Divorce Appraisals

[Rick Stillman]

For those few brave souls out there in appraiser land that do divorce appraisals... how many appraisals can you expect from your best clients in a month, on average?

I'm doing a little marketing on the side, and I need a scale of how to grade them. For example, an attorney that gave me three assignments would be a "B" client - and one that gave me four or more would be an "A" client. Maybe four is way too high. Maybe two is really the top. That's my question - what number is reasonable. I know the AMC game (10 a week if "the price is right") - but not the volume for attorneys.

This info will fit into a matrix of how I work with attorneys - kind of the way AMCs choose their "best" appraisers, but I really will be choosing the best ones to work with (unlike the AMC business model).

Thanks ~

 

[Renee Healion]

Lenders send work regularly and fit the monthly model. Attorneys, depending on the size of their practice, order in a less predictable fashion, according to their own needs. You may get the appraisal order, but then, they may need you later, subject to the progression of the case. A mix of the two types of clients can be good but managing the differing paces and timeframes is a challenge.

Rather than bringing the lender/AMC model to a different type of client, just assess them by how they are to deal with, how well they communicate with you.

 

[glenn walker]

I disclose that I quit doing them about 5 years ago but I had five different family law attorneys that would send me assignment and it was always hit an miss . Typically I would receive anywhere from 1 to 3 in a 90 day period. That market changed and at least in my area the attorneys are telling their clients to find their own-appraiser and the person getting the divorce will be the client. Many are also getting BPO'S from local Realtors.

I quit doing them because too many were ending up as more than just appraisals - receiving subpoenas to show up at court or depositions- Then attorneys trying to engage you as an-expert witness for very low fee's and finally dealing with some real wack-jobs -upset men threatening to kill you or upset women screaming you and her X-were in cahoots to low ball the value.

Anyway good luck there can be some money in it just make sure you have a solid and signed engagement letter from the client stating that you are doing an-appraisal for value purposes only. Make sure your engagement letter clearly states that you are not acting as an-expert witness and if for any reason you are required to show up in court your fee's are $$$ per hour. Unfortunately that does not prevent opposing council from naming you so expect to receive a few Subpoenas every year and expect to be making some trips to the courthouse declaring to opposing council and judge that you are of no use and essentially a hostile witness

 

[Rick Stillman]

Lenders send work regularly and fit the monthly model. Attorneys, depending on the size of their practice, order in a less predictable fashion, according to their own needs. You may get the appraisal order, but then, they may need you later, subject to the progression of the case. A mix of the two types of clients can be good but managing the differing paces and timeframes is a challenge.

Rather than bringing the lender/AMC model to a different type of client, just assess them by how they are to deal with, how well they communicate with you.

Thanks ~

A little more explanation might be helpful. I will be doing marketing for attorneys through MY channels, to the consumers that contact me about a divorce appraisal. I have a two-tier marketing system for attorneys - the ones that send me work get a very favorable way of me marketing for them - while the ones that don't send me work, still get marketing exposure - but it is not nearly as favorable or effective for them.

I feed the attorneys that feed me. It's a vicious cycle in reverse - in this circle, everyone benefits and it perpetuates itself.

For this reason, I need to have some sort of "scale" to measure which attorneys are helping me the most, and therefore get the best marketing. Think of ranking on google - it's very similar. If you perform good on Google, you are ranked high and will benefit. You do bad by google standards - you are also ranked, but it will not be nearly as helpful to you because you're ranking will be low - and you'll end up being on the 3rd or 4th page of Google. This is a similar concept.

Knowing the volume information will help me design this system better.

 

[Rick Stillman]

I disclose that I quit doing them about 5 years ago but I had five different family law attorneys that would send me assignment and it was always hit an miss . Typically I would receive anywhere from 1 to 3 in a 90 day period. That market changed and at least in my area the attorneys are telling their clients to find their own-appraiser and the person getting the divorce will be the client. Many are also getting BPO'S from local Realtors.

I quit doing them because too many were ending up as more than just appraisals - receiving subpoenas to show up at court or depositions- Then attorneys trying to engage you as an-expert witness for very low fee's and finally dealing with some real wack-jobs -upset men threatening to kill you or upset women screaming you and her X-were in cahoots to low ball the value.

Anyway good luck there can be some money in it just make sure you have a solid and signed engagement letter from the client stating that you are doing an-appraisal for value purposes only. Make sure your engagement letter clearly states that you are not acting as an-expert witness and if for any reason you are required to show up in court your fee's are $$$ per hour. Unfortunately that does not prevent opposing council from naming you so expect to receive a few Subpoenas every year and expect to be making some trips to the courthouse declaring to opposing council and judge that you are of no use and essentially a hostile witness

Thanks Glen. I've already done a few. I can handle the work and dealing with the people.

As far as going to court, I am COUNTING on it. My fee is billed per half day, at $600. If it goes over a half day, there is another half day fee of $600. They can try to hire me for a pittance if they want to - but it won't work. As far as being subpoenaed, I will have to abide by that, but it will be of no use to anyone, as I will not be nearly as helpful as I would be by being an expert witness. My pat answers if I'm subpoenaed will be, "That is all explained in the report. Read the report." I will notify the attorneys and/or clients of that ahead of time. Being that the case will be of great magnitude, I don't foresee a problem with them paying me. But if they don't, they don't. Their choice. When you get to the court phase, the time for being cheap is over.

