Profile: Making $300,000 a Year Appraising
by David Brauner, Editor
When it comes to success, your parents were right; there’s no substitute for hard work and a positive attitude. Those looking for a secret formula will be frustrated by what appraiser John Ugrotzi says about his own success; when asked how he consistently earns $300,000 or more annually doing strictly residential work, he says simply, “You get out as much as you put in.” Indeed you do.
Ugrotzi, 60 has been appraising for 30 years. He works seven days a week from 7 a.m. until 10 p.m. (some days more). In 2006 he completed 1,000 appraisals and earned $300,000. And 2006 was not a particularly banner year for him.
And no, his personal life is not sacrificed. His marriage is intact; healthy in fact. He works out of this home and loves interacting with his wife during the day. In fact, she runs the office and has for many years. “I haven’t written a check in 20 years,” he says with a grin.
Once a month, the Ugrotzis get away for a four-day weekend, leaving on Thursday evening and returning on Tuesday morning. But while away, Ugrotzi does not unplug. His phone doesn’t leave his side; he answers and returns calls promptly just like when he’s in town. While on these “mini” vacations with his wife, he works remotely when he can squeeze in time (like when Mrs. Ugrotzi is shopping). His phone stays on until 10 p.m., same as usual, and this is the way he likes it. His typical turn time is five days when he’s in the office. When he’s away, his practice does not miss a beat. “Clients don’t even know I’m out of town,” he says.
If you don’t consider creating an excellent work product and providing stellar customer service “marketing,” then this is a very short section indeed; Ugrotzi does no marketing and never has. He doesn’t even have an ad in the phonebook. His business is all referral and always has been. His consistent flow of work can’t be attributed to long-term roots in one community either, as he’s only lived in his present market for five years, Tucson, Arizona. He sold his business in Colorado and moved to Tucson to help a family member who had difficult and serious health issues. When in Colorado, he appraised in the Telluride area, where his annual income was actually much higher. “The homes are more expensive there,” he says simply.
OREP member Ugrotzi may not advertise but he sure knows how to “market” himself. He says he consistently delivers a comprehensive and thorough product to his clients. As reported, his work ethic is monumental and customer service approach ingrained: he is always available. All this ties very neatly into his overarching philosophy, which isn’t a bad beginning point for any customer service business: “I believe in the Golden Rule,” he says.
Great Clients, Great Attitude
He says he has “great clients,” and he fires the ones who aren’t. He doesn’t have any single client who provides enough work to put the practice in jeopardy should there be a parting of the ways; he doesn’t get more than five to seven orders a month from any one client.
Unlike some appraisers, he is happy accepting work from appraisal management companies. “They pay about $75 per job less than full fee but there is never any pressure for value. If I turn down an order from them, I feel like I’m not turning down one appraisal fee, I’m turning down $25,000 a year in business that they send me. Why would I do that?”
Ugrotzi got his start in the Tucson market from the appraiser who appraised the (manufactured) home he purchased upon arrival. She was busy enough that when she heard the new Tucson resident whose home she was appraising was an appraiser too, she offered Ugrotzi overload work. “I made $100,000 the first year working with her on a 70 percent fee split. I worked with her for about a year and a half before I went out on my own. I have never taken one of her clients.”
The thing you notice first when you meet Ugrotzi is that he is open and friendly. After talking awhile, you learn his passion for appraising. “I love appraising and I love talking to people. I always make it a point to occasionally drop by and hand-deliver a report to a client; to shake their hand and thank them for the business. I want them to know me as a person.”
Staffing & the Virtual Office
As noted, Ugrotzi does only residential work. If he has a niche, it’s manufactured housing, which makes up about 40-50 percent of his practice. He has one assistant who works from home and one trainee. The assistant, who is disabled and housebound, does all the prep work for the workfile. Ugrotzi sets up the file number, address, city and state, and using remote access, the assistant helps build it, adding such things as legal description, lot size, zoning verification, plat map, zoning map, census tract, MLS sales history on subject, etc. His assistant earns $10 per appraisal. “He really likes the work and it saves me about 30-45 minutes per report,” Ugrotzi says.
There is also a trainee working with Ugrotzi who is one in a long line. Ugrotzi has mentored 12 trainees in the last 10 years. He tells a great story about a former trainee who was his Certified Public Accountant (CPA) when he lived in Colorado. The CPA was making about $80,000 a year and Ugrotzi’s income numbers looked so good that year, about $400,000, he wanted to know where to sign up. The CPA did sign up and learned the profession under Ugrotzi’s mentorship. Today he splits his time between CPA work and appraising, as he loves both. Ugrotzi says he stays in touch and is still good friends with many of his former trainees.
The current trainee, also in his mid 50s, is “retired.” He sets appointments and visits the property with Ugrotzi when he can, measuring and drawing the floor plan and assisting in writing the report. Ugrotzi visits every property and reviews every report the trainee completes. The trainee is paid $50 to $75 per appraisal. “I call him and tell him I’m going to be here, here and here and if he can make it, great. If he can’t, he just let’s me know. It’s not a big issue. I’m not his boss.”
If you have to write a bottom line for Ugrotzi’s success, it seems to be exactly as he says, “You get out what you put in.”