Our Office Manager, Tiffany Nordgren, sent the below email last week. The email is excellent b/c of its clarity, but also b/c it illuminates many issues we currently face.
1. Appraiser Shortage. There are too few right now and everyone has to pay extra to get orders picked up.
2. Cost for Better Service: We are bumping our rush fee (that we absorb) to $225.
3. Cost of Business/Business Decisions: B/c we order appraisals immediately upon receipt of contract, we have to eat the entire appraisal fee when a deal falls out of contract (we cannot charge the borrower).
Here is the email:
DVS [Appraisal Management Company] is implementing fee increases due to demand.
They are raising their base fee by $45 ($505 to $550) and their rush fees by $50 ($100 to $150).
Their management fees are not changing. This additional money will only go to the appraiser.
Ellen said this was after a lot of discussion with their appraisers and assessing where their fees are relative to other appraisal management companies.
We may technically be able to opt out of this fee increase but I think we should consider a potential fee increase along with a rush fee increase.
If we stay where we are now, other LOs will be $45 higher in base fees, and our total fee with our rush fee will only be $25 higher than other orders with rush fees.
We will lose our edge and our orders will not stand out for pickup against the crowd. Ellen said the majority of LOs are paying rush fees now because all appraisers are overloaded.
I think we should increase our base fees per their recommendation and also bump our rush fee to $225. Typically our rush fee is $75 higher than other rush orders. Bumping to $225 will give us that much distance again.
If we do that, we are looking at passing another $45 in fees on to the client and we’re absorbing another $75 (on top of current rush fees). This also, of course, bumps up the overall fee by $120 and if a loan falls out of contract or goes to another lender we are out $775 or more.
Please let me know your thoughts.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646