Moving Out of Residential Lending Work

Moving out of Residential Lending Work

By David Brauner, Editor

Cheryl Kunzler, SRA, began transitioning out of residential loan work two years ago for the usual reasons: she was fed up with lender pressure to hit values and to meet turn times that do not permit thorough reporting. What she feels after making the leap, however, is quite unexpected.

Kunzler says she is most surprised at how good she feels after moving away from loan-based residential work. “I’m energized and excited about appraising again. Mostly, I feel confidence that I now have enough skills to get work without having to compromise. I’ve given myself more choices.”

Just a few years ago, despite 28 years of appraising, Kunzler was accustomed to worrying whether she was losing a client each time she held her ground against a lender’s demands. When even her best clients began to pressure her, she knew it was time for a change. “Not doing all lender work feels more like appraising. As an example, I can use the best comp now, based on my expertise, and not have to explain to a lender or broker, multiple times, why it doesn’t fit Fannie Mae guidelines. With the pressure for turn times and to hit numbers, and the frequent struggle just to get paid, it just wasn’t worth the effort anymore.”

Kunzler does the following types of work: commercial, mixed use, apartments, vacant land, retrospective reviews, expert witness for disciplinary actions against appraisers, divorces, estates and houses of worship, as well as eminent domain, relocation appraisals and foreclosures. As a Certified General, she says she had the qualifications but not the competency to do many of these types of work. She says she acquired the competency by reading books, taking online and classroom seminars to educate herself and by being mentored by commercial appraisers.

She attended Appraisal Institute Chapter meetings and asked MAIs if anyone needed help. Under their guidance, and with the additional education under her belt, she completed assignments for them as a subcontractor. This is how she learned the ropes. Once her name was out, people began calling her. She works mostly from referrals from other commercial appraisers who are too busy, and from small lenders and attorneys who are referred to her.

Kunzler has been an Appraisal Institute instructor for 12 years; the last three years being the busiest. Currently, about a third of her income is from teaching but demand is slowing and she predicts she will have to be more proactive about marketing her appraisal business in the near future. One step is that she has gotten on the approved list of a major lender to appraise apartments and small commercial. She says teaching also helps because she is constantly learning from her students and making new contacts.

If she has a niche, it’s small apartments– six to eight units, that may be too small for the large commercial firms but just right for her, given her residential expertise.

Kunzler greatest joy is the challenge the new work brings. The biggest challenge is working out workflow issues. With residential lending, there typically is a steady and uninterrupted flow from the beginning to the end of an appraisal, but with commercial work, there is a much longer duration with periods of downtime while data and other resources are gathered. She says that the difficulty is gauging how much new business to take on during the downtimes to still meet all her deadlines. “Sometimes I don’t have anything to do and other days are very, very long. The planning is the biggest challenge.”

She enjoys the more challenging work but says she does not take away anything from the appraisers who do residential reports. “There are many talented appraisers who specialize in and are expert at residential appraising. There are a lot of intangibles, such as curb appeal, that are second nature to residential appraisers and that commercial appraisers may have long since forgotten about. But in the end, for me, it was just time for a change.”

Today, Kunzler feels less pressure, enjoys appraising more and is excited to be doing something new. She is glad she made the leap.

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