Surviving the Slowdown


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Surviving the Slowdown

by Kendra Budd, Editor

IInterest rates are up and appraisal work is down. “Real estate is cyclical,” is the adage often repeated by appraiser old-timers. Buckle up, they say, here comes the downswing.

While the actual volume of appraisal work has only declined to the equivalent of a slow month in 2018 or 2019 (See Market Update: How Slow Are We Really?), the volume of appraisals has declined over 60 percent from the busiest month in 2021 compared to the later (slower) months of 2022.

The experience of appraisers varies widely. Some local markets and some appraisers are still fairly active. Meanwhile, other appraisers report they’re only doing one or two appraisals per month! The variance between local markets and individual appraisers is stark.

The result is a general panic amongst appraisers—especially those appraisers who are getting nearly no work at all. Even the larger appraisal firms (with deep pockets) who’ve spent the last few years aggressively training and recruiting appraisers, acquiring small appraisal firms, and rolling up their competitors have rapidly changed their tone. Layoffs. Budget cuts. Retraction.

Appraisers’ sentiment is showing up in forums, Facebook groups, and personal conversations across the U.S. Some appraisers are even looking for other jobs while waiting for work to “pick back up.” One appraiser on Facebook writes: “My son just finished his training and is now working as a security guard. Hoping things pick back up and he will want to get back in it, but right now there’s not enough work for both of us.”

Another appraiser suggests driving buses as a viable solution for his peers who are struggling, “Every school district in the nation is short of bus drivers. You can make good part-time income and have summers off. They train too!”

For the 30,000+ appraisers who have built their businesses exclusively around traditional residential mortgage work, things are getting bad. Commercial appraisers are feeling it too, but to a lesser extent.

The question is: what can appraisers do to survive the cycle? Do they have to venture outside of appraising to put food on the table—or are their other ways to utilize their skills?

A common trait for the many appraisers who are not seeing a major slowdown right now, is that they made the decision early on to diversify their client base and the type of work they do.

In a prominent Facebook group, one appraiser explains: “Interest rates went from 3% to 6%! Slowdown will happen if you’re only doing lending work.” Another appraiser commented in agreement that the problem wasn’t necessarily the slowdown, it was the AMCs and lender work. They wrote, “I got rid of almost all AMC work about seven years ago and most lender work in the last couple years. Private work, litigation, estates and other work is very busy because of the closing and slowdowns of the courts during COVID.”

Ryan Lundquist, a Sacramento appraiser who focuses exclusively on private appraisal work and author of, reports that demand for divorce appraisals skyrocketed
during and after COVID-19. Unfortunately, being in constant close proximity to one’s significant other didn’t strengthen every relationship.

The common thread is that those appraisers that do private work aren’t feeling the same effects of the slow down. They never relied on one type of business or client as their main source of work.

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Weening Off “Mortgage” Dependence
In the old days of appraising, before the real estate crash of 2007/2008, appraisers were much more likely to network with other real estate professionals, hand out business cards, and build direct relationships with mortgage brokers, local banks, and even real estate agents.

“The real estate appraisers of old used to network more, market their services, and sell themselves more than today’s modern appraiser,” remarks Mark Skapinetz, an independent real estate appraiser in Georgia who operates a 100 percent non-lender appraisal firm.

However, Skapinetz theorizes that the business model of appraisers changed substantially after the 2008 real estate crash in a post Dodd-Frank and HVCC world. “Anybody who came into the profession after the crash came into what we call a ‘nameless and faithless business.’ AMCs had taken over the mortgage-lending work. All appraisers had to do was fill out a sign-up form on an AMC’s website, give their credentials or coverage area, and their fees—then they started getting work. There’s no relationship there,” Skapinetz explains.

The result was that many appraisers became conditioned to sign up for AMCs, then sit and wait for orders to come in. “Instead of constantly selling their services, marketing their business, and looking for new clients, appraisers that came after the crash only know AMCs, because that’s all they were taught. When AMCs and lenders stop sending orders, appraisers don’t know where to find other business. They don’t know how to get private work, so a lot of them are scared to do it. Many don’t want to get involved in divorce work either, which is very lucrative. Appraisers just don’t know where to start,” Skapinetz says.

