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Building a Secure Appraisal Business
by Joshua Walitt, SRA, AI-RRS, MNAA, CDEI
Like many of you, I got my start as a real estate appraiser in residential mortgage work. At the time, residential mortgage work was all that I knew, and for a time, all that I thought I could do!
As a residential real estate appraiser focusing heavily on 1004 work, I had blinders on and I had not adequately considered the many, many opportunities available to me. As I developed as a professional, I began to realize that the potential career paths, types of work, and the different roles available to a real estate appraiser vary widely. I think too often as appraisers we severely limit ourselves into what we can or can’t do and define the services we can offer to the marketplace far too narrowly.
The industry is changing, and I like to think of myself as being part of the change, rather than being apart from the change. As appraisers, we each need to ask ourselves: “Do I want to be a part of the change that is taking place in the industry, or will I be apart from it?” Either way, as things change in life and in business (and they will!), we are all faced with a choice about how we will adapt to the changes and overcome the obstacles we encounter along the way. As the appraisal industry continues to evolve and change, it’s important that we appraisers understand that we are capable of providing a very wide range of services in a variety of roles.
For example, here is a list of valuation-related services that appraisers are suited for and can diversify into:
• Residential and Commercial
• Appraisal Review
• Forensic and Investigative Services
• Property Data Collection
• Legal/ Litigation
• Financial Planning
• Tax Appeal
• Government and Regulatory
• Pre-Listing and For-Sale-By-Owner
• Disaster/ Stigma
• Pre-foreclosure and Short Sale
• Private Mortgage Insurance
• Condemnation & Eminent Domain
• Instructing, training, writing, and designing courses
• Bail Bonds
When I talk about diversifying your practice, I’m not talking about changing it overnight, or even changing it next week. It’s not as if your business is going to look entirely different next week or next month, once you start branching out into other valuation services. It can take months and years to build a highly diversified business, but as appraisers we should know where we want to go. When we talk about how we are going to overcome obstacles, we need to look at the opportunities that are out there for us as professional appraisers.
For those fond of reading between the lines, I am not predicting the demise of the residential real estate appraiser, or even a drastic reduction in demand for residential appraisal work. I don’t have a crystal ball. Rather, my point is that we are capable of much more. Residential mortgage work is important, but we don’t have to be “stuck” or trapped in a singular line of work. Instead, we have the ability, and of course, the choice to build a diversified valuation practice that provides a wide range of services and value to various elements of the valuation marketplace. Diversification is a good business practice for any professional.
The 1004 appraisal is a subset of “Valuation Services,” and independent appraisers who want to thrive in the future need to understand the need to become a one-stop shop for a wide variety of valuation services and avoid leaning on a business model that revolves solely around the 1004. Successful appraisers will diversify their businesses away from strictly traditional 1004 appraisals and will offer a wide range of “valuation services,” including traditional appraisals, desktop appraisals, inspections, evaluations, consulting, and other services.
In addition to operating as an independent fee appraiser, there are other roles that are available to us within the valuation industry at a variety of firms, including:
• Contractor Appraiser
• Staff Appraiser
• Compliance Officer
• Risk Officer
• Underwriting Manager
• Panel Manager
• Risk Manager
• County Assessor
• Valuation Consultant
• Tax Specialist or Tax Appeal Officer
• Chief Appraiser
• Review Appraiser
• Appraiser Supervisor
• Training Manager
• Professor, Author, Instructor
In many cases, the skillsets and experience that we develop as appraisers are not even limited to the valuation field in a strict sense. There are also a variety of related fields that appraisers can branch into, such as:
• Appraisal Management
• Property Management
• Software and Tech
• Home Inspections
When I presented this topic at the Appraisal Summit in September 2019, several of the attendees told me that they also hold a real estate sales license. Some appraisers have also found success being dually licensed as an appraiser and a home inspector.
After years of providing appraisal and consulting services, I shifted to the appraisal management side of the profession in 2016, as a way to grow professionally and develop additional skillsets beyond being strictly a residential fee appraiser. Recently, I returned to a focus on consulting. I also know appraisers, including myself, who developed their own software tools (usually with the help of an IT guy) and continued appraising while building up their side business.
How to Get Started
Once we understand the vast selection of different career paths, roles, and services that we can pursue and offer, the next question becomes: how can we get started? The first thing to decide is what we want our businesses (or our careers) to look like in 1, 3, 5, or even 10 years from now.
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Your path will look different than another appraiser’s path. Once you figure out where you want to go with your career, consider some action steps to take:
1. Update your resume, noting your specific qualifications, unique experiences, special classes, and any skills you have that may set you apart from other appraisers. Remember to include your work types, complex assignment types, speaking engagements (no matter how small), training and teaching. Most of us are not professional resume designers, so consider outsourcing it to get it “off your plate” by going to websites like Fiverr.com.
2. Take advantage of any advanced classes, new or more efficient and accurate methods of research, special training experience, and designations with professional associations. Rather than taking a class simply because it satisfies your need to obtain four or seven more hours of continuing education, take a moment to select a class that will move you towards your goal of obtaining new specialized knowledge that will give you an advantage.
3. Don’t underestimate the power of talking to other appraisers. If you’re a one—or two-person firm, understand that your interconnections with appraisers are likely limited. Meet with local and regional appraisers, to hear about best practices, good clients, requests for new types of services, industry news and laws and regulations. If you’re a residential appraiser, align yourself with a good commercial appraisal as a referral partner—to help satisfy each other’s clients where one appraiser may not be able to accept a residential or commercial property appraisal. (And you never know what you’ll learn!)
4. Join and attend networking meetings of the Chamber of Commerce. Find out where and when industry groups meet, such as the bar association, accountants, financial planners, real estate agents, bankers, and homeowners associations. Set a plan for how often you’ll attend which meetings, depending on the new space you want to expand into.
5. Ask for the business. It sounds obvious, but if you want to help a local bank set up their internal appraisal assignment and review department, they won’t know until you tell them. Talk to your clients regarding other services they may need and what expertise you can offer them. Sometimes clients won’t know what they need until you tell them. Talk to your colleagues so they are aware of what services you provide.
6. Have a presence on social media, including a website and LinkedIn. Write articles and blogs for your own website or as a guest on larger sites. Write about what you know and what sets you apart—tell others what makes you a “big deal.”
Whatever you want your career to look like in the future, be proactive now and plan ahead. Don’t wait until it’s raining…to buy an umbrella.
About the Author: Joshua Walitt is the principal consultant for Walitt Solutions. He provides short—and long-term consulting services related to valuation, education, review, and investigations. Clients include lending institutions, appraisers, appraisal management companies, attorneys, accountants, education providers, regulators, and others.
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