What Does Your Appraisal Business Look Like in Three Years?

If I were to ask you to paint an accurate picture of what your appraisal business looks like three years from today, could you do it?  If you can’t answer this question, perhaps you are getting hung up on the word “accurate”.  Any individual can guess what the future might look like, but can you make that prediction with some sentiment of reality?

In an exercise such as this, it is easy to get paralyzed by so many unknowns that are outside of our control.  What will the markets do?  Will Fannie/Freddie come up with additional requirements?  What will my state board decide with that proposed rule change?  Meanwhile, the things we do have some control over can equally stump us.  What will my family dynamic look like in three years?  Will that great new assistant I just hired stick around?  Will my health hold up that long? There are always the ‘what ifs’ of life.  The question is: can you create some sort of game plan despite the hurdles that will surely come?

As I have studied the Greats, I have found a common theme; successful people have vision.  Those who find achievement in this life do not just sit back and allow it to happen.  Rather, they take the proverbial bull by the horns.  They look to a point in the future, spend some time visualizing what it looks like for them, and create a roadmap to get from here to there.

On the other hand, 98% (Brian Tracy’s number, not mine) of all people have no vision beyond what they are planning to have for their next meal.  Indeed, most people could not tell you what their business and/or life looks like Business-Plan-feat102115one year from now, much less three years down the road.

As I interact with appraisers in person and online, I find a common theme, we appraisers in general are discouraged and generally fearful of the future.  It is not surprising given what we have been dealt over the past few years.  Scope creep, lower fees, challenges beyond our control, and hints of being replaced by some super-special Zillow matrix make it difficult to keep the old chin up on our present condition, much less our future.  Despite this doom and gloom, there are plenty of appraisers who are making a decent living and loving what they do.  How?

Though there is no one, single success model that fits all achievers, there are some general patterns that I have noticed.  Firstly, they keep mostly to themselves.  Rather than paint a bulls-eye on their chest, they go about doing their jobs and running their businesses quietly.  Secondly, they generally have a good attitude. I have heard the axiom “attitude is altitude” ad-nauseum, but there is still merit to its overall sentiment.  I notice some appraisers spend so much time and energy complaining that I have a hard time figuring out how they have time to do any appraising.  Successful appraisers have a system. They are continually refining and making their models better, and it works… consistently.  Finally, business owners who have vision last.  Not only are they setting goals (which is better than setting no benchmarks at all), but they can tell you exactly what their business looks like at the end of this year, next, and three years from now.  It is not a vague “I hope I am still around in 36 months,” but an illuminating “I will be doing 60% non-lender business, working 35 hours per week, have three employees, and netting $145,000 per year.”  The more specific the plan, the more focused one can be on its achievement.

The problem with most of us is that we either don’t stay focused on our plans or have no plans to begin with.  Frankly, the latter is probably the case more than the former.  We work day-to-day and paycheck-to-paycheck.  A house does not get built without a blueprint and a business does not change without a plan for doing so.

We should all be actively involved in changing our current appraisal climate on a grand-scale.  Join a coalition.  Be active in what is going on at your state board.  Write letters.  Attend think-tank organizational meetings.  Speak up!  Do not be satisfied with the status quo, but real change is faster and more effective within the walls of your own office.  What are you doing to make your life easier tomorrow than it is today?  What will your business look like in three years?  If the answer to that question is, “About the same as it looks today, I suppose,” perhaps it is time to sit down and create a vision.

As first seen in the Appraisal Buzz

20 thoughts on “What Does Your Appraisal Business Look Like in Three Years?”

  1. Pingback: What Does Your Appraisal Business Look Like in Three Years? | Appraisal Buzz

  2. What will my business look like 3 years from now?? Probably the same as it looked 3 years ago, my business hasn’t changed much in several years. I still go to the office, I still accept orders, I still do the research, I still drive around and look at houses, I still produce reports, I still go home at the end of the day…rise the next morning and repeat!! I realize that is a rather simplistic view, but I like it that way. I love looking at houses, talking to people and getting to see how they live in their homes. Each day is like a miniature adventure… and I love that I get paid to do it. As long as I get to do that, I am happy.

  3. Three years from now, we will probably be in a residential downturn. In Massachusetts and probably other States, after a 7 year slide, the market turned. It has been moving up since the Spring of 2012 and there may be some steam left in the rise as long as long term mortgage rates remain low and the Millenials want housing. I don’t see the Fed raising rates much this year. That would kill a fragile recovery and it is an election year. But, in 2017 or 2018, I predict an “adjustment” in the market, as is typicical of residential cycles. If that is the case, perhaps there may be a need for residential appraisal work. Tha AVM’s will miss the boat, as usual.

    1. “Tha AVM’s will miss the boat, as usual.”

      Not this time.

      The Corelogic Real AVM model is going to be so accurate on 95% of typical residential appraisal that the only residential appraisers that will survive are though with 80% or more NON lender work.

      Corelogic did not purchase RELS, Landsafe and FNC (Appraisal Port) for the appraisers, they purchased it for the ACCESS to about 90% of lender appraisal work product.

  4. Mark Rauchenstein

    Three years from now I see several changes in the way my office and I do business. I am a commercial real property appraiser in a government office. Sometimes things move slowly. In three years the commercial group will be using mobile pads for record updates and field work. The commercial group is just starting with a couple units to determine the enhancements needed, while the residential group has been using Ipads for a year. Software will have to be developed to address our processes, different from the residential unit. In three years more of our work force will be close to being out the door with the demand for younger talent; youth will bring in new ideas and challenge the status quo. The mass appraisal business will be quicker and done with fewer people, which may improve the quality and consistency of the work. We must embrace the changes. If we are not learning as appraisers we are not keeping up with our business.

