Survival of the Fittest

Wednesday, September 26, 2012

I received a response to my last article that had hoped for a more substantive approach to "surviving" as an appraiser. After some consideration, thought and consultation with some of the most experienced appraisers in the industry, here are some ideas for you to consider.

For new appraisers - find an experienced mentor who has the time and patience to work with you.
This insight will be valuable beyond measure as you will be able to avoid many pitfalls and have access to someone who knows the business inside and out.

Be unique.
If you can find a way to add something original and creative to your report, it may be worth a try. Does each report you submit look exactly like the one before? Are you recording only the bare essentials? That may come to light when you apply to a new company and they compare your reports. Consider utilizing valuation analytics in your day to day practice as part of your valuation process and outpace your competition. This will ensure your appraisal reports are even more professional and provide added explanation and support for your value opinion.

Be open to change.
Often people seek to stifle creativity and original thought and do not welcome change of any kind. So how do you respond? Baby steps. Don't try to change too much at once. Implement a single change or addition and if no one objects, wait before trying another. It may be that, over time, they prefer your method as they become accustomed to it. In other instances, they may not realize you have changed anything at all.

Should you seek someone's approval to make changes? That is the safest route but not always the most productive one. Many years ago, I worked with someone named Scott who was required to get approval at the district level before making any changes. Unbeknownst to his supervisor, he would change anything he saw fit to ensure that business would continue to increase.  Scott would often tell me, with a wink and a smirk, that it was "better to beg for forgiveness than ask for permission." Could this sort of maverick approach backfire and cost you in the long run? Absolutely, but fortune often favors the bold. (see Pliny the Elder for an example of where this approach truly "backfired")

Take the tough assignments.
Yes, they are a pain and no one wants them. But if it is the difference between having work or not, which is the better choice? Hopefully in the long run this will result in you gaining more assignments, although I realize this is not always the case. Learn to just say no when you can afford to do so.

Network with everyone.
Time is one of your most precious commodities, but to gain the most opportunities possible reach out to other appraisers and other peers, AMCs, lenders, regulators, lawyers, realtors…even people not related to the industry at all. You are increasing your name recognition and making new contacts. The more people you know, the more work you should receive. Be active on LinkedIn, Facebook and Twitter for work related issues.  Consider joining NAIFA (National Association of Independent Fee Appraisers) or other professional appraisal associations. Attend industry events including REO, underwriting, realtor, home builder and home inspector conferences.

Go the extra mile.
There will be times when the assignment becomes much more complicated than you ever imagined. You can battle it out for a fee increase or you can complete the report, turn it in and let them know the extra challenges you faced. Will this guarantee a fee increase? No. Will your efforts be noticed or appreciated? Perhaps not. But you will find out quickly who does appreciate the extra effort and who doesn't.

Go West, young man.
Easier said than done I know. But if your market has dried up and shows no signs of improvement, then a change of scenery might help. Not that long ago, an associate of mine was looking for an appraiser and one could not be found.  I am sure many of you are in markets where it is not the case and find this hard to believe. Look on Monster.com and see what states have the most opportunities.

Be proactive.
If new work is not available, take the opportunity to catch up on your continuing education classes or brush up on older notes. Visit state and federal web sites for the latest updates.  Read board minutes to become aware of upcoming developments.  Research to find the latest suggestions for preparing your cost approach, how best to extract out adjustments or effective age from the market and explain important information about the property.

Accept criticism willingly.
If a client contacts you for corrections or revisions, make it a learning experience and try to determine how best to correct deficiencies and misunderstandings. Learn from your mistakes and grow to be the best appraiser you can be. By being able to accept criticism, and not become defensive, you will only strengthen your relationship with your clients.

Strengthen your relationships.
A great deal of the frustration I encounter from appraisers involves the fees they are paid. But for the foreseeable future, the status quo is unlikely to change. Whenever possible, try to build the best working relationship you can with your clients. If you can do this, despite your displeasure with the current state of the appraisal industry, it should only benefit you in the long run.

Be flexible.
Many years ago my grandfather stressed to me the importance of having a multitude of skills and being able to do many things. During the Depression, people often could not find work in their chosen field and those that were unable to adapt faced a great deal of difficulty. But the people that could adapt and knew many trades were able to find work more easily and do many things for themselves.  How does this apply today?
Be versatile. If you specialize in just one area of appraising, work to become more knowledgeable in other areas as well. It will take time and patience, but having extra knowledge and experience is always beneficial.

Be bold!
There are other ways you can apply your knowledge to make a living. Could you use your knowledge to work in the banking industry? Do your years of experience give you the ability to write about the appraisal industry? Or would you be better off instructing new appraisers on how to do appraisals properly?  Perhaps you could make more of an impact by working for the government to improve the industry as a whole? If you have any ideas you could share, please do so.

Comments

I have one idea for both appraisers and the appraiser wannabe that you overlooked.RUN LIKE HELL AND DON'T LOOK BACK

Kevin-This was a fresh and positive approach that is long on taking individual accountability for ones own opportunities and outcomes. It is a shame that your thoughtful guidance was dismissed by the first anon comment. If everyone took the path you suggest, we would all be better off. Bob Rosing-- Dwellworks

Until fees are commensurate with education, experience, and scope wanted then this profession will continue to bleed appraisers and fewer will enter the profession.  Only when the number of appraisers has dwindled to get fees to where the typical 1004 is about $500 will this profession be worth training someone or a young person getting in the business.  Right now this "bubble" will not continue long.  Refis will eventually dry up in a few years as everybody has done it.    Soon there will again be an over supply of appraisers for the work available.  My suggestion for a young person is wait until about 30 to 40% of the existing appraisers are gone before thinking about this profession.   That could take about 5 to 10 years.  If you are young and things are going good now, be prepared to make a change in a few years.  It's going to happen.

        Interesting article with a lot of useful suggestions, but does it apply to our recent market experience?  As someone else commented, these suggestions are useful in a variety of normal business situations, not just real estate appraisal.  It occurs to me, however, that our current situation as real estate appraisers isn't exactly normal.                                                                                              Usually clients value good work and are willing to pay for it.  That last part is questionable right now.  Too many AMC's would like nothing better than for appraisers to put in more work and provide excellent quality appraisals with the understanding that they won't pay extra for that work.  In fact they have an almost unlimited desire for better and better work.  It might pay off in more assignments, but then so would dropping prices even more.                                                                                         It seems counter intuitive that doing more and more work on each appraisal at lower and lower prices is going to define "success".  If that were the road to success, appraisers would be about the most successful people around.  It sure doesn't feel like it.  The fittest and most successful people have probably already left the profession or are planning to do so.  Similarly, the fittest and potentially most successful people will likely not enter the profession as it is currently structured.                                                                                                      What is the best strategy for the rest of us who want to stick it out?  There aren't a lot of good choices.  In our shop we are trying to "muddle through" by working for only the best of the AMC's (from our point of view) and trying to get non-AMC work.  We try to do a good job, but within the confines of what is realistic for what the client will pay.  Hopefully, supply and demand will eventually sort the situation out and either fees will rise or the amount of work required will decrease.  I'm not holding my breath.