The biggest obstacle in an appraiser’s way, is themselves, argues Skapinetz. “You see it all the time on message boards and on forums, where appraisers are screaming about the lack of work. It’s not 1990 anymore; we have the internet. There’s a lot more ways to find work out there. When your main marketing in the last 10 years has been filling out sign-up forms with AMCs and checking your email waiting for orders to come in, it can be daunting to explore business outside of the traditional mortgage model,” Skapinetz states.

Non-Lender Work
Once an appraiser decides they want to build a truly diversified business, there’s plenty to learn and do.

First, Skapinetz suggests that appraisers look to their colleagues. “There are a lot of great appraisers who are killing it in the private sector right now. It’s great to look at what other appraisers in your area are doing. How are they keeping their business afloat? How do they interact with other clients? What services do they offer? You want to do your research,” Skapinetz recommends.

The best way to start non-lender work is to begin challenging yourself. “Find your niche, find something that no one else in your area is doing. During this tumultuous time in the industry, you’re going to want to find ways to make yourself stand out. If you’re not putting in the time and effort to diversify your business, then you’re falling behind. You need to be seen in order to start getting that work,” Skapinetz advises.

There are many different types of non-lender appraisals you can do, such as, tax rebuttal, pre-purchase, pre-listing, divorce, estate, and IRS-related work—just to name a few. Learning how to do these other types of appraisals can be the difference for your business during a recession. “Learn how to do other types of appraisals, like high-end luxury homes and farms if they’re in your area. Learn how to do divorce work, and litigation work to go to court. Learn how to work with consumers and real estate agents. There are so many niches that even I am still learning the ins and outs of them,” Skapinetz tells us.Some niche non-lender work that appraisers can pursue include:

• Property tax consulting and appeals• IRS settlement appraisals• Divorce appraisals• Estate appraisals• Prelisting appraisals• Home measuring services• Floorplan services• Relocation appraisals• Bankruptcy appraisals• Eminent Domain appraisals• Right-of-Way appraisals• Department of Transportation appraisals• Cash/investor appraisals• Probate appraisals• Bail bonds appraisals• Rent schedule assignments• Title Companies and collateral appraisals• And more!

In terms of how to get these assignments, Skapinetz recommends a combination of networking, sales, marketing, and of course, you need a website. “My advice is that appraisers need to do their research, but also you have to put yourself out there. You have to have a good website and you need to know how to talk to people. You can’t just perform an appraisal and hide behind the narrative of “you have to speak to a lender.” With private work, you need to take responsibility to talk to your client. You need relationship skills and you need to position yourself as the expert in your market,” recommends Skapinetz.

Optimizing Your Lender Work
Of course, many appraisers will opt to continue working for AMCs, lenders, and credit unions. For those appraisers, Business coach and Chief Evangelist at True Footage, Blaine Feyen, says that building relationships is absolutely key. “The downside of the AMC business models is appraisers really make no effort to develop relationships within that AMC. They often don’t get to know anybody, they don’t collaborate, they don’t know any names. They just take the orders and complete them. They’re operating in a transactional mindset,” Feyen says.

The solution? Appraisers need to focus more on relationships. Relationships matter everywhere; they’re especially important in non-lender work, but they’re still important—yet often discounted and ignored—in the AMC and lender world. Those appraisers who built strong relationships with their AMC and lender clients, who returned phone calls promptly, never “went dark” with their clients, always turned their assignments in on time (or early)—they are the ones who are still getting orders even when times are slow. “If you want to be treated as a nameless, faceless appraiser who just accepts and completes orders, then don’t be surprised when orders stop coming when things slow down. If the people working at the AMCs, local lenders, and credit unions know your name, are familiar with you, and like you, then you’re more likely to get work. Pick up the phone and call them and introduce yourself. Build the relationship,” Feyen suggests.

While many AMCs are bidding out assignments to appraisers and shopping for the lowest fees, that is not the case with all AMCs or lenders. All other things being equal, you will be more likely to be a preferred vendor if you are actively building relationships with your clients and the staff at the AMCs, lenders, and credit unions you do business with.

