Be a Forward-Thinking Business Owner

As I teach my business model to individuals across the country, I somewhat frequently encounter appraisers who are offended by my methods for whatever reason. Those who hear me talk about my business model briefly, sometimes think that I am cutting corners and as a result either being. unethical or sloppy.

The truth is, technology and good principles of business have made it possible for us as appraisers to be extremely successful without putting in eighty-hour work weeks on a regular basis. When I first started out as an appraiser, I was nearly working myself to death. I know what that is like, and I am so grateful for the principles I now know and am now able to implement in my own life. My goal is to help other appraisers make that same transition, so they can improve their own business and overall quality of life.  

My business model works. It is also legal, moral, ethical, and fun! I can say with certainty that my overall quality of work has improved tremendously simply because all my reports are checked by at least four different people, and I now have the ability to spend my time focusing on what I am good at: valuation. I encourage you all to learn more about the business model that has changed my life and join me in becoming more fulfilled business owners.

For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode: 180 Don’t Be An Appraisersaurus

11 Comments on “Be a Forward-Thinking Business Owner”

  1. Business Model. In other words, establish a relationship with many available off-site appraiser assistance sites (India anyone). E-mail the raw request to them and they fill it out and send it back to you within 24 hours. Rough comp the property, send it back to India to have them further fill out the appraisal, don’t forget to provide them with your MLS log-ins, Datamaster log-ins, and AMC log-ins (for annoying update requests). Personally inspect the subject, narrow comps, and again send to India this time with a rough sketch, comp pics, etc. Final assembly of the appraisal (in India) is by way of set pre-determined adjustments, pre-determined canned phrases, and as the words are from you, no need to review before sending off. Rinse and repeat 2 to 3 times a day to become that AMC star you want to be.

    Dustin, the above may not apply to you, but it applies to thousands of other appraisers whom we are competing against.

    Seek the truth.

  2. You’re right about one thing “Bill,” the above does not apply to me. Nor have I encountered any appraiser to whom that kind of model applies to. You should be careful about who you spend time with. 😉

    1. Dustin, to say “Nor have I encountered any appraiser to whom that kind of model applies to” is to not know the reality of the big city sweat shops from years past, and to some point not understand the technology of the day, nor the temptations that unfortunately many give in to. When you work in a single county with 900 appraises (all within 25 miles of me), if you apply the 90/10 rule, in my case you might have 810 good apples (90%), and 90 bad apples. Having more bad apples closer to me (25 miles) compared to say your entire state does not by default make one a bad apple, but does allow exposure to the negative underbelly of this profession. Why do you think they now have limitations to the number of trainees one can supervise, in part its because of 20 man sweatshops in the past where bad appraisal practices (go inspect that vacant property without me), were engraved into a large portion of the current practicing population of appraisers.

      Ignore it if you want and delete those e-mails promising “Appraisal Services”, but many a bad apple have taken a similar business model and outsourced for pennies on the dollar compared to keeping it above board and in-house.

      Seek the truth.

  3. Dustin,

    Clearly there is a chasm of difference between an appraiser wisely & efficiently using his/her time and resources, and merely cutting corners to “save” time and merely appear efficient. As far as outsourcing certain appraisal functions to contractors, I can see how that could be the slippery slope toward merely cutting corners. Yet hiring outside contractors is a tried-and-true method of leveraging one’s time and efforts toward efficiency. Therefore, I think the lesson here is to try outsourcing to determine if it works for you and if, indeed, it results in a net saving of time. If it does (and the results of the outsourcing are positive), then continue it. If not, then you go back to the old way and do it yourself (while looking for other ways to be efficient).

    That said, however, what many AMCs and lenders want of us, helping them close loans in a hurry so they can book the fees, is understandable for them, but not so much for us. While it is imperative to our businesses to be efficient, as appraisers we still have to adhere to Standards 1 and 2 of USPAP, no matter how ardently clients demand otherwise. I honestly do not believe we can outsource the research and analyses that lead to the development of a credible appraisal and the writing of a non-misleading report. But the more “mechanical” stuff of an appraisal and report, yes, I believe that is possible to outsource those.

