August 21, 2020
Believe it or not, some people don’t pay their real estate appraisal, leaving professionals hanging out to dry. With excuse after excuse, homeowners find ways to keep from paying for their real estate appraisal work. So, what does this mean for appraisers left with unpaid work?
Many professionals in the industry seek alternative methods to recover at least a portion of their money, if not all of it. To protect your Real estate appraisal business from non-payment, you must take into account two things: there are signs of people who pose a risk, and you must know your collection options.
Here are some tips for collecting your debt and be paid fairly.
Have a System in Place
Every appraisal business should have its collection process. A typical, single-family home appraisal ranges from $300 to $450. It varies depending on several factors, including the home’s size, the value of the property, the condition of the property, and the level of detail involved in the appraisal. If you don’t have a structured collection process, you should create one.
If you don’t have an efficient collection process, your cash flow will continue to struggle. Having a well-planned set of collection steps to follow consistently allows you to be consistent in getting paid for appraisal work completed.
If your state has an AMC bill set, you should get informed on its collection procedure. For example, in Texas, the state’s appraisal management companies must pay an appraiser to complete an assignment no later than two months after the date of submission of an appraisal.
If the debt is not satisfied after 60 days, the board may reprimand the AMC, suspending registration or even an administrative penalty of up to $10,000 for every violation. Having a good understanding of your state’s bill increases your chances of collecting on invoices.
Real estate appraisers can opt to send a letter to clients stating they’re trying to collect a debt. The lack of response will end up sending their information to a third-party company, like a collection agency or attorney. If real estate appraisers choose to use this option, they can use one locally or nationally.
Going the Legal Route
Other than utilizing a collection agency, another chance to collect on a debt may be filing small claims in court in your local jurisdiction, primarily wherever the property appraised is located. If you end up winning, you may file a lien against the party until payment is made.
About Associations Liability Insurance Agency (ALIA)
The ALIA Team (part of the Riverton Insurance Agency Corporation), specializes in helping real estate professionals find the affordable and comprehensive liability insurance they need, without the hassle. ALIA dates its roots to 1991 with the founding of FREA, Foundation of Real Estate Associates. In 2013, ALIA was created to work with multiple insurance companies thereby broadening the portfolio of products to customers. For more information about our products and services, contact us today at (800) 882-4410.