Tired Of Getting Stiffed?  Tips For Collecting Your Past Due Fees

Brian Hedges

Brian Hedges, Vice President of Appraisal Sales

Brian oversees the Appraisal Sales Department and is responsible for continuing the exemplary customer service that the sales staff is known for.  Brian’s main focus deals with extensive product and industry training with our representatives to ensure that our customers receive the best advice when looking for ways to grow their business, cut costs, and increase efficiency.  Brian enjoys reading history books, playing poker, and playing golf.


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You inspected the property, gathered the data, and wrote a professional, first-rate report. You delivered that report on time, as promised. There’s just one thing missing: Your payment.

If you’re like most appraisers, you didn’t get into the business because you love invoicing and collecting payments. But to stay afloat, especially in this economy, you have to. Here, you’ll find tips for collecting quickly.

1.  Get paid up front. If regular clients are slow to pay, ask for payment when you deliver the report. Your XSite can handle this detail, allowing clients to download the report only after they have paid for it with a credit card. For non-lender business, set up the expectation that you will be paid either at inspection, or when the report is delivered. Lenders and AMCs expect to pay you at closing, but homeowners have no such expectation.

The Client Payments Panel in Appraiser XSites. Appraisers can use it to set up pre-payments for appraisals.

To eliminate slow payments, set up your XSite (Enterprise level) to require certain clients to pay with a credit card before they download the report. It's a professional way to collect, and the money is deposted immediately.


2.  Can’t collect in advance? Notices and demand letters are your first step to collect on a past due account. Many appraisers are lax in their billing because they hate doing it. That’s understandable, but consistent billing is the key to getting paid. The sooner you send out a past due notice, the better your chances of getting paid. Invoice quickly after you deliver an appraisal, and regularly on past-due accounts. Send demand letters and duplicate invoices after 30 days, 60 days, and 90 days — following up with phone calls. Seventy five percent of all collections happen in the first 120 days. Your chance of collecting after this time goes down significantly. XSellerate can help you by sending out pre-written e-mails, automatically on a schedule you set, reminding clients of their past due status and asking for payment.


XSellerate sends collection emails like this one automatically on your behalf

XSellerate sends out automatic "past due" e-mails with links to the client area of your XSite. There, they can see history and make a credit card payment. If this doesn't work, we recommend you move on to phone calls.


 

3.  To collect quickly, the phone is your friend. Clients respond to phone calls. I know it sounds terrible, but does it sound worse than losing an appraisal fee?

If possible, don’t make collection calls yourself. An assistant who isn’t connected to the actual assignments will be less likely to let emotion get into the conversation and will stick to the facts. Likewise, the client won’t be able to get into specifics about the assignment if the caller isn’t the one who completed it. Keep in mind, no matter who is collecting: remain professional. Don’t joke, apologize, or minimize the debt. Don’t give the debtor the impression you’re not serious about the debt. Don’t share why you need the money, or your financial problems. This is their debt — their problem. You’re probably thinking, “I have no idea what to say on the phone” No problem. Try this:

This is FIRSTNAME LASTNAME from XYZ APPRAISAL COMPANY. I delivered a (TYPE OF REPORT) on (DATE), sent invoice number (123) on (DATE), and haven’t received payment of ($AMOUNT OWED). Can you tell me when I should expect payment?

On the phone, remember to be professional. Don’t allow the focus to drift to the property, a failed transaction, or anything other than the debt. You’ll want to focus on three facts 1.) You delivered the report on (X) date. 2.) You sent invoice number (123). 3.) You need immediate payment, or a date you will be paid. If they tell you they already sent a check, ask for the check number, and follow-up in a week.

4.  After multiple attempts, let them know your next step. It’s time to send a letter to the applicable state board or regulating agency. These agencies can’t make them pay, but the thought of tarnishing their reputation may make them act.
Example: “If this matter isn’t resolved by the end of the month, I’m prepared to file a complaint with the state board. If more time goes by, this will end up in collections and on your credit report.”

5.  If your calls and letters are ineffective, your next step may be small claims court. The amount you can collect varies between states, but the maximum amount is usually less than $5,000.

A court judgment is judicial recognition that the defendant is indebted to the plaintiff. A judgment may be helpful in cases where the client doesn’t even think they should be paying you. You’re never assured of actually receiving the money, however, since the judgment can only be enforced out of property belonging to the defendant. Once you have a judicial order, you can seize property. While lawyers can’t appear in small claims courts, you should be sure to consult yours before you go down this path of last resort.

6.  Download our free eBook. All this advice comes from our eBook “Get Paid: Proven Strategies for Collections, Sound Billing Practices, and the Role of Customer Service.” The eBook contains examples of collections letters, voicemail scripts, and a lot more than we can fit into this short article. Download it here.

MORE RESOURCES TO HELP YOU COLLECT PAST DUE APPRAISAL FEES


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