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McDonalds Appraisal or What's the Problem?

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Randy Beigh

Senior Member
Joined
Jan 16, 2002
Nearly all businesses have undergone severe and dramatic changes in the past 20 years. I think a combination of newer ideas, technology, and a changing economic climate have all helped to bring this about. We have all come to expect the changes and don't even give much more than passing thought when some company like a K Mart or United Airlines have to change.

But, when it comes to appraisal, we tend to think that the only way to do this job is the way we have all grown up with. Why?

We have seen massive changes in nearly all other phases of real estate, why would anybody think appraising won't change? I have been hearing about the demise of appraising since 1989, but that isn't going to happen. What is going to happen is massive change that all of us had either adapt to or at the verry least, acknowledge, or it will be the end of the appraisers that can't change, in other words, their demise.

It seems there are a few companies out there(some on this forum) that may be the future of the industry and maybe not. Time will tell, but it doesn't matter, the writing is on the wall. Change or die. Even if none of the experiments currently in effect survive, somebody else will find a better way than the way we have been doing the job.

There are several national real estate companies, but no national appraisal firms, except AMC's. I think that will change and while it has been tried and failed, somebody will build on those past failures and I think that is good and positive for the profession, not the great satan that some writing into this forum think. In other words, there will be a McDonald's Appraisal operation.

So to MReilly and any other innovators, go get'em. I wish only good wishes and hope you make a fortune. You may have to drag the rest of kicking and screaming, but we will eventually be with you. :)

To anyone reading this and saying nobody can do X 1000's of appraisals in a given year, you need to read Michael Gerber's books called The E-Myth and Revisiting the E-Myth or something like that. If there is a "system" in place, it is possible. In fact, McDonalds and Walmart could not have become what they are without a system. There is an alarm company called ADP whose slogan is "the system is the solution" and so it is.
 

Michael Reilly

Junior Member
Joined
Jan 15, 2002
Randy,

I agree completely with your thoughts and thank you for your kind words.

There is an old saying "your mind is like a parachute, if it doesn't open it doesn't work"

Thank again Randy

MReilly-NY
ACE
 
K

Kevin Shannon

Guest
Randy,

Very well said and also very true.


Kevin Shannon
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
While it is true that inability to adapt will lead to extinction--your assessment of the future is only one of many possible variables. Other business models can coexist with your model and perhaps even outperform yours.

I've also listened to the nay sayers, and doomsday prophets over the years with mild amusement. Moreover, I've been chastised often by those individuals who would disagree with my methodology, yet I'm still here stronger (in a business sence) than ever. Many of those close minded individuals I used to work for & with are now ghosts of the pasts.

I've gone the other way--smaller scale & diversification. I no longer desire to work for someone else...I don't need them, and surely don't want to give away tens of thousands a year to a middleman who's understanding of the appraisal process pales in comparison to mine.

Appraiser's who don't like to market (they're numerous), appraiser's who just want to go home at the end of the night and not have to worry about business would fit nicely into your business model.

As for me...I fired my boss six years ago!

-Mike
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
The last time I checked this is still America. Everybody has a right to open a business. The truly sucessful people know how to make their business profitable and adapt to changes in their business market. Just remember, McDonald's operates in the same market as endless small "mom & pop" hamburger joints throughout the nation and they seem to co-exist. So can we. I never go to McDonalds, but somehow they have survived without me. :)
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Randy,

I don't think that anyone here would argue with you that technology can make all the difference in the world as a means for appraisers to bump up their production.

I also don't think you'll find anyone here would argue that when an appraiser's primary focus is volume and making bigger bucks, ethics nearly always fall by the wayside. This is inevitable whether we're talking about a one-man shop or a high volume mass-production company.

Bottom line is this. In the end it's not up to the appraiser, regardless of how many cool toys they have, whether or not they will survive in this business. The lender is the one who makes the final decision if the report that lands on their desk is acceptable or not. No amount of technology can be bought to teach an appraiser how to be truly excellent in their field. That takes time and experience.
 

graindart

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Montana
I hereby give warning, the following statements have not been thought out, and my opinions could change at any minute.

