Prospecting For New Commercial Clients

[Michael S]

The last six months has been much slower than normal and it feels like there’s not as much work from our (mostly) lender clients as usual. At this point I feel that lending clients are pretty well tapped out as far as additional business. I’m the junior guy in my office so my more senior colleagues are the ones who are on the lists with all of the banks in the market.

I’m looking to expand the amount of work that I generate on my own which right now amounts to just a handful of assignments each year that are from calls or referrals.

I could try to sign up with some AMCs that have commercial work but the one assignment I completed from an AMC that contacted me via email blast took weeks to setup and since then they haven’t had any other commercial work in NM. In that case the fee was ok but between the multiple emails back and forth, getting signed up on their website, etc. it was more hassle than a normal direct lending client and in the year since there hasn’t been any additional work.

I think my best bet is to try and get work from attorneys or accountants for estates and similar assignments. I know of at least one local commercial shop that does a fair amount of estate work. I’ve only been certified a few years and I’m still about six months away from getting my MAI (just signed up for the comp exam and planning to do the capstone or demo in the fall). I believe that my appraisals are above-average quality but I’m not sure exactly what these kinds of clients are looking for. Speed, quality, or price? Obviously with many lenders it comes down to speed and price with quality assumed to be sufficient.

Those who have cultivated this kind of work, what would you recommend for generating new clients? Google local attorneys that specialize in estate work and call them direct? Search court records to see which attorneys are representing clients at probate court and try to contact them? Call local accountants and see if they handle estates and are interested in my services? Obviously there are a lot more estates that involve residential real estate as opposed to commercial real estate and generally our focus is on larger properties. I doubt there are many estates involving large shopping centers or warehouses compared to those that might involve an 8-unit apartment complex or small office building.

Are there any other types of clients that other commercial appraisers out there have found besides lenders and estate or litigation type work? I've had a few assignments for private clients that simply want to know what a property is worth, usually companies using it for internal planning or accounting purposes. However, that kind of work typically seems to be one-off assignments.

 

[JTip]

Eminent domain work, on the claimant side.
Do your research as to local proposed projects (via your state DOT website) and pound the pavement.

 

[nstanbru]

I'm not sure if they exist in New Mexico, but try contacting commercial loan brokerage firms.

 

[Terrel L. Shields]

I think my best bet is to try and get work from attorneys or accountants for estates and similar assignments

advertise in the state Bar magazine and there is often a monthly or quarterly CPA magazine. And there are specialty magazines some on line...on line advertising can work well..buy a banner on this site for six months and see if it generates work. Don't be bashful about your specialty types.
http://familylawyermagazine.com/trusts-estates

http://www.nmbar.org/NewMexicoLawyer

 

[Red Flint]

1. Utility companies
2. State land agencies
3. Federal land agencies
4. Local municipalities - attorneys or managers
5. Assisted living - find owners thru state licensing paperwork, also works for group homes, etc
6. Attend CPA and estate attorney get-togethers or coned, works for assessors too
7. Reach out to commercial brokers, don't forget industrial brokers
8. Find bank personnel involved in bank-owned properties, offer to help
9. State transportation departments

Good luck. Aim for 5% success rate.

 

[Michael S]

advertise in the state Bar magazine and there is often a monthly or quarterly CPA magazine. And there are specialty magazines some on line...on line advertising can work well..buy a banner on this site for six months and see if it generates work. Don't be bashful about your specialty types.
http://familylawyermagazine.com/trusts-estates

http://www.nmbar.org/NewMexicoLawyer

I contacted the state bar magazine and they sent over advertising rates. Have you utilized this approach, if so do you think it has generated clients?

 

[nstanbru]

I haven't tried the magazine ad approach but I have an appraiser friend who did. He did generate business but you have to be prepared for just about any type of property. So, if you decide to go this route, indicate the property types you will appraise. Also, indicate if you are available as an expert witness.

 

[Gobears81]

Eminent domain has been mentioned by two, but it is a side of appraising that I think highly of and the collaborative nature of appraisers in that type of work is a breath of fresh air for those of us who do more lending work. Also, ad valorem appraising (for the assessor or the appellants) and hospitals/ health care systems are good sources of work.

I believe that my appraisals are above-average quality but I’m not sure exactly what these kinds of clients are looking for. Speed, quality, or price? Obviously with many lenders it comes down to speed and price with quality assumed to be sufficient.

I believe private individuals are, on average, more price-sensitive than any other grouping of potential customers. Usually when they call, I quote a price as soon as I feel that there is enough information to do so, such that no more of their or my time is wasted, as they typically have the lowest "acceptance rate" of my quotes. With that said, they seem to be the least particular about the report itself and for smaller properties, an appraisal fee could be 1% - 2% or more of the total value of the property, so some of the additional narrative that you might have in larger properties is not needed nor something that they are willing to pay for. Compare that to a $5,000-$6,000 fee on a $10,000,000 property, which is only 0.05% - 0.06% of the total value, and perhaps the expectation of the report quality, as well as the price sensitivity, may be somewhat different in that case.
Non-banking clients either need it fast or they don't. Some initially say that they need it yesterday, but when discussing the actual date which the report is needed, it might be a pretty suitable time frame. Others make it well known that they need it fast, and they will search for whoever can get it done by then, regardless of price. On the ad valorem side, I've found that assessors tend to order appraisals multiple months in advance, and a reasonable time frame is often given for many eminent domain projects (though some often come with several appraisals at a time).
Quality is obviously a subjective parameter to consider. If you consider a high quality report to be thick and full of analysis, that is something that would be appreciated in litigation or ad valorem. Some may not be desirous of paying the additional fee for the extra work, but I've seen court rulings that are essentially in favor of who put together the best report. Other types of work require greater attention to detail and specific wording, but not the expectation of a 150-page report.

 

[Vernon Martin]

You can develop a specialty and start a blog. About 40% of my business comes from my blog.

Also, don't forget the power of advertising on AppraiserUSA.com. I'm working on an assignment right now which came from my ad there. This is the best value I've seen in appraiser advertising.

 

[Michael P Jacobs MAI]

I contacted the state bar magazine and they sent over advertising rates. Have you utilized this approach, if so do you think it has generated clients?

Not much here, new clients are all telling me they found me through the www.