We Appraisers Still have it Pretty Sweet

I know I am going to take some heat for this one (because some of you are 100% convinced that life stinks), but I just can’t take it any longer.  I am so tired and sick of the complaining out there among my peers that I just have to write something positive.  Call me an eternal optimist, but it just is not that bad…really, it’s not.

Over the past couple of weeks, I have experienced an interesting journey.  After writing and posting a few articles, not intending to be controversial in the least, my mailbox has subsequently filled up with hate mail.  I am not talking about the typical disagreements and suggestions that come with most of my articles, I am talking about cold-blooded, calculated, hate mail in the first degree.  Most of it I skipped, but some I read for entertainment value.  If email was rated by the Motion Picture Association, this stuff would have been NC-17 (do they still have that rating?). 

What was so controversial?  I guess it is an unpardonable sin to shine a positive light on the appraisal industry these days.  Some appraisers are so convinced that the government, AMCs, and others have dealt them such a rotten hand that to dare insinuate that there may be a silver lining is not a popular stance—for sure. 

Before I continue, let me ward off some of those who are already warming up their email fingers by acknowledging that there are some definite issues in our industry.   I get it.  Seriously, I do.  These are things I am vigilantly working on, and I am an advocate for forming unified coalitions of appraisers to help solve these problems together.  HOWEVER, it is not the end of our industry, and it does not have to be the end of your appraisal business as you know it. 

Okay, now prepare yourself….here comes the controversy….  Ready?  Deep breath….and….here it comes….“you can still make a pretty decent living as an appraiser these days.”  There.  I said it.  You okay? 

In my humble opinion, here’s the problem; too many of us are still living in 2007.  Well, the cheese has moved (if you have not yet read the classic book by Spencer Johnson, it is high-time you do).  All human beings have a hard time with change, but—for some reason—appraisers seem to have a more difficult time than the average bear.  I could philosophize on why that may be, but let’s just agree that it is.  A large majority (I am tempted to put a percentage here, but I am an appraiser and do not want to take time to support my findings) of the emails that came in had reference to the nostalgic days of less regulation, fewer lawsuits, higher volume, and much higher incomes.  Furthermore, there was much opining about how “if the politicians had just stayed out of the appraisal industry as a whole, we might still be…(fill in the blank).”  Again, I get it.  I have been in this industry for nearly 20 years, and I have seen a lot of change.  Yes, life is much different than it was just a few, short years ago, but…it is not time to hang up the old HP 12c…at least not yet.

WARNING:  The rest of this article is going to be an attempt to point at the silver lining.  Those of you who believe there is no positive to be had in our current state should stop reading now and dwell only on the difficulties we face. 

In this world of long unemployment lines, I think we appraisers have it pretty sweet.  If nothing else, we have a job!  I know; we are working harder and might be making less money that we were just a few years ago, but, seriously guys….we still have a job.  I have many friends and acquaintances who cannot say the same thing today.   You probably do, too. 

For those who are willing and able to adapt, we can still make a pretty good living doing appraisal work.  And no, you do not have to cut corners or lower your quality to do so.  In 2011, I had another great year—despite overregulation, lack of volume lending, and the UAD implementation.  On the other hand, I had to do some major restructuring and adjusting in order to do so.  My typical work day presently hardly resembles what I was doing in 2007-2008.  However, I would put one of my contemporary appraisal reports up against a 2007 report in a cage match any day.  Furthermore, I am not the only one.  I have worked with a number of appraisers this past year (through both The Appraiser Coach and Your Appraisal Office) who have reported similar successes.  

Frankly, though there have been some major changes come our way recently, I love appraisal work for the very same reasons I got into it in the 1990’s.  I am still my own boss.  I love dealing with the people and with technology.  I enjoy the challenge that each appraisal brings.  I experience something new every single day.  I do not have to do labor with my hands in the cold wind of Idaho (I see road crews daily, and thank heavens I am not in their shoes).  I am still paying my bills.  I can still…basically…make my own schedule. 

Oh sure, there are some changes I would like to see in the appraisal industry.  Some of them major.  But, for the most part, life is still pretty good for this (and many other—less vocal) appraiser(s).  For those of you who have recognized the changes—besides writing me hate mail—what are you doing about it?   

Now, go create some value!

 

——————————————————————————————————————————————————————————————————

 

Dustin Harris is a multi-business owner, but he has found most of his success as a self-employed, residential real estate appraiser. He has been appraising for nearly two decades. He is the owner and President of Appraisal Precision and Consulting Group, Inc., and is a popular author, speaker and consultant. He owns and operates The Appraiser Coach (www.theappraisercoach.com) where he personally advises and mentors other appraisers helping them to also run successful appraisal companies and increase their net worth.  He is also the Founder and President of Your Appraisal Office (www.yourappraisaloffice.com) which implements some of the systems he has developed to help lower costs and free up time for real estate business owners.   He and his wife reside in Idaho with their four children.