I dont' see a McDonald's Appraisal company anytime in the near future, just as I don't see a National Physician's R US anytime soon. Add to that no Lawyer Mart.

What the national companies tend to have in common is either a franchise system and / or a company that doesn't require licensed / professional workers. As far as appraisals go in most states, a license is required most of the time and a company can't possess a license. Joe Bob still is listed as the person completing the appraisal, not McDonald's Appraisal Co. As for a franchise system, I don't see it as being much of a benefit in this field. I owned a Domino's Pizza for a few years, as a franchisee. What Domino's provided was name recognition through decades of business, along with an easy to operate system, with ingredients etc all delivered a couple times per week. I don't see the benefit in becoming a franchisee in any new national appraisal company. What can they provide that you couldn't do on your own? Noone tell me the "system", because if I see someone doing something in a more productive way than myself, I change and adopt those ways. There is no proprietary software that I can't purchase or tools / instruments that I can't buy, that would give a franchise system an edge.

The other thing is that for most appraisers around here, they'd rather die than work for someone else. Being self employed is one of the big draws for me. I set my schedule and financially I live or die based on my own resources. I realize that there are appraisers that would rather work for someone else, but that's already available right now with all of the "mom & pop" appraisal outfits.

The only way that I could see a national company making it is if they got exclusive contracts with the national AMCs and Banking Institutions. If this were possible, the mom & pop appraiser might be forced into a franchise or employee system. However I won't be one of them. The fees are low enough right now.....if I have to pay a franchise fee or get paid a smaller portion from my employer, I'll be moving on to a new profession.
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
Been on both sides of the fence Working for yourself has it's benefits & working for someone else is also beneficial (Depending on type person U work for) Argument of self or for someone else could go on forever.There are lawyer mills most of those advertising on TV are "mills" Hell James Sokolove isn't even a lawyer. There are Appraisers that have offices in different states ETC ETC & somewhere someone slammed a guy cause he makes 300,000 before expenses a year maybe in his market after expenses that is middle class. This is the only good thing about this job U can work as HARD or EASY as U want with the liability factor & knowledge aquired through Appraising I'd think more of us would want to learn all we can as to how to work & live a simpler life style I do not work past 1PM Fridays Do not start prior to 8AM on Mondays NEVER work past 5. Don't make anywhere near 3000,000 but did that when I was young so that I wouldn't have to now. Have open Heart surgery or other serious Illness Then get back to me about WHY U want to work at lighting speed.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
I have no problem with any appraiser running their business any way they want to. Some want a big shop with lots of employees, even though in appraising, this appears to be rare - others like their 1 -3 man/woman show, which appears to be the majority.

I very simply want appraisers to do their job competently and legally. This includes whatever orders and forms are legally acceptable. I will stomp on any that I find that are incompetent or accepting what amounts to illegal orders with pre-determined values or accepting what amounts to illegal orders with conditions such as "stop and call if it's not going to make the value wanted", or completing appraisals with cherry-picked comps to make a value when newer, nearer, more similar comps do exist. I'd like to see those that make unjustifiable values, accept orders as stated above, or don't verify the information being used (called necessary due diligence) be heavily fined, lose their license and/or go to jail. Otherwise, I really coudn't care less how someone else runs their business. We all have that choice here in the USA.

Oh... I also really, really want the lenders and especially on a personal level the LOs and Realtors to be legally responsible for the pressure they put on appraisers.
 

Michael Reilly

Junior Member
Joined
Jan 15, 2002
Hey graindart,

I like your opening disclaimer, I think if more folks on this forum used it it would be a whole lot easier to swallow some of this stuff. I will say without being specific some of the things you mentioned are coming real soon.

The trains a coming down the track....

MReilly-NY
ACE
 
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