 

[Renee Healion]

You are still dealing with humans who are responding to a changeable situation over a period of time. If you are trying to quantify and set up a system of metrics on legal work, then I think you will spend more time on tweaking your model than doing the work. Maybe not. I might even admire your applying a model to the AMC model and metric-app buying clients, as turnabout is fair play. It would be kinda diabolically funny.

If you have ever had to deal with a judge or a jury, you would see that the human side is not so predictable.

 

[Raven59]

Divorce work is random and generally fee sensitive. When I think of litigation work it's more along the line of diminished value, condemnation, loss in use, environmental contamination, casualty loss, privacy issues, soils and geotechnical issues, construction defects, title defects, real estate fraud, standard of care, nuisance and proximity conditions, mold and water intrusion, disclosure issues, and compliance review.

My work is geared toward hourly with many single jobs lasting months to a couple years. These jobs are not consistently being worked on but require a constant nudge to keep things moving forward. Several larger jobs can occupy "a lot" of your time and resources. Your mind/plan needs to switch from widgets to hourly billings. I find it very difficult to incorporate fee work in with the litigation jobs. Fee work/lending is very time sensitive and litigation is very research orientated (time consuming). The two don't mix well. Over the years I've learned to accept fee work only as fillers and to stay relevant and in touch with the market. It's hard to keep yourself tuned to the market if you don't participate in it. That participation is critical, but it also is a curse.

If you don't have time to do the research in litigation cases, then time will be your enemy. If you take too many fee/lending assignments and don't deliver those promptly, you will lose clients. Your competition will likely be concentrating on just the fee/mortgage work. Just be careful mixing the two work products.

 

[Rick Stillman]

Your competition will likely be concentrating on just the fee/mortgage work. Just be careful mixing the two work products.

Thanks for the insight hillbillyman. Congratulations on developing such a profitable business model!

Just to clarify - I don't want the lender/mortgage work. Although I do have a very few lenders that I do work with - they are the exception rather than the rule. Here are a few reasons why I won't be competing in that arena. I use the word arena because of the connotations with the rodeo world (more on that to come).

1) For private work, I am paid 50-100% more for each job - or more (as you alluded to).
2) In private work, if I do get any questions, which is rare - they are at least intelligent. I get no stupid time wasting meaningless stips from someone trying to justify their job by riding me around the rodeo a few times. I also no longer have to converse with some "order specialist" that thinks they know how to do my job because they took a two-hour course on what an appraisal is. Even when I prove something to be dead wrong - I still get the "but our reviewers said this, so it MUST be done - after all, we employ ACTUAL appraisers as our reviewers." I'm not sure that their reviewers are among the very best and brightest of all appraisers. They may be out there, but I just haven't met any yet. That's so funny, it should be on a bumper sticker!
3) When I do private work, I am paid my full fee at the time I do the inspection - not that there's anything wrong with waiting to be paid in 4-8 weeks!
4) Private work is heavily scrutinized, so it better be high-quality and it better be right. This is a high barrier to entry for this type of work. No low price skippies to compete with on price alone in this market because the ONLY thing skippies have to offer is a low low price - which matches their low low quality.
5) Being that my fees are substantially higher, my workload will be substantially lower - allowing me to concentrate on delivering quality work. The crank and churn method of valuing the largest investment of someone's life is going. right. out. the. window.
6) For private work, nobody is going to "go dark" on me - suspend and/or lie to me - lay me off - or demote me because someone is $50 lower in price than I am. I am now in charge of my destiny - not some AMC managed by someone that doesn't even understand what it is that I do - but they do have their checklist and my "report card" so they know "how" to "manage" me. It's actually funnier than it sounds here. It's hard to describe "comedy" of this level in text alone - you have to actually see it. It's like a three stooges movie in many ways. The stooges think they know so much...
7) When (not if) this grows to levels that I can't maintain by myself, I can adapt the AMC model business model by farming work out to affiliates (Thanks AMCs for the lessons in that regard).
8) In private work, there is great satisfaction from the respect I receive for delivering quality work This is completely devoid in the AMC/Lending world, where not only is there no appreciation of any kind - but there is absolutely no loyalty either. Know what Mars and AMCs have in common? There is no intelligent life in either one! (That one is free - for the good stuff, you have to catch my show in Vegas!)
9) In private work, I will get a percentage of people that will use and/or recommend me for listings (I am a broker as well).
10) In private work, I can enjoy a little thing called REFERRALS! Yeah - remember those? An AMC is NEVER going to refer you - or even HELP you in any way (unless it is only in some sort of self-serving way of benefiting them only, such as "letting" you work over the weekend so you can deliver their "rush" order [which was ordered on Friday] first thing on Monday morning).
11) I don't have to pay a portal fee, or an upload fee, or an order acceptance fee, or ANY fee for the privilege of doing MY work so someone ELSE can benefit from it. Does anyone else pay the company they work for a fee so they can accomplish their work? Real estate agents, maybe for "desk space" - but that is not a fee per se; that is sharing expenses which are necessary for the business to operate. My fees that are necessary to operate, such as MLS fees, are paid by me. That's called "the cost of doing business" or "overhead." That concept seems to have been lost along the way with AMCs. Or, they think they are clever by calling a fee something else.
12) In private work, I will never have to think about doing a "desktop" product of any sort for an insulting fee that just makes me feel "dirty/used." At the end of the day, I have to respect myself and what it is that I do. I no longer want the feeling I get from AMCs that I am just one appraiser out of dozens on their "list" and I can be replaced any time they feel like it (and yes, that has been told to me by AMCs, using those exact words).
13) I don't want to be the scapegoat for the lenders the next time we go through a recession, which will (like last time) be all my fault - but none of theirs; naturally!
14) For private work, I do not have to bare my economic soul, unlike AMCs, which want my full name, date of birth, address, social security number, personal background check - and now they want my drivers' license too? Talk about exposure to potential harm!

