In the world of professional valuation, whether for equipment, real estate, or businesses, the question of refundable versus non-refundable appraisal fees may arise when speaking with clients and colleagues. While it may seem more consumer-friendly to offer a refund if the client cancels the appraisal after engagement, there are sound professional and practical reasons why appraisal fees should be non-refundable.
Appraisers begin expending time, effort, and professional judgment from the moment the lead is generated through the initial stages of engagement. Significant up-front work will occur, including scope of work quotes, engagement documentation, initial research, data requests, client communication, and preliminary analysis. A refundable structure doesn't reflect the reality that much of the value provided happens early in the process.
Appraisal work is often collaborative. The client needs to provide documents, fill out forms, and offer insights into their business and associated assets. A non-refundable fee signals that the client is serious about the process, leading to better communications and follow-through. It reduces instances where clients delay or abandon projects without regard for the appraiser's time.
Valuation professionals are often booked out with multiple engagements. Accepting a job means reserving time on the calendar, potentially turning away other opportunities. A non-refundable fee protects against lost income when a client backs out midstream after that time has already been allocated.
Like legal or consulting services, an appraisal is a professional opinion based on the appraiser's training, accreditation, and analysis. The fee is not just for delivering a report but also includes the application of expertise. Just as you would not expect a refund from an attorney after they've spent hours preparing your case, even if you settle early, the same logic applies to appraisal work. In dispute cases, especially, the knowledge that an independent valuation is ongoing may actually facilitate a settlement before the results have been delivered.
Appraisers must remain independent and objective. Offering refunds could create perceived or real pressure to align conclusions with client expectations to avoid dissatisfaction or chargebacks. A clear, non-refundable fee structure reinforces the arm's-length, professional nature of the engagement.
In summary, credentialed appraisers provide unbiased, researched opinions that often influence major financial and legal decisions. A non-refundable fee structure reflects both the value of that expertise and the commitment required by both parties to ensure a successful outcome. Make sure to set this expectation up front so there are no surprises and help create a mutually respectful working relationship from the start.