I have an unique point of view within the appraisal industry. I am constantly interacting with appraisers all across this country via email, telephone, Skype, webinar, snail mail, conferences, [breath] and workshops. I guess you could say I have my finger on the pulse of appraisers. In a very real way, I 'feel the pain' they are currently feeling because I hear it from multiple sources. Right now, most are feeling a bit of a pinch. Okay, that was an understatement. Appraisers I interact with have reported a decrease in business from 10% to as much as 40% in the past three months! Looking at the refinance numbers over that same time period, their numbers are not unexpected.
As human beings, we get comfortable in certain patterns. We get used to a way of living and a sudden decrease in our net income can have a very negative effect on our lifestyle. It 'cramps our style' as they say. Furthermore, it causes our stress levels to increase dramatically. High stress can sometimes cause us to make rash decisions. Often, the first impulse in a taxing situation like this is not the best decision we should make. In a drought of volume, appraisers will often think first of lowering fees. Probably not the best choice. Here are five options that you might consider instead.
1. Staff Appraising
There are many banks, lenders, government institutions, AMCs and others that like to have appraisers on their full-time payroll. Though the hiring frenzy for filling such staff positions is not as it was a few years ago, there are still opportunities available. It is not the same type of work you may be used to, but these positions will utilize your skills and expertise as a valuation expert.
I am a self-employed man. I enjoy very much the freedom that this gives me. I have worked for other people in the past, and I do not see myself doing it ever again. Therefore, staff appraising is not my first choice. That being said, it might be yours. Some people like the perception of security a regular paycheck gives them.
If a full-time staff career is not for you, there are many hybrids you might consider instead. For example, there are several, large organizations who hire appraisers nationwide. Though you are still allowed to complete work as an independent fee appraiser, you have resources, data, expertise, and—most importantly—orders sent your way as part of their team.
2. Expanding your Client Base
As a young man just starting out in my appraiser journey, I spent a great deal of time with cover letters and resumes in hand 'knocking doors' trying to get on the bank and lenders' approval lists. This was not easy work, but it paid off in the long-run. Though changes in the appraisal industry have somewhat changed how work is obtained, a decline in volume may revive the need to spend some time digging up new business.
Your best bet might be to try contacting new AMCs and filling out their applications. The Appraisal Buzz recently produced an extensive—and completely free—list of potential appraisal clients. (FREE AMC DIRECTORY) A little research online will often reveal if these new companies are worth working for before you actually take the time to register with them.
3. Expand your Area or Expertise
Is it time to brush up on your resume? A slow market may be the perfect opportunity to take some new classes, attend a workshop or two, or find a mentor in order to increase either your coverage area or specialties. For example, during a particularly slow time several years ago, I registered for and took a class on relocation appraisals. After spending some time with an appraiser that knows more than I do on the subject, I was able to add relos to my curriculum vitae. I now do a fair number of these products every year that would not have been available to me if I had not taken the time to learn the ropes when things were slow.
4. Non-Traditional Assignments
Some appraisers may think that "if it does not say 1004, it isn't an appraisal." Of course, there are many other types of assignments and many other types of reports available to a valuation expert. Refinance work has decreased significantly, and there does not seem to be much hope that it will resurrect soon. There is evidence that home equity is at a long-term high. Therefore, it seems reasonable that HELOC work may be the new sugar daddy for appraisers. It should be noted, however, that most HELOCs (as well as other secondary mortgages, non-performing loans, REOs, portfolio assessments, etc) do not usually use traditional Fannie Mae and Freddy Mac forms. Is it time to consider looking into some of these other products?
5. Non-Lender Work
In April of last year, I decided that I was tired of doing 98% of my appraisal work for AMCs. I started focusing on non-lender work with attorneys, realtors, investors, home owners, etc. By changing the look of my website, starting a regular blog, holding educational events for agents and lawyers, and even advertizing on the radio, I can report that we are busier than ever. In fact, while most appraisers' volume has decreased, ours has actually increased. We are as busy as we would like to be (some days a bit more). Non-lender work is the high fruit of the appraisal world. Due dates are long, ridiculous requests are often non-existent and customary and reasonable fees are, well, customary and reasonable. Non-lender work is not easy to obtain, but the reward is well-worth the effort.
Like all economies, the lending markets are never static. We may be experiencing a bit of a lull currently, but it will not last. The appraisal market will return (though it may look much different than it has in the past). Now is the time to position yourself for that return. Learn a new skill. Put on your salesmanship clothes and talk to the right people. Open yourself up for some outside-the-box products. Most of all, be willing to do things differently than you are used to. Your very livelihood may depend on it.
Now, go create some value!
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