And I saved the most important one of all for last...

I get to say... Take me off your list. From this point forward, I will be taking over control of my business and my life. Thank you for your valued assistance. I'm sure you feel that it's been fun. But now I'll be concentrating on making it fun for me - instead of for you.

I am still open to the possibility of doing lender work - but it won't be for AMCs. When they have agreed to my fees in the past, it was because no other appraiser was able to do the unique/complex work which they had. I am not their pinch hitter sitting on the bench waiting to be called in for the emergency orders once or twice a year. My expertise is not "for rent" just to get them out of a jam when their back is against the wall. I am, however, available as a "valued partner" - but that doesn't seem to happen for some reason (we all know how that game is played).

 

[Raven59]

Thanks for the insight hillbillyman. Congratulations on developing such a profitable business model!

Just to clarify - I don't want the fee/mortgage work. Although I do have a very few lenders that I do work with - they are the exception rather than the rule. Here are a few reasons why I won't be competing in that arena. I use the word arena because of the connotations with the rodeo world (more on that to come).

1) For private work, I am paid 50-100% more for each job - or more (as you alluded to).
2) In private work, if I do get any questions, they are rare - but intelligent. I get no stupid time wasting meaningless stips from someone trying to justify their job by riding me around the rodeo a few times.
3) When I do private work, I am paid my full fee at the time I do the inspection - not that there's anything wrong with waiting to be paid for 4-8 weeks!
4) Private work is heavily scrutinized, so it better be high-quality and it better be right. This is a high barrier to entry for this type of work.
5) Being that my fees are substantially higher, my workload will be substantially lower - allowing me to concentrate on delivering quality work.
6) For private work, nobody is going to go dark on me - suspend me - lay me off - or forget about me. I am in charge of my destiny - not some AMC.
7) When (not if) this grows to levels that I can't maintain by myself, I can adapt the AMC model business model by farming work out to affiliates. (Thanks AMCs for the lessons in that regard!)
8) In private work, there is great satisfaction from the respect I receive for delivering quality work This is completely void in the AMC/Lending world, where not only is there no appreciation of any kind - but there is absolutely no loyalty either.
9) In private work, I will get a percentage of people that will use and/or recommend me for listings (I am a broker as well).
10) In private work, I will never have to think about doing a "desktop" product of any sort for an insulting fee and just feeling "dirty/used."

And I saved the most important one of all for last...

I get to say... Take me off your list. From this point forward, I will be taking over control of my business and my life. Thank you for your valued assistance. It's been fun. But now I'll be concentrating on making it fun for me - instead of for you.

I am still open to the possibility of doing lender work - but it won't be for AMCs. When they have agreed to my fees in the past, it was because no other appraiser was able to do the unique/complex work which they had. I am not their pinch hitter sitting on the bench waiting to be called in for the emergency orders once or twice a year. My expertise is not "for rent" to get them out of a jam when their back is against the wall. I am, however, available as a "valued partner" - but that doesn't seem to happen very often for some unknown reason (yeah, we all know how that game is played).

Sounds like you have a good handle on your work product and goals. I've learned through the years that consistency in work product pays off. Clients may not like the final answer, but if they trust you, they are more willing to accept the bad news if they know you were fair and professional.

Attorney's generally don't know how to find the right person. Just like the public, it's hard for attorney to qualify an appraiser by a license number. Once you get in the loop with the attorney's and do a good job, word travels quickly. The attorney's call each other for expert referrals. If you do a good job and they "trust" you, you are set. I found trust is the key. They have a lot riding on a case, and they cannot afford to have an appraiser buckle under pressure and change their opinions. I bet 15-20 attorneys have told me the same story about an appraiser changing their opinion in a deposition or on the stand.

You need to continually add education and training to your CV. Teaching a class on appraisals or USPAP to attorneys was an inexpensive method of advertising my skills to the attorneys. I've learned they don't know what we do, and you need to take the message to them. I have about 50-60 steady firms hiring my services...90% of those came from referrals from other attorneys. Get in the loop, stick with your plan described above, and they will come. You know how to find them...they don't know how to find you. Remember, it's a word of mouth niche.