 

10 Comments on “We Appraisers Still have it Pretty Sweet”

  1. Well said. So many people whining, so little adapting and improving. I have made more money in the last 2 years than in any other period in my 9 year apppraisal career. Thanks for the great post.

  2. I think all of us have been through some kind of AA over the past few years, and by that I mean Appraiser Abuse. Last time I checked, perpetual whining isn’t one of the steps towards recovery! Well said and good advice…“go create some value!”

  3. Hi Coach
    I’m glad all is well with you and the 2 people who responded to this post. I don’t believe in whining either. That is why I and a couple of dozen or so other appraisers in the USPAP Group,in LinkedIn, had an in depth discussion/debate that lasted several months about what the industry problems were and what we need to do to solve them. The basis of the discussion was how to organize to present a united front, educate the public about what’s happening to residential appraisers in the industry and to create an organization to lobby state agencies and those in Washington tasked with regulation of the banking and financial industries. Some very good ideas were put forward but old socio-political prejudices rendered the discussion fruitless in the larger sense. On the more local level I believe the discussion probably has led to more interest in and creation of local coalitions and this will be good in the long run. One of the primary stumbling blocks was trying to fashion any organization that looked like or sounded like a union. Even though no one in the discussion promoted an actual union the discussion went off track when some of the group members showed actual hatred for even the semblance of one. You might want to go back into the USPAP Group archives to get a sense of the discussion.
    Most of the participants were lamenting about the financial predicament we find ourselves in. Lower fees, lower volume, the Dodd-Frank Act which was supposed to give us some relief but was manipulated by deep pocket lobbyists and reinventing ourselves primarily away from appraising for lenders. It was not a pretty picture. No whining, just telling stories about where we stand today.
    One post in that discussion resonated with me as I read your current post here. It was from an appraiser who stated that he gets tons of work from LSI and is pretty happy. I questioned him about the ability to make a living with LSI since they were one of the lowest paying AMC’s in the industry. If LSI was my only client I would have packed it in a long time ago. He then reminded me that he worked in the (I can’t remember which market) St. Louis or an Oklahoma market where his cost of living was very different than mine. I live and work in the NYC/Long Island market where heavy appraiser competition, lower fees and lower volume was the perfect storm to kill the golden goose. I cover 2 adjacent counties with a combined population of 3 million people. You would think that there would always be enough business to at least get by. But that is most definitely not the case. When I became an appraiser nearly 15 years ago there were 6500 appraisers in NYS. Now we are down to 4500 and the supply still exceeds the demand.
    If you view the industry from an Idaho state of mind things may seem a bit more rosy. Not so in the large markets. Most appraisers in the discussion who were also struggling were in the larger markets. The appraisers in smaller markets or who had niche markets such as farm or other rural work were not hurting as much. But all were willing to admit that the industry is fragmented and being abused politically by the bank and Wall Street lobbies. Just look at Dodd-Frank and the section on “customary and reasonable” fees for appraisers. The original bill stipulated that AMCs were to pay what was customary and reasonable in the market being evaluated. They could use the VA fee schedule, a survey, a la mode statistics, anything but their own fee schedule could be used as the standard. But the Fed was lobbied and the final version came out with an alternate approach which ALLOWED AMC’s to use there own fee schedules as an option. I don’t have to tell you or any other active residential appraiser what the outcome was.
    So when you say that you received tons of hate mail I don’t believe you fully understand the impact on the large or competetive markets throughout the country. Your posts have hit a very sore spot with some very dedicated and abused appraisers. Right now I would have to infer that smiley face posts make you a part of the problem and not a part of the solution. To be part of the solution you should stick to more creative discussions on how to deverisfy our businesses.
    I could be wrong of course but would appreciate it if you would answer a couple of questions for me?
    What percentage of revenue from your various businesses comes from actual field appraisal work?
    In your appraisal business what percentage is residential?
    Do you specialize in a non-residential niche market?
    How many appraisers in your market do you compete against?
    What is the population in your market?
    I believe these are benign questions which you should not feel defensive about.
    But the answers may surprise you, or me. At the very least I believe it will give you another perspective of appraiser life to consider………..Allen

  4. @Allen:

    I really appreciate the well thought out and detailed comment/questions. I think you have some very valid points and I appreciate you sharing them with me (and anyone who reads them here). I will try to respond to each.