    I know I’ll get death threats from taking this position. But that’s OK, too. At my age, I have to do something to keep life exciting, right?

    1. Timothy, with 20 year stagnating appraisal fees (sorry Dustin your off), increased business expenses, scope creep/engagement letters, and thus increased time to complete, many have stepped over the boundary to the dark side and not only has it become a slippery slope, but a full on water slide park open 24/7.

      No death threat here Timothy.

      Seek the truth.

  4. I have taken Dustin’s 2 day class and got a lot out of it. Some of which I have put into practice in my own shop. I agree with Dustin, the more eyes that look at the report, the more perspective we have and the less chance for errors. It helps catch errors, missed comments, and speeds up the process. In my case, NOTHING is out sourced. It is all done in house.

    My Admin sets up the file and gets all pertinent subject info (MLS, Tax Assessor, Appraisal Council-Local appraiser online database, CRS from MLS, etc.,), does the initial review of the sales contract, and sends the file to me. I either list search parameters for another appraiser in my office for comps (subsequently reviewed/selected by me) or do the Comp search/selection myself. I do all of my own inspections. File is sent to one of the other two Licensed or Certified Residential appraisers in my office and the field work is cleaned up, comps pre adjusted for my review, and entire file including subject info and contract reviewed a second time by that appraiser. File sent to me for comp data review, final adjustments, brief contract review, and final comments. Subsequently sent to my Admin for final review…..She has been with me for 12 years and invaluable in the review process. She may recommend additional comments or additions to the report.

    I am not totally mobile at this point but working toward it. Next step is paperless but at 64 it is hard to teach an old dog new tricks. Maybe I’ll get there by the time I’m 70. I believe that you can comply with S1 and S2 and still delegate a lot of what we do to save you time and reduce turn time to the Client. Full disclosure, I charge full fees +++, no discounting. We complete some desktop products but I demand my hourly rate or don’t do them.

  5. Pierce:

    Thanks for the comments. Good to hear from you old friend. You forgot to mention that you also golf. 😉

  6. Good job Pierce. My office is running very similar to yours. Paperless is a lot easier than you think. Recognize that going paperless doesn’t mean you will not use paper ever again. Dustin has a good paperless seminar. You can certainly contact me for advice.

    As well, hiring someone to complete the tasks you don’t have to do/don’t want to do is the way to go in every business. Not just appraising.

    Mr. Johnson perhaps you should move to greener pastures. There are areas all over this country in need of good appraisers.

    1. Daniel, MY pasture is bright green and just because I know my individual results are NOT typical for my area, its important for others to understand whats reality for most locally. I keep my friends close but my enemies closer (AMC’s / don’t work for them) and if you want an example of big city abuse look no further than what came across my desk yesterday. No problem, just a 3.3 million dollar property with a 5 day due date for $310, over a holiday weekend.

      The struggles for many are real Daniel.

      Seek the truth.

      Property Address: 5278 Meadows Del Mar, San Diego, CA, 92130.
      Distance: 1.8 mi.

      Appraisal Fee: $310.00.
      Due Date: 5/30/2019.

      Appraisal Details:
      Property Type: Single Family;
      Loan Type: Conventional;
      Occupancy: Owner Occupied;
      Appraisal Type: Appraisal;
      Appraisal Form: 1004 Uniform Residential Appraisal;
      Loan Purpose: Other;
      Appraisal Add-ons: -.

  7. This is how I see it. I have asked a USPAP instructor, he agrees., If you have an “assistant”, pick sales that he/she deems are most similar to subject in size, location, quality, or any other relevant characteristics, which means that certain sales may used or omitted. This has the net effect of providing a range of value to the client. This range of value is defined as an appraisal under USPAP. Standards 1 & 2 apply., see advisory opinion 19. Now, Mr. Anderson also states it well, “I honestly do not believe we can outsource the research and analyses that lead to a credible appraisal result..” he is right… So if you have a non-appraiser, or have not disclosed the appraiser who did the research, then you are in violation of USPAP. You have not completed a credible appraisal assignment. The question begs itself, why pay for an appraiser. You don’t drive the comps, you don’t fill out the form, you don’t pick the comps, etc.. What’s that worth!

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