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Hi all, I had a semi-odd experience this week. A gent phoned and asked for an appraisal of the contents of his late mom's home(trailer as it turns out). He said he compensate me for my time and he needed it for the estate attorney as she went medically bankrupt(the leading cause of bankruptcy in the US) and he would buy the pieces back from the estate. I had to constantly explain the different levels of appraisals to him which he did not seem to grok even as a retired Marine officer.
I took my 85y.o. mom along for fun(she has 70+ years of collecting & 40+ yrs of retailing experience in antiques) and I photo'd everything in the trailer, 80-90 pics. Some nice things, a handful of good things and some collectibilia. To make a boring story longer, I said I would fix the photos and attach a price to each one for value at the wholesale/auction level. He still seemed bewildered and 'wanted to be honest' in the values. I said this is what I would pay as a dealer to him for them(I wasn't buying anything though). I thought it would be another 2 hours work on top of the already 2+ hours work. He asked the fee and I had an invoice ready saying it was 195 so far and perhaps another 100-125 for a legal/professional opinion to submit to his atty to which he was astonished. I mentioned that if he had a certified appraiser, they would charge 10-15% of the values (maybe $3000-4000 total value including a civil war payment desk-that could be worth something and I was going to research it).
An hour or so after leaving, he phones and says that he will get his mom's friends to do the job and that he'd like to send me something for my time, $75. Round trip for the 2 of us was about 30-35 miles and an hour-ish. This time I was crestfalllen and he finally said $100 on his own cognition.
Is it me or was my fee out of line? 4-6 hours total time, another 45 mins on the phone with him + my mom's precious time. Certainly I should have mentioned prices beforehand so he could acquire his mom's pal's opinions for free!
And what's reasonable hourly fee that could be an industry standard?
Gobsmacked in FL,
Hi Jeff, I'm afraid I've got quite a few issues with this whole senario. Firstly, if your not a certified appraiser, then perhaps you should have a standard fee for giving this guy a "verbal opinion" on values.
I am a certified appraiser and do follow USPAP - the IRS standard for all appriasals, weather certified or not. It's very important to put your fees up front, and to expect payment for your time, in any circumstances. None of us can work for free!
There is a huge difference between a written appraisal report and a verbal opinion. That's the first problem. I would never have attempted to do an "inventory" without also providing a complete and legal appraisal report.
If you find yourself in this position again, my best advise to you would be this: Charge a flat fee just for going to the home, your choice on amount. Then charge by the hour afterward. Take a good "look over" of what is there, and give your honest opinion of approximate value of the estate as a whole. Say $5000.00 - $8000.00 ( just an example). You should have a standard form that has your business name, address, phone, etc, an area for you to write in your stated opinion of value, date, and designated places for both yourself and your client to sign - and they should sign this agreement before you even begin to look over the contents.
This way everyone involved will know what the expectations of your visit are, and the amounts charged are very clear. You May also want to include "payment at completion" which would be at the end of your on-site visit.
The client then would have been ready to pay you at the end of your visit, rather than "choosing" some other means of valuation, that is in no way accurate or even legal for that matter.
You would then have recourse, and would get paid. The whole idea of "certified/non-certified" written and verbal, valuation type used (Wholesale, Retail, Insurance, Replacement, etc.) is very complex and many disagree on what is or what should be standardized, but most all do agree on using the USPAP standards.
In the future, you may want to take some appraisal courses, through any of the appraisal orgainizations first, before attempting to do any valuations, just to be sure you have a clear idea of what it is your willing and able to do, and do use USPAP as your standard, always.
I'm sorry you have had a bad experience, but perhaps this now gives you an opportunity to educate yourself and your clients for the future. Best Wishes, Vicki H.
All good thoughts. And another friend had the same reply that it was a cheap learning experience. We both sort of danced around the topic of fees-me not knowing how much time/quantity and him just wanting a near free opinion for his estate atty. I think he ran the phone book looking for someone cheap-there are 2 big malls near him with 150+ dealers. And I did pretty much what you suggest-had a flat fee for the trip and gave him options for a final report; emailed pic w/prices per photo or a more detailed written report for more $.
I have taken an appraisal course in the 70s at Hofstra U(site of the final pres debate) which was a bit of a joke but I still retain some things from that.
We did bring >100 years of experience to his trailer-often better than a certified expert, particularly with the contents of that home.
In future, fees will be on an emailable menu so no ambiguities.
Has anyone heard of a percentage of total value as a fee lately? I heard that in 70-80s.
Yes, I have heard of that before. (Percentage of total on contents) but it's mainly a frowned upon practice, as it unnessasarily encourages the appraiser to "doctor" values, and that of course is unethical, and basically flawed at best.
Best practices are always to establish what you are willing to do and for what amount of $$. Like I said, I do charge just for a home visit - we must consider our time and gas needed just to go to the site. Then an hourly rate. This is important, because what I find is that once you get started, suddenly there are a whole lot more items being brought out by the owner(s) for you to evaluate - I have been stuck in some people's homes for over six hours!
So, imho, it is best to lay out your fee schedule ahead of time, and stick with it!