  5. “being replaced by some super-special Zillow matrix.”

    Close but no cigar.

    95% of residential appraisal work will be replaced by the Corelogic Real AVM product.

    With Corelogic’s recent purchases of RELS, Landsafe and FNC (Appraisal Port) that give them direct access to EVERY appraisal report that goes to Wells Fargo, BofA and ALL reports delivered through AppraisalPort to EVERY other lender. Corelogic also owns numerous and large MLS systems throughout the country.

    With all that available data, the Real AVM product already is accurate within 1-3% of most “old fashioned” appraisal reports so any residential appraiser that does not have at least 75% of non-lending work will be looking for another job within 3 years. Good luck.

  6. Since HVCC and Dodd Frank I disagree with the statement that what I now have is a business. I’m sure that EVERYONE on your site does NO AMC work although 80% of all residential work now goes through them, however to those 50%+ who do AMC work, how is it that we have a business. The fees are determined FOR us, with TRID most all complexities fees have vanished, we are TOLD when something must be done, deadlines move up after the inspection, we are mandated to pay delivery fees, we are provided phone scripts, we are told we CAN”T include an invoice the report, etc.. I must be one of the great ones Dustin as I have a vision, but unfortunately is double vision based on my long hours, low pay and high stress level.

      1. Michael, do you honestly think the form filler appraisers of the world monitor and contribute to sites like this? When AMC’s control 80% of the market and what Dustin is calling a business, don’t be fooling yourself. Policies are being set to this 80% scale. However, I’m sure you are GOD in your local market, there are no AMC’s, and lenders gladly pay you $800 per appraisal because you answer the same questions so much better than the $250 dollar skippies of the world. Keep drinking the Kool Aid and tell yourself you operate a true free market business.

        1. Bill,

          About 5% of my appraisal work is lending oriented and I don’t work for any AMC. My residential fees start at $500 for a typical 1004. Most of my appraisal work is consulting for litigation purposes where my hourly rate $100-$200 depending upon the client and location. The reminder of my work is field reviews of complex properties where my fees range from $2000-$5000.

          My point was that guys like you that are already moaning and groaning, whining and complaining had best be looking for another line of work or retire because at least 75% of “AMC” type residential appraisal work will be vanishing in the nest 2-3 years.

          Good luck.

          1. Michael, I’m sure you fill out the form so much better than your completion, but you my friend are part of the problem. The backbone of the industry is residential lending and if you live in an area where you can command $500 for a typical 1004, good for you. But 95% of the industry is not like you or Dustin and its to those 95% that policy gets set. Be careful what you fight for Michael, as those same non AMC clients and the civil use work you speak of will soon be discounted as well.

  7. Hey Dustin, I appreciate you and how you put yourself out there. You’re the only appraiser that I’ve seen has the balls. Unfortunately too many appraisers would rather would insult without consequence. I would never normally comment, but I want you to know that there is quiet majority who enjoys your content, isn’t looking for an argument and is working hard to represent our field in a professional way. At the end of the day if the public loves us along with all the other important things we bring to residential lending, we will be much harder to get rid of. Keep it up, Ron

    1. I think there are many Ron who have no problem voicing their concerns into the appraisal profession and often times THEY have the soapbox to stand on. As a good appraiser I need multiple data sources to call something fact and don’t just take the authors word for it. What you are calling “insulting and arguing” I simply call challenging ones opinion. If you are a rural appraiser getting $800 per appraisal while quoting 4 week delivery times, is that suburban/urban appraiser complaining when showing frustration with below customary and reasonable fees ($250)? If you live in a area like Dustin where there are maybe 1,000 appraisers covering the entire state while I have 1,000 in my county and 4,000 within a few hundred miles, are my issues different then his? When AMC’s seem to cover 95% of the area that I serve, but may only be 25% for someone else, am I complaining when that maybe at the top of my concerns. Challenge and double check all of the information out there.

      1. Bill wrote:

        “When AMC’s seem to cover 95% of the area that I serve”
        Well boo effing hoo.

        Quit complaining and just MOVE then.

        What a crybaby….

        1. Michael, as I describe what is taking place in my area as a professional appraiser, I find it odd that you give no support. I welcome the opinion of others and on a local, state and federal level have tried to better the industry even in cases where my issues may be different than others. It is people like you who have been holding back this professional with your attitude toward others. If you live in an area where you get customary and reasonable fees, can quote your due dates, have little competition in the state, good for you, however if large parts of the US can’t do that, why not support the rest of us. The issue may not effect you, but if 80% of the workforce is facing these issues, why fight with your fellow appraiser. I have often said the reason WE as an industry don’t have a single voice is because our issues, are local, city, county, state and federal. I would ask for support Michael so the industry as a whole can survive, as simply telling someone to quit complaining and move to an area where they don’t have the geographic competence to work is not the answer.

          1. Bill J. Reread the post. You missed the point and are providing examples of about what not to do. Also, Michael M seems to be a d*#k, but something tells me he thought he was helping. But then my brother reminds me he is great at helping because he’s so much better to begin with.

  8. Corelogic is the walmart of the appraisal industry. There automated casa valuation model is killing the industry right now. They will mainstram it and allot of your private clients will use them over you. * not all but some. Along with 90% of appraisers loosing most AMC work and depending more on private market work. We all lose. I am boycotting corelogic and you all should to.

  9. This whole article was rhetorical/philosophical. This article helped nobody grow their appraisal business. You telling me that I “need a plan” does not help me formulate a plan. Who ever wrote this article is a moron and probably collects a check from Fannie Mae each month for saying crap like this.

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