Retiring From Appraisal: Tail-End Coverage+

[George Hatch]

Would be nice to hear a story from an appraiser in their 70s who decides to retire that passes his 30 year long bank clients to another appraiser they know and trust.

That's a wild premise that you're using. I could refer you to to every regular client I've ever had and it wouldn't be of any benefit to you. Same going the other way; most referrals don't go anywhere at all unless what the appraiser is doing is a specialty with limited competition.

You seem to think appraisers own the assignments they perform. They don't. Those assignments don't belong to the appraisers, they belong to the clients. The clients decide who they will and won't do business with and there ain't none of us who are any more secure with our clients than our last assignment. We're always on probation. That's what it means to be self-employed - EVERYONE is your boss in that they all have their own SR1/SR2 criteria. Whether those criteria are similar to or different from the others.

 

[chad hampton]

That's a wild premise that you're using. I could refer you to to every regular client I've ever had and it wouldn't be of any benefit to you.

You seem to think appraisers own the assignments they perform. They don't. Those assignments don't belong to the appraisers, they belong to the clients. The clients decide who they will and won't do business with and there ain't none of us who are any more secure with our clients than our last assignment. We're always on probation. That's what it means to be self-employed - EVERYONE is your boss.

There are endless number of businesses who stick with client relationships after the primary point of contact retires or dies. Financial advisors, attorneys, accountants, etc., often or pass down from one family member to the next who’s entered that profession.

That’s what a professional client relationship is. I don’t know why you think that doesnt exist in this profession.

Every local bank and local broker I work for would absolutely take my recommendation on who to use Should I quit tomorrow. It’s only the large AMC’s that have monopolized their share of the work that doesn’t care about professionalism and building a true client relationship.

 

[George Hatch]

When was the last time you heard of a solo fee appraiser successfully selling their fee appraisal business interest? (by which I am not referring to one AMC being gobbled up by another AMC for purposes of expansion). Even as a solo CG, my business interest is unmarketable.

I get 100% of my business via referral - half of that from other appraisers and mostly involving assignments they don't want to perform or cannot perform. Not for money or commissions because I have never paid. But what they're referring to me is what they DON'T do; not what they normally do.

 

[DWiley]

When was the last time you heard of a solo fee appraiser successfully selling their fee appraisal business interest?

That is the issue. Many (most) appraisal companies consists of one person. If that person is gone, there is really nothing left to sell or turn over.

When I left the fee world, I wasn't 70, but I did turn the business over the the employees, and that group still runs as a business today. I could do that because we spent 15 years marketing and promoting the firm - not just me individually - and the firm was more than just an appraiser, it was a group of appraisers and support staff that worked in a structured system.

 

[CGinMN]

“Hello VP at ABC Bank, I’m calling to let you know I’m retiring at the end of this year. Let me introduce you to Phil Orders. Phil has been working with me for the past 5 years, including on assignments for your institution. Phil is incredibly knowledgeable and has the same fee structure, coverage area, and commitment to customer service that I do. In fact, he has taught me a thing or two along the way! Phil will be taking over majority ownership of the business in January, and we just want to let you know we will provide uninterrupted service during this transition. Please let us know what is needed to continue our partnership with your bank. I will be staying on in a consulting role for the next several years, should the need arise.

Thank you for them many years of business we’ve done together, and here’s to many more.”

Most lenders would say yes to this. I can think of many examples of appraisal businesses and clients that are passed down to employees, family, etc. AMCs have made it less common, since they don’t work on relationships and they will accept any warm body, but there’s still value in the above. No business relationship is ever guaranteed, however.

 

[George Hatch]

Phil has been working with me for the past 5 years, including on assignments for your institution.

Phil has been working for splits and under your supervision - even if you're not reviewing every report. AND that lender has been seeing Phil's work over time so they already know what Phil does. That combination is going to be different than you turning your business over to one of your competitors.

I worked for other people for 7 years before I went solo. Most appraisers these days won't put in that amount of time into their technical progression and reputation building.

 

[Mejappz]

“Hello VP at ABC Bank, I’m calling to let you know I’m retiring at the end of this year. Let me introduce you to Phil Orders. Phil has been working with me for the past 5 years, including on assignments for your institution. Phil is incredibly knowledgeable and has the same fee structure, coverage area, and commitment to customer service that I do. In fact, he has taught me a thing or two along the way! Phil will be taking over majority ownership of the business in January, and we just want to let you know we will provide uninterrupted service during this transition. Please let us know what is needed to continue our partnership with your bank. I will be staying on in a consulting role for the next several years, should the need arise.

Thank you for them many years of business we’ve done together, and here’s to many more.”

Most lenders would say yes to this. I can think of many examples of appraisal businesses and clients that are passed down to employees, family, etc. AMCs have made it less common, since they don’t work on relationships and they will accept any warm body, but there’s still value in the above. No business relationship is ever guaranteed, however.

There is a long-established appraisal firm currently operating in Florida. That is being sold It is even advertised in Working RE.

 

[George Hatch]

I've seen advertisements and solicitations. I've seen AMCs and regional/national firms gobble up smaller operations in order to expand. I've heard of solo operators being hired on condition of turning over their client lists. But I've never heard of a solo operator actually getting paid by an outside competitor for their business interest. Or of an outside competitor inheriting an operating business interest by some good will referral. So the answer probably isn't "never" but it also isn't "often".

 

[Digger88]

I never really understood a darn thing you talked about irt MARS or whatever it was called if you made it user friendly I'd check it out and maybe buy it if it worked like you said. Congrats on retiring I never will it's too easy here

 

[CGinMN]

But I've never heard of a solo operator actually getting paid by an outside competitor for their business interest.

I sold my solo operation to a competitor. We had no prior relationship, other than I would refer him commercial jobs. The sole asset in this case was the website, which generated a good amount of work.

If you operate a business based on reputation and you have a brand, you have created a thing of value. If you churn and burn reports for AMCs, it’s not worth anything.