AboutJ.R. Cabai, SLA Expertise I am a State Certified Residential Appraiser located in the State of Florida. I am an approved FHA (Federal Housing Administration) appraiser and have been recently awarded the Senior Licensed Appraiser (SLA) designation by the National Residential Appraisers Institute (NRAI). I can answer questions regarding appraisals, appraisers and reports of single family homes, condominiums, PUDs, manufactured homes, vacant land, estates, etc,.
Question Thanks for taking my question.
We are in the process of buying a home. This is the second appraisal we have paid for, due to the lack of comps in the neighborhood of interest. Anyway, the new appraisal came in at the value we were looking for, however, the bank required additional conditions on the appraisal (recent sales comps, and explanation of market stabilization). The appraiser has hinted that this will cost an extra $150, while the appraisal already cost the high end $400. Is this allowed? Seems like bait and switch to me since we are stuck with him.
Answer Michael,
That's a good question that there is really no answer for. The fees an appraiser charges is dependent on the Scope of Work that is required for the appraisal assignment. Most appraisals for lending purposes are pretty straight forward in terms of what is required. Therefore, appraisal fees are typically pretty consistent between appraisers in a given area for this type of use.
The requirements an appraisal must meet are often disclosed at the time the appraisal is ordered in the Engagement Letter. The things the appraiser did to meet those requirements can be found spelled out in the Scope of Work Section in the appraisal itself.
If the original appraisal met all the initial requirements, then the additional work requested by the underwriter (i.e., provide additional comps) could result in additional fees. However, if the underwriter is requesting clarification of something in the report (i.e., explanation of market stabilization) then I would not expect an appraiser to charge for that.
Think of it this way. If you hire someone to paint your house, you would tell them what colors you wanted, the quality of paint to use and when you want it finished. When the painter is done you look at his job and then decide you want two additional things. One, you want to know whether they used a paint brush or a spray gun to apply the paint. Second, you want them to add a second coat of paint to the door jams just to make sure they were covered completely. In this scenario, I wouldn't expect the painter to charge you to explain whether they used a paint brush or spray gun, but I might expect him to charge you to add a second coat of paint to the door jams. It is up to the painter to decide whether to charge for this, since the job itself was completed and met the initial requirements.
Since the fees charged by an appraiser are not regulated, the appraiser can charge whatever they feel is reasonable. Obviously, if an appraiser charges for things unreasonable, they will find themselves without clients very quickly.
