How to build a appraisal company that can withstand market down turns

[CB1097]

Hello everyone,

I am a appraisal trainnee and I am trying to do some research to better help the certified appraiser I work with. I have have read and have been told that the appraisal market goes through boom/bust cycles just like the general real estate market goes through boom/bust cycles. So it seems from what I can gather that making the best relationships you can with different types of lenders is a way to keep steady business even in the bust cycle.

What are all the other avenues for appraisals other than mortgage originating ones? I know as example work can be found working with the VA or the tax department.

Thanks in advance for the advice and different perspectives.

 

[Russ Kitzberger]

If you are doing lending, it is very boom or bust and the current situation is the best it has been in lending for a decade. There will be another bust, although, many appraisers will partially or fully retire in the next downturn. Technology will replace many more assignments and add complexity to the remaining appraisal analysis.

With the changes going on across the county in zoning and land use, such as; allowing rooming houses, AirBnB short-term rentals, high-density conversions, fractional interest sales, and eliminating SFR zoning; you will need a General License to enter into the Litigation and other non-lending practice areas. A residential appraisal license won't cut it for the highest and best use analysis to be credible anymore in court. Of course, there will be low fee projects that will continue to use residential appraisers, but the well-paying work will go to the CG level appraisers.

Lenders can, and have, mandated values for residential loans utilize a subject to a single residential mortgage analysis of residential uses on their loans, so lending will be a viable solution for residential appraisers.

If you are training for CG license; there are lots of possibilities. Residential, long-term; it is solo or creating a larger firm orf appraisers or trainees and signing off on projects for lending. Good luck!

 

[Elliott]

I did a graph of 24 years of income and it typically varies by 50% from one year to the next. So plan appropriately that when the refi-sales market is hot one year, it may go down 25% or 50% the next. Arrange your plan to live lean during the lean years and be more bold during the good years (save/invest). Regardless, I always funded my retirement SEP to the maximum, which was a financial cushion if it was necessary. I use to carry an obscene amount in my checking account which also helped. Planning well is necessary in this business or you'll be working for $275.

 

[DTB]

As a trainee, learn your market as well as possible.

During upcycle, save your money.

During down cycle, buy property.

Sell during next upcycle.

 

[JTip]

Save your money, ain't that the truth DTB.

I think of the roster of appraisers in my market/MLS and everyone of them have a secondary profession, be it a broker or salesperson or providing some other real estate service.

The only appraiser I know that only does appraisals happens to be the worst appraiser in the area, boasting several state infractions and creating some interesting $250 reports.

 

[Terrel L. Shields]

Build a clientele of non-lenders focused on lawyers and CPAs who do estates. Learn narrative writing and get your CG.

 

[Fernando]

You're a smart guy. Today I was trying to get few orders from this new AMC. I didn't know at that time but innately I'm expanding my client list in preparation of lean times.

 

[Mike Kennedy]

Build a clientele of non-lenders focused on lawyers and CPAs who do estates. Learn narrative writing and get your CG.

gottta luv the tag line "If you can’t think of a word say “I forgot the English word for it.” That way people will think you’re bilingual instead of an idiot."

 

[Mike Kennedy]

RESIDENTIAL
Trusts & Estates
Asset Management
Residential Planned Improvement ( what would "my" house be worth IF I ..........added.../ renovated etc...... _____"), and
Marital Asset Dissolution (both property owner-direct and attorney clientele)
Pre-listing appraisals for owners and Realtors

 

[Carnivore]

Someone once said here, there are 700 AMC's nationwide.

Sign up with all of them and you will survive during lean times as a Res Appraiser. Don't do it now, because your email will blow up 24/7. LOL