While many AMCs are bidding out assignments to appraisers and shopping for the lowest fees, that is not the case with all AMCs or lenders. All other things being equal, you will be more likely to be a preferred vendor if you are actively building relationships with your clients and the staff at the AMCs, lenders, and credit unions you do business with.

Relationships Matter
Relationships are even more important when it comes to non-lender work. Feyen has seen time and time again where appraisers seem to go wrong in their way of thinking. “If you’re comparable in some way, then you’re also replaceable,” Feyen articulates. That is exactly why it is important for an appraiser to diversify their business in a variety of ways, he argues.

One of the challenges for appraisers is that non-lending appraisal work requires a vastly different skillset. “Appraisers need to have an open personality as well as sales skills, especially when they’re talking to a homeowner or agent directly,” Feyen explains. He suggests appraisers even need follow-up skills in order to differentiate themselves from their competition. “Lots of private work is referral based, so one client refers you to another, and so on. Instead of getting a constant stream of business, you have to provide great service to each client and follow up and ask for referrals,” advises Feyen.

So, why is the non-lending side more relationship based than the lending side? Well, Feyen theorizes because appraisers aren’t required to do anything except perform on the lending side. “Lending and non-lending are two sides of the same coin; however, they require two different types of personality and sales skills. You don’t have to do follow-up on the lending side, you don’t have to send out ‘thank you’ cards or have a personality at all. You especially don’t have to have any sales skills,” Feyen illustrates. This is all easier said than done, so Feyen even has something he calls the “Mindset Spectrum” to help appraisers challenge their current mindset in order to garner more business (Read Recession Proof Your Business Using the Mindset Spectrum).

Appraisers should be looking to form these relationships on all levels, especially if they want to diversify their business. Skapinetz also echoes this same advice, “People that worked prior to the crash had to build relationship skills and use them to find mortgage brokers, to find lenders. We built friendships with our clients. In the private side you go back to that relationship building aspect.” The appraisal profession is not often conceptualized as one built around friendships and relationships (at least not anymore), but perhaps those bonds will serve as an appraiser’s biggest ally during the slowdown.

Final Thoughts
With mortgage transactions declining, interest rates rising, and AMCs starting to carve as much as they can out of appraisers’ fees, it is now more important than ever for appraisers to (1) build relationships and (2) diversify their business in any way that they can. However, simply pursuing private and commercial appraisal work is not all that is necessary to succeed—your success is also going to rely heavily on your tenacity as an appraiser.

Both Skapinetz and Feyen think appraisers need to start doing more research, marketing, and forming strong bonds within the business if they want to succeed in the appraisal business generally, and especially in the non-lender arena. This is definitely a frightening time for a lot of appraisers, but learning new skills and increasing your capabilities as an appraiser is the first step in making your business more sustainable and surviving the slowdown.

Stay safe out there!

About the Author

Kendra Budd is the Editor of Working RE Magazine and the Marketing Coordinator for OREP, a leading provider of appraiser E&O insurance—trusted by over 10,000 appraisers. She graduated with a BA in Theatre and English from Western Washington University, and with an MFA in Creative Writing from Full Sail University. She is currently based in Seattle, WA.

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OREP Insurance Services, LLC. Calif. License #0K99465

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Comments (3)

  1. Your article was well done however, what about the trainees?
    With this slowdown how does a trainee find supervisors when there is no work?
    I personally have been told by 12 local appraisers that I have to wait until the market turns around to finish my hours.

    - Reply
    • Does anyone have any statistics or at least a good estimate of the percentage of appraisals that are done each year for non-lender work? I keep hearing veteran appraisers say they’re staying busy with non-lender appraisals but I’m skeptical that most appraisers can suddenly start picking up regular work for divorces and estates.

      - Reply
  2. Agree with all of the above. However, turning your business into non lender work takes years. I changed my business model 10 years ago. 80% of my business is non lender mostly due to my involvement and I mean heavy involvement with the local Real Estate Board and my internet presence. Anyone who does not have a good website is missing out on alot! Everyone these days are checking websites and your REVIEWS on that website. So if you want to survive this downfall, start now and realize it takes a long time to develop that bond with the non lender clients. BUT once you do it will pay off in spades!

    - Reply

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