- Joined
- Jan 15, 2002
- Professional Status
- Certified Residential Appraiser
- State
- Texas
Well guys and girls everybody is busy and we all think that we are the best business people in the world. But, I have one question. How would your business be if the interest rates went up to 9 percent tomorrow?
Yes, there would be a quick rush of people panicking to get their loans done worrying that the rates will go up even more. But, one to two months later, the refi market would be dead. How many appraisals for sales are you performing? It is good to be associated with lenders who service sales, too.
Then you would need to worry about outstanding invoices because a lot of small time mortgage companies will close shop. Does anybody remember 1993-1994? 1992 was the first big refi binge in many years. In 1993-1994 the rates jumped and business got real slow around here.
My point, many appraisers have not suffered a down turn. Many have jumped into the business in the past 5-6 years and think that this is a never ending pot of gold. I thought so, until 1993. I just about starved. Many appraisers falsely believe that it is their expert business acumen that has brought them to prosperity. It is not. It is more than any thing the market and interest rates that fuel our business. Yes, you can diversify, but who are we kidding here, we are making the bulk of our business because of the low rates. Look at how much of your business is coming from 1-2 lenders. If you should lose one, how much would it affect your income?
I am sorry for being such a gloom and doomer, but I have watched too many appraisers come and go with the changes in the market. Oh, the number hitter thrives in the slow market. Lenders need their loans to close in a slow market and the appraisers who can get the deals done will survive the slow times. The honest ones survive by being smart and recognizing all clients are valuable to some degree and furnishes service and communication with the lender that nobody else offers or recognizes.
I realize that there are many appraisers out there who don't depend on refi appraisals for business and they should be patted on the back. They have thought ahead. However, the majority of appraisers have never had to think ahead. I worry for you.
Yes, there would be a quick rush of people panicking to get their loans done worrying that the rates will go up even more. But, one to two months later, the refi market would be dead. How many appraisals for sales are you performing? It is good to be associated with lenders who service sales, too.
Then you would need to worry about outstanding invoices because a lot of small time mortgage companies will close shop. Does anybody remember 1993-1994? 1992 was the first big refi binge in many years. In 1993-1994 the rates jumped and business got real slow around here.
My point, many appraisers have not suffered a down turn. Many have jumped into the business in the past 5-6 years and think that this is a never ending pot of gold. I thought so, until 1993. I just about starved. Many appraisers falsely believe that it is their expert business acumen that has brought them to prosperity. It is not. It is more than any thing the market and interest rates that fuel our business. Yes, you can diversify, but who are we kidding here, we are making the bulk of our business because of the low rates. Look at how much of your business is coming from 1-2 lenders. If you should lose one, how much would it affect your income?
I am sorry for being such a gloom and doomer, but I have watched too many appraisers come and go with the changes in the market. Oh, the number hitter thrives in the slow market. Lenders need their loans to close in a slow market and the appraisers who can get the deals done will survive the slow times. The honest ones survive by being smart and recognizing all clients are valuable to some degree and furnishes service and communication with the lender that nobody else offers or recognizes.
I realize that there are many appraisers out there who don't depend on refi appraisals for business and they should be patted on the back. They have thought ahead. However, the majority of appraisers have never had to think ahead. I worry for you.