    First of all, I appreciate your idea of a union style coalition. I am not anti-union. I am anti-union when they are in bed with politicians (which is most of them from what I can tell). Unions were developed, in the beginning, as a way to unite like-minded individuals to fight for a cause they believe in. I am a history buff-of sorts-and this idea fits perfectly with our Founding Father’s ideas of how our country should be run. Unfortunately, they are not run like that anymore (another discussion for another post) but the idea of getting coalitions together to help lobby/educate/etc. is an idea I have been pushing for a very long time. I speak often to these types of organizations (usually on the state or regional level) and they can be a powerhouse to get things changed/done where the individual cannot. Great idea, Allen! Kudos to you for promoting this idea. It would be even better if we could get an effective one on the National level (FYI, the large institutions right now do NOT do this effectively IMHO).

    Your comment about LSI and their fees is a valid one as well. It DOES make a difference where you work, but it also makes a difference HOW you work. This is what I was really promoting in the article. I get frustrated because so many appraisers have no solutions….just complaints. I appreciate the fact that you are not one of those. You seem to truly be looking at the problems (which are VERY real) and looking for actual solutions. That is what I like to see.

    Finally, you need to understand where my perspectives come from. I am not only dealing with Idaho when I write. Yes, that is my primary coverage area (I also appraise in an adjacent state), but my perspectives come from appraisers across the nation. I am dealing with clients on a regular basis from each of the 50 states in a variety of different markets. That is why I travel to their office to coach (rather than just write a one-size-fits-all book). I am able to observe them in their natural habitat, make suggestions for them which are tailored to them, and see them transform their business model for the better. The mindset which prompted the article is the fact that I hear so much complaining (and get so much hate mail) whenever I suggest appraisers start adapting and/or streamlining things. Often they figuratively fold their arms and say, “Well, that would never work in today’s horrible appraising environment.” Yet, I see my clients do it all the time. It really does depend upon your attitude and what it is you really want to accomplish. I am of the belief that one can choose to make lemonade or make a sour face at the lemons dealt him/her.

    Now, to answer your questions:

    What percentage of revenue from your various businesses comes from actual field appraisal work?
    The tax returns on my website are 100% from appraisal field work. The other businesses I run have separate entities (and thus separate tax returns).

    In your appraisal business what percentage is residential? 100%

    Do you specialize in a non-residential niche market? No. It is a typical market (if I understand your question correctly) and I do a lot of AMC work (probably about 80%).

    How many appraisers in your market do you compete against? About 40

    What is the population in your market? I do not know the answer to this question definitively, but I think about 500,000 total (I cover a large area).

    Hope this helps, Allen. Thanks for the discussion.

  5. Mr. Appraiser Coach, I just wanted to say I just stumbled on you’re website doing a search for chriss dodd bill that lead me to you’re article. I was so happy to see that you made you’re fortune doing self-employed, residential appraisals.

    You see, I am apprenticing under my father who does the exact same thing as you. Whenever I get the experience and finish my apprenticeship, I really want to take our business to the next level. Have employees, etc. So expect a call from me in the future for help regarding this.

    1. Michael:

      Thank you for the positive feedback. It is nice to see a newbie like yourself still full of hope. Do not let these old guys get you down. There is still a lot of money to be made in the appraisal industry if you are willing to adapt to a new reality.

      Good luck!

      Dustin

      1. Coach,

        Thanks for responding. I think it is fantastic that you are so active reading comments on you’re articles etc. Anyways, would you mind clarifying something for me? When you said it is nice to see someone new like myself “full of hope” does that mean do you think it is a daunting task for someone new to actually get going and be sucessful? I know my father took over from my grandfather, and he got his license with a High School Diploma. He has the highest license for residential and got grandfathered in. Is that what you mean? The standards getting in now are really strict and hard for newer people like myself to be sucessful in this field?

        I read on the labor stat government website that it is projected in the next five years modest growth in the appraiser profesion, but added that these are mostly family members taking over, etc.

        1. Michael:

          My ‘full of hope’ comment did not have to do with it being a daunting task to work at something and become successful. It is not easy, but nothing is that is worth it. It will be well worth your efforts, if you do it the right way. Do not let the standards or barriers to entry stop you from putting your all into this effort. My comment had to do with the fact that I spend a great deal of time hearing from pessimists in this industry.

          To their credit, there has been a lot of change that has occurred in the appraisal industry in the past few years (not much of it good). However, it gets a little old to hear appraisers simply complain or drop out of the industry all-together rather than girding up their loins, making some adjustments, and still being successful. What I do, as The Appraiser Coach, teaches them HOW to do exactly that. I can show almost any appraiser where they are stuck in their old ways, what they are doing well but can be tweaked, and where they need to completely transform (which is usually 90% of their business). Yet, rather than make similar changes, most appraisers are comfortable to just sit back and complain and hope that will somehow change things back to the ‘Good ‘Ol Days.’

          You, on the other hand appear to have the right kind of attitude. It was just refreshing to hear from someone who seems to get it when it comes to being successful. Bless you and…

          …Go Create some Value!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.