to due dates (Idaho due in 45 days), but compared to the other parties noted above who often get paid in hours or days, it is again the appraiser who is last in line.

  2. Avatar

    The problem with annoying the client to get paid is not that the client will send business to another appraiser, it is that it does not seem to help get paid any faster. They still pay out on their time line. Then you have just wasted your time figuring out which appraisals have not been paid, for how long and then calling, emailing, etc. It is very frustrating that it takes some clients forever to pay for the appraisal, but they do not seem to respond badgering. Trust me I have tried Do you have a suggested script for calling and asking to get paid sooner than 30,60 or even 90 days in some cases? The answer always seems to be “when we sent the check” Just one more reason in the long list of why there are less and less appraisers want to be part of this profession.

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