derstood by all parties, the engagement
letters are legally enforceable documents
in the event a collection needs to go to
court, Knight says.
The engagement letters help in
another way: They present the appraiser
in a more professional light with their
clients, who are often attorneys, Knight
says. Attorneys respect that type of professionalism. Though Knight has always
offered it as an option, attorneys and
other clients have not sought to reword
the documents.
Collections Process
Despite the best efforts, there may be
times the payment becomes delinquent.
Collection industry professionals recommend that any collection process begin
as soon as possible. Several studies show
that the more delinquent an account
becomes, the less likely someone is to
collect on it.
O’Rourke recommends contacting the
delinquent customer daily until payment
is made. With the customer likely to be
behind on other bills as well, the firm
making the most numerous contacts is
the most likely to get paid. “The squeaky
wheel gets the grease,” she says.
O’Rourke adds that the appraiser
should make sure he or she is contacting the right party to obtain payment.
The client might have one person or
department for contracting with an
appraiser and another for making the
payment. Richard L. Borges, MAI, SRA,
partner with Seymour, Ind.-based Borges
& Borges Real Estate Advisors, recommends going over the head of the initial
contact if the bill continues to go unpaid.
Call in the Professionals
Some lawyers and collection firms
specialize in collecting payments, and
may be needed if these efforts fail.
Kurt Olson, an independent attorney
based in Plymouth, Mich., recommends
that any collection effort should keep
the business relationship in mind. If it’s
an ongoing client or one who has good
potential for providing future work,
then the appraiser will need to start
with gentle methods that preserve the
business relationship while recovering the
appraiser’s fee.
Sometimes all that’s needed is a simple
collection letter (if the phone calls Mann
suggested don’t work). Even though Olson refers to it as a demand letter, it has
to be written “with finesse, rather than
trying to pound them over the head with
it.” By the same token, he says, “the appraiser needs to get paid.” So, along the
lines of Mann’s phone etiquette, Olson
recommends persuasive, gentle wording.
“If it is a collection from a consumer,
a letter from an attorney’s office advising that if payment is not made within
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