Working for national firm vs. yourself

[shrubberyvaluation]

IMO, the biggest drawback to the 4 x $2,500 sole practitioner scenario is that you will never be able to smooth your workflow. It’s inevitable that you’ll either have all 4 due at the same time or nothing due for three weeks. With delays in being engaged, delays in information, delays in setting inspections, even the most tightly choreographed assignments rarely come off without some burp in timeline. It turns in to feast or famine, both of which are equally stressful.

Some people don't mind it or at least tolerate it. My tolerance has gone down a little from the days I did all nighters, but I still don't mind putting in more hours a day short term as long as I know I will get a break eventually.

 

[Alamo Cowboy]

My only experience was at a national firm, albeit in a smaller market. The average report was a B or so. It was nice to have work almost always available, but it also meant that the guy with the relationship who bid $2,200 per property on a portfolio didn't care that the property in a non-disclosure state with limited data was going to take a lot longer than the one in a major metro area with a dozen comps already in the database. Either way he got his cut of the whole portfolio.

Learn how to market yourself in your small market and expand your marketing plan as you grow. There will be few commercial firm owners in small and mid-size markets. Take advantage of your experience. You can compete when your small vs. large commercial appraisal firms & succeed. Use a large firm's overhead to your advantage when pricing reports. Large firms typically win on contract bidding when they have no competition. To them many municipal contracts are repeat business and they automatically are awarded the contract. Other niches (land, commercial, apartments, etc.) will become evident to you as you work your market. Try being an "owner" and not "an employee". In the areas I worked even an independent contractor made much more than an employee.

 

[sputnam]

I've worked for smal local firms and for large national firms and for myself. There are advantages and disadvantages to each. I prefer working for myself. Which one you prefer will depend a lot on your personality... and, at the end of the day... it doesn't matter to the universe which one you choose.

 

[Michael S]

Learn how to market yourself in your small market and expand your marketing plan as you grow. There will be few commercial firm owners in small and mid-size markets. Take advantage of your experience. You can compete when your small vs. large commercial appraisal firms & succeed. Use a large firm's overhead to your advantage when pricing reports. Large firms typically win on contract bidding when they have no competition. To them many municipal contracts are repeat business and they automatically are awarded the contract. Other niches (land, commercial, apartments, etc.) will become evident to you as you work your market. Try being an "owner" and not "an employee". In the areas I worked even an independent contractor made much more than an employee.

I got out of the appraisal business a few years ago. I found that I couldn't do less than A/A+ work and the fees didn't justify that - nor did it matter to the clients who just saw the name of the national firm and not me as an individual appraiser. I worked for the government for a few years with real estate and recent bought an ecommerce business. I'm much happier running that with my wife and kids.

 

[Deleted member 126639]

The fees don't determine the scope of work the client does. You can write a perfectly credible ten-page report. No client wants more than a 50-page report, yet the vast majority are one hundred or more pages. Congrats to getting out, but appraisers are often their worst enemy. When most say an A quality report, they are not talking about a report that is brief, to the point, and easy to review. They definitely don't mean even a simplified Level C market analysis let alone paired sales or regression. Most I read are entirely written using passive voice, which not only confuses the reader but doubles the word count.

 

[Alamo Cowboy]

I got out of the appraisal business a few years ago. I found that I couldn't do less than A/A+ work and the fees didn't justify that - nor did it matter to the clients who just saw the name of the national firm and not me as an individual appraiser. I worked for the government for a few years with real estate and recent bought an ecommerce business. I'm much happier running that with my wife and kids.

Good for you. I assume your ecommerce business is outside the appraisal field. My wife and kids helped me market my appraisal business in years past. It was a family business.

My suggestion: Keep your appraisal license as long as you can. Consider it an insurance policy. My wife was a public accountant and gave up her profession to homeschool the kids. She helped me on bids, analysis, HBU and taxes. My wife kept her license until I retired 4 yrs ago, then she let her's expire. It worked well for my family. My kids helped do some of the mundane things in a report (securing plat maps, flood maps, property profiles, calling owners to verify a sale, etc.).

 

[shrubberyvaluation]

The fees don't determine the scope of work the client does. You can write a perfectly credible ten-page report. No client wants more than a 50-page report, yet the vast majority are one hundred or more pages. Congrats to getting out, but appraisers are often their worst enemy. When most say an A quality report, they are not talking about a report that is brief, to the point, and easy to review. They definitely don't mean even a simplified Level C market analysis let alone paired sales or regression. Most I read are entirely written using passive voice, which not only confuses the reader but doubles the word count.

I've never done commercial but I always see them as a large report that could be over 100 pages. If clients want it condensed to 10 pages and its possible to do so, why do they not do it?

 

[Deleted member 126639]

I've never done commercial but I always see them as a large report that could be over 100 pages. If clients want it condensed to 10 pages and its possible to do so, why do they not do it?

The Appraisal Institute Scope of Work text has a great example.

When the head of Freddie Mac puts a 50-page limit on reports, and you still see 20-page market analyses of plagiarized garbage in the Addenda (All Freddie reports are public) I can only assume ignorance or stupidity. I lean toward the latter, which is why appraisers are no longer respected in the broader industry.

 

[TheGrind]

I've never done commercial but I always see them as a large report that could be over 100 pages. If clients want it condensed to 10 pages and its possible to do so, why do they not do it?

In some cases, I would venture that it is because that is what the client has come to expect. "Paying by the pound" as it were . . .

 

[Deleted member 126639]

In some cases, I would venture that it is because that is what the client has come to expect. "Paying by the pound" as it were . . .

You don't want those kind of clients. They existed in the 1990s, which is why such garbage persists, but are rare today. There is no time and banking regulators actively discourage it.