Editor’s Note: According to long-time appraiser Barry Lebow, attending open houses is a great way for appraisers and inspectors to add clients, attract new business and become better professionals.
Benefits of an Open House
By Barry Lebow
With the market slowing down, appraisers are looking for ways to drum up business. I have found first hand that attending open houses is great way to grow new business.
After a downturn in the market during the 1990s, my 27-person firm had to scramble to stay afloat. In times that were very lean, one of my staff appraisers attracted more business than she could handle by simply making it a practice of attending open houses and meeting agents. After the first year, she couldn’t handle all the referrals she was receiving and had to pass work on to other staff members.
They say that necessity is the mother of invention. My firm lost our entire residential mortgage business, more than $1 million in annual fees, during the collapse of the trust and loan companies in Toronto, Canada. It was nothing we did wrong – our clients just kept closing, sometimes voluntarily, sometimes at the hands of the government. My appraisal firm had to re-invent itself. Attending open houses was one way we weaned ourselves from lender work. I swore to keep away from mortgage lenders there and then. Today, while we do some mortgage work, they are not the fill-in-the-blank reports that many firms rely on.
Home inspectors have learned to rely on agents for a large percentage of their business but many appraisers don’t realize what an excellent source of referrals agents are. Once they get to know you, agents will use you to help reduce an overpriced listing, settle an estate, work on a divorce and much more. I have also found that because agents earn such high fees, appraisers are able to charge more for their reports. Do not price yourself too low. For a basic divorce case, I would suggest no less than $350. Make sure to always get the money up front.
You will not only build your business this way but by getting to know agents personally, you can often get excellent inside information about recent sales. From agents you can also get relocation work. Relocation work may not be to every appraiser’s liking but the fees are higher and if you are the neighborhood expert, you can command the highest possible fee that a relocation company will pay.
Marketing at Open Houses
First, chose a neighborhood in your area in which you want to work most. Watch the Multiple Listing Service (MLS) religiously for open houses and start attending. Introduce yourself as a professional appraiser who wants to examine listings for use as possible comps. You really have two purposes- to meet agents and to view listings. Open houses are a great setting for making personal contact with agents because they are usually more relaxed and have time to talk.
Attend an open house at least twice a week no matter how busy you are. Make it part of your routine. Ensure that you have well designed business cards. Ask the agents for their cards and write the date and house on the back. If the agent says something like, “It’s my birthday today and I am working” or “I can’t believe that I am here on my anniversary,” record the date and event.
Stay in Touch
Stay in touch regularly with these potential new clients. Send each agent you meet an email reminder of who you are and let them know that you would welcome their referrals. Identify yourself in your emails as the neighborhood specialist for appraisals/inspections. You can also send a simple, monthly newsletter detailing market news and other information of interest.
Spreading the Word
When you speak to other possible clients, such as relocation officers, let them know that you are a specialist in your chosen neighborhood and that it is your policy to attend as many open houses are possible. Let them know that you personally inspect a good percentage of the houses in that area so you are familiar with most of the comps you use. Let mortgage companies know that you are a unique real estate professional who has expanded their body of knowledge by making yourself familiar with the comps/houses in the neighborhood. This will separate you from the pack. Reinforce the message that you are the neighborhood specialist.
Pretty soon agents will start to pass your name to attorneys and accountants and your business will grow. The one mistake you might make? Getting so busy that you forget to do the basics. I guarantee that you will be greeted with open arms by agents and that you will make an impression. If you are shy, what could be easier than going to an open house and just walking through? If an agent speaks to you, than you have your in. So get disciplined, get into a routine and attend those open houses.
Barry A. Lebow, FRI, CRF, CRA, DAC, C-CREC, is a Professional Land Economist, Arbitrator and Mediator. He can be contacted at: firstname.lastname@example.org.