• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Purchasing an appraisal business

Status
Not open for further replies.

C&L

Thread Starter
Sophomore Member
Joined
Sep 27, 2004
Professional Status
Certified Residential Appraiser
State
California
Whenever I mention purchasing an appraisal business, the immediate response is "why not just expand your own."
Fair enough, but some appraisers out there have some great contacts and are looking to shut things down in the coming years.
As for me, I have a wife and 2 kids under 2 at home, so I won’t be getting out of the business anytime soon. :)

When I was at an Appraisal Institute class the other day, I saw several appraisers that were 60+ years old, so I can only imagine their tolerance for this business, especially in a downturn, is waning. Speaking with some of them, they mentioned legal/attorney clients and relocation clients, which have been the type of client that has been difficult for me to secure.

What I am looking for is a formula for purchasing an appraisal business. I think a large chunk of money up front is ludicrous. (i.e. 2 times net) I've done some brainstorming and came up with the following:

A small amount of money up front, to show seriousness & buyer has something to lose.
The buyer would begin to complete orders from the "company to be purchased" and give a fee split to the seller. As time went on, the buyer would receive a higher volume of appraisal orders from the "company to be purchased" and the seller would eventually transition the entire operation over to the buyer. Lastly, the seller would still receive a fee split for a determined amount of time after the business is fully transferred, like a pension.

Any thoughts?
 

panappr

Elite Member
Joined
Dec 5, 2007
Professional Status
Certified Residential Appraiser
State
California
Do you want to by mine. :unsure:
 

Steve Metz

Member
Joined
Jun 1, 2005
Professional Status
Licensed Appraiser
State
Georgia
I worked for a company that did art exhibits in museums at one time and they bought several small companies. It was a total waste of their capitol. Had they hired one good salesman the company would have grown much faster and had capitol available for new trucks and equipment.

In this business I think the most profitable configuration is two appraisers and one office person. But this is when there is a lot of work.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
Since the bulk of mortgage appraisal work is with AMCs, if you are not on their approved appraiser list, you won't being getting those orders.

Buying clients does not seem work as a way to build your appraisal business.
 

marc paolella

Junior Member
Joined
Nov 3, 2005
Professional Status
Certified Residential Appraiser
State
New Jersey
Jason,

Forget buying an appraisal business. There's nothing to buy. Goodwill is out the window, clients come and go in an eyeblink regardless of your fee, quality, or turn time. Your best bet is to simply sell yourself to new clients and establish your own relationships. Ten times quicker and you do not have to share a nickel or a headache with anyone.

This is a business of individuals, not firms. YOU are the business. And businesses need to market. So it's really all on you.
 

C&L

Thread Starter
Sophomore Member
Joined
Sep 27, 2004
Professional Status
Certified Residential Appraiser
State
California
Let me ask...

What does an appraiser do when they retire? Simply disconnect the phone?!?
 

jnordquist

Member
Joined
Sep 10, 2007
Professional Status
Certified Residential Appraiser
State
Pennsylvania
I know a guy that bought an appraisal buisness, once the "A paper lenders" figured out the approved owner and appraiser had sold his buisness to another guy the "A paper lenders" were gone. So that left him with a client list that was not his, desks, and computers.
 

Ariba

Senior Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Colorado
What I am looking for is a formula for purchasing an appraisal business. I think a large chunk of money up front is ludicrous. (i.e. 2 times net) I've done some brainstorming and came up with the following:

A small amount of money up front, to show seriousness & buyer has something to lose.
The buyer would begin to complete orders from the "company to be purchased" and give a fee split to the seller. As time went on, the buyer would receive a higher volume of appraisal orders from the "company to be purchased" and the seller would eventually transition the entire operation over to the buyer. Lastly, the seller would still receive a fee split for a determined amount of time after the business is fully transferred, like a pension.

Any thoughts?

I like your transitional formula! Give it a try, what do you have to lose? Let us know if you have any takers!
 

marc paolella

Junior Member
Joined
Nov 3, 2005
Professional Status
Certified Residential Appraiser
State
New Jersey
Let me ask...

What does an appraiser do when they retire? Simply disconnect the phone?!?

Very few appraisers ever retire. They just get old, slow down, wind down, then stop. By the time they stop, their volume is garbage and their business has no value.

The vast majority of appraisers don't make enough money to actually retire.
 

Craig Farr

Junior Member
Joined
Sep 26, 2004
Professional Status
Certified Residential Appraiser
State
Arizona
There WILL be a day in the future when appraising will be fun. I think letting the business peter-out would be better than selling. I mean, doing two-three a week but not really needing to do them.......and not thinking a single second about telling a client to go suck a lemon! Just slowly wreck your own business and laugh while doing it!! Pardon me, but I need to go check that last mailer from Social Security which shows how much I can make if I sign-up tomorrow.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks