Mortgage lenders are willing to pay higher fees based on complexity of an appraisal assignment, but not on the appraiser’s experience and education; however, appraisers who have a professional designation are more likely to be hired, according to a study on customary and reasonable fees released Aug. 13 by the Utah Association of Appraisers.
The Utah Residential Real Estate Appraisal Fee Study consisted of two surveys, one for Utah mortgage lenders and one for Utah licensed and certified residential real estate appraisers, although the questions asked about appraisal fees were identical in both surveys. Specifically, both groups were asked to provide their estimate of typical appraisal fees for 2013 for five different appraisal types for properties located in urban, suburban and rural areas of the 29 counties in Utah.
The surveys were emailed to all licensed and certified real estate appraisers, as well as to all licensed mortgage lenders, four times over an eight-week period that began April 16, 2014. The emails were sent to 4,332 mortgage lenders and to 1,434 real estate appraisers.
About 670 individuals, or 15.5 percent of the lenders contacted, responded to the survey, and 576 individuals, or 40 percent of the appraisers contacted, responded.
Seventy-six percent of lenders who responded said they typically pay additional or higher fees for appraisals of complex, unique or very expensive properties. When asked about the typical price increase for a complex property, nearly 75 percent of the appraisers who responded said they charge extra fees for complex assignments — the amounts vary and are listed in the report.
When it came to appraisal experience and education, 89 percent of the lenders who responded said that appraiser experience/education does not affect appraisal assignment prices, and 79 percent said that appraisal licensing level plays no role in their fee structure.
Although lenders may not be willing to pay more for a designated appraiser, 53 percent of the lenders who responded said appraisers with professional designations are given deference over undesignated appraisers when placing an assignment.
The survey revealed that 79 percent of the appraisers who responded said that they were not designated by a national appraisal organization, but for those who are designated by a national appraisal organization, 63 percent are members of the Appraisal Institute.