Appraisal Business for Sale

[Meandering]

All appraisal businesses are built on the reputation of the Key Appraiser. If you're the lucky one to take over Dad's or Mom's business, even then there is some loss. Otherwise, it would have to be a very large shop with contracts in place for continued work.

 

[Mile High Trout]

Appraisers don't own businesses, they own jobs.

When the individual is absent, everything changes.

If you could run an appraisal business of that magnitude, it's only like a sliver of the challenge to set one up.

I've seen several 'appraisal business purchases' and these annoying things like client retention, underwriting agreement, lender approval, and such concerns seem to get in the way of the next guy recreating the magic.

Could a door to door downtown window washer who knocks on each door and rakes x per unit, have an accredited business he could sell based on net earnings? Appraising is door to door for this consideration. The product is an intellectual art. Do lawyers sell their businesses? They probably have contractual agreements if they do. How can you sell a business when there is specific lack of client commitment agreements in 100% of the client base? Talk about a limited buyer pool.

 

[Papoua Jose]

[FONT=&quot]An appraiser I worked for in the early years sold his business in 2008. To ease the transition for the buyer he stayed on in a consulting capacity for the first year while the buyer worked all the clients and established relationships.[/FONT]

[FONT=&quot] At the end of the first year the original appraiser formally announced his retirement and that so an so would be handling the business.
[/FONT]


[FONT=&quot]Several years later business is booming there, in part to the strategy of having appraisers scattered in several counties working out of their houses so the service area is huge.
[/FONT]

 

[normando]

Keep in mind that once you make so much money, you pay higher taxes. The profit margin gets smaller when you become more successful (Law of Obama). Running a business requires you to not just look at the revenues but the costs and stress.

 

[dacsavannah]

Appraisers don't own businesses, they own jobs.

When the individual is absent, everything changes.

If you could run an appraisal business of that magnitude, it's only like a sliver of the challenge to set one up.

I've seen several 'appraisal business purchases' and these annoying things like client retention, underwriting agreement, lender approval, and such concerns seem to get in the way of the next guy recreating the magic.

Could a door to door downtown window washer who knocks on each door and rakes x per unit, have an accredited business he could sell based on net earnings? Appraising is door to door for this consideration. The product is an intellectual art. Do lawyers sell their businesses? They probably have contractual agreements if they do. How can you sell a business when there is specific lack of client commitment agreements in 100% of the client base? Talk about a limited buyer pool.

I have to disagree, to a degree. Our shop has about 12-15 clients that send us work on a weekly or monthly basis. I could count on one hand how many of those relationships are represented by people we have a 'personal' relationship with. Only 2 or 3 that we've ever even met. We are 'on their list' and 'in their rotation', and as long as we don't screw up big time, we always will be. Many of these panels are 'closed' for all practical purposes. They wouldn't have any idea if the 'name' didn't come to the office for a year or ever again. This is a book of business that has some value. You might need the seller to agree to sign off for a year or two, but that's typical of any small business transfer.

Your window washer analogy would be more accurate if the window washer had about 4 crews who were each working full time servicing longstanding accounts with big companies that find it more of a nuisance to change vendors for a 5% price break than to just keep paying the existing one. All the while paying himself a competitive manager's salary and netting a tidy profit to the bottom line for several years running. I'd argue that that's a business, not a job. And one that someone would be willing to pay him for.

 

[The Warrior Monk]

There are appraisal businesses that have value, but the ones I've seen tend to be larger companies with several principles, often designated; are well established; and are diversified (notably they do not depend solely on residential lending assignments, if at all). When companies are set up like this, they rely on the company's reputation, than a particular individual's reputation. As a result, if someone leaves the business, the business survives.

 

[normando]

I would buy a reputable large appraisal company for the clients and the reliable appraisers already there. I would not do any appraisals and just manage and review.

I know of one appraiser who wants to expand and hire assistants and trainees. I think he's not making money. Hiring people does not mean making more money.

 

[Mile High Trout]

How does one establish a reliability factor for the lending clients continued servicing?

Every few months, there is another story of some altered approach or new person changing things up.

There was another CO poster here that told me a story of a new manager that outsourced the CU work to an AMC.

If you're working with a lending client with closed panel lists, you're right where you need to be. Still, it's a right to work scenario, changeable in an instant.

 

[Franco2]

I received a post card that was an advertisement for an appraisal business.

Located in the SF Bay Area, revenue of $241k in 2012, asking price is $175k.
The appraisal business includes residential, commercial, industrial, and undeveloped land.

I had heard that 1x annual gross revenues was a fair price.

That is nuts

 

[Franco2]

that is nuts.