State of the Economy

[Doug in NC]

I have been told in the past that the appraisal business is an indicator of where the economy is heading. Hopefully, that is not the case, at least not from my company's perspective. Although my office is slightly ahead of last year in sales volume, and last month was very good, this month is one of the worst months I have had in the past 2-3 years.

I haven't lost any clients that I am aware of. Nobody seems to be hiring yet, and I am still hearing about massive layoffs at big companies. I have many neighbors, former tech employees, still laid off after many months. The stock market is certainly not showing us any signs of an improving economy.

Other local appraisers have told me they are slow as well. A large local builder also told me his houses were moving slow, especially with the large number of homes on the market. The last consumer confidence report was also down.

I have been marketing for the past month, so I'm not real concerned yet. I think I will make up for the slow spurt, but I have to wonder if the economy is still in serious trouble. Interest rates are at very low levels, and the Fed is NOT raising rates. Local governments are talking about raising taxes to make up for shortfalls. The near future doesn't look good IMO. :roll: :?:

 

[xmrdfghap]

Doug, not everyone is experiencing a slowdown......obviously not everyone has an economy that is experiencing layoffs. But from the news these days, more and more of us are going to feel the impact of the crash of the dot com bust. Infact it is becoming more and more apparent that there was a dot con rather than a dot com economy.

I see where WorldCom/MCI is disclosing billions in losses where they reported profits, and it appears that our old friends, Arthur Anderson, was instrumental in those books as well....now that KPMG is doing their books it seems more and more irregularities are becoming public.

Exacerbating the problem is the running up of deficits by the all wise leaders in Washington (in both parties). God knows we have to have a paramilitary force manning the concourses of our airports.......so many planes have been taken over by frontal assault.......so it is worth damaging our economy to pay for it, isn't it?

But the economy is remarkably resilient, and we are doing ok....reality just has to finish catching up to un-reality. I was reading an article in Business Week the other day where venture capitalists are looking for investment vehicles......only this time they are requiring realistic business plans, forecasts based in fact, market research, and workable models. They are even requiring working prototypes of products BEFORE they invest. The VC's are saying that Silicone Valley is not in that bad of shape, and that the nerds are back in charge......so look for new and explosive technological change (it seems Intel is beta testing a 10.5 gig CPU and it seems to be working fine, so far).

But this current shake out will last another two to three years......then you will be busy again.....in the meantime, learn to speak Spanish. The guys who mow lawns, clean houses, open Tacoarias, and listen to Mariachi music are todays real innovators of new business, and they are buying homes and buildings.......

So, take some time off....be a dad, husband, partner......spend some of that money you made last year and teach a kid to fish.....you will get snowed under again soon enough.

 

[Judy Whitehead (Florida)]

I believe Greg is right (is that me talking :lol: :?: ) We were so busy I was going to hire another person - glad I didn't because it has slowed in the last few weeks. I hate to bring someone on board and then have no work for them. I am trying to leave the office before 7pm and take the whole weekend off, as well as spend more time training my son. This way I can perhaps go into more detail.

You know, I always had a problem with ordering things online that I wanted to touch, feel and try on. Perhaps since I work on a computer so much, the last thing I want to do at night is surf the web. I always wondered what the fascination was. I do use the internet to book travel plans and sometimes look something up, but I used to be a travel agent in years past and did everything by brochure and telephone and could do so now if I wanted to.

The local economy here is booming and property prices are increasing, we have new construction both commercial and residential, so our slow down will perhaps be just a typical summer doldrum.

 

[Doug in NC]

Greg,

I did enjoy a week off with the kids already this month and I am getting ready to take off a week at the beach. It is very frustrating to have so little to do workwise though (not to mention the lack of income).

I got a call from a trainee looking for work today. He stated that several other appraisers had indicated that they were very slow now as well. I am already looking forward to getting back from vacation so I can get back to marketing agressively. I am not going to sit by and wait until the market picks up again, I plan to continue working on marketing to new markets (besides the lending arena).

Doug

 

[Nancy in Friday Harbor]

Doug,

I'm currently booked until about the end of July.......with only two lenders reports on the schedule. The others are for estates and divorces. If one or two lender clients call, I might fit them in, but for the most part, I'm not accepting any more assignments until these are finished.

Do you (shudder) know any attornies? What's really nice about this kind of work is that the time pressure isn't so great, usually, and you can pick the type of report you feel is best -- do a narrative if you think that describes the property/appraisal problem best, for example. You're not stuck with some idiot LO telling you to put square corners on that round property just to make it fit onto some FNMA form.

It's surprising......little old guy died here several months ago. Who realized he had 7-8 large pieces of property. All of them need to be appraised for the estate taxes. Nice fee. Not due 'til the end of July.

Life is good.

 

[Joe Birrell (NY)]

There are most likely dozens (or hundreds for all we know) of Enrons out there. Think accountants are any different than appraisers ? I watched a cable news show the other night about how accounts routinely cook the books due to pressure from boards and CEO's - sound familiar ? It's really comforting to know that our economy is based upon such crapola.

 

[xmrdfghap]

Doug, anxiety is such a funny characteristic.......I know how you feel. Things begin to slow down, you question why you bothered to develop this business anyway.....running a restaurant would be so much more fun.....how can I develop a marketing strategy that will create the additional work that I need without costing a fortune, do I give discounts, do I require credit applications, ............

Then two weeks into a marketing strategy and you have two new clients and suddenly all the LO's that have been sleeping on the beach for the past three weeks return to their office and desparately need to close some deals so they can meet their mortgage payments and payroll. And now you have to tell either your new unknown clients or your old reliable clients that it will be two weeks before the order they just sent you can be done......even tho they plead for you to finish before the 4th.

Yep.....you need about 5 new clients before the old standbys get back from their vacations. :lol: :lol:

 

[Doug in NC]

Nancy,

I have not done a true narrative report before (I have written enough addendums on odd properties before, that I thought I might be though). Do you know where I might get a copy of a sample narrative (all client references deleted of course)?

I just would like to see what a narrative looks like, since I am trying to get some estate work myself- it might come in handy someday. One potential client asked which format I used, form or narrative.

Thanks.

Doug

 

[Nancy in Friday Harbor]

Doug,

I am sure there are forumites out there who write narrative reports exclusively and have very specific formats for them which may not agree with mine, but.......

I view a narrative report as a chance to "tell the story" of the subject property. I do a cover sheet and, depending on the size of the report, an index. Then I usually start with a sort of transmittal letter that is part of the report in which I summarize conclusions, referencing the rest of the report. Then I include a page of definitions, assuming that my local attorney or the property owner might not know the definition of extraordinary assumption or hypothetical condition. Then I do scope of work and USPAP stuff. Then describe the neighborhood, the subject and get into the cost, income and sales comparison approaches to value. Include photos and maps anywhere you think they make sense or help lead the reader through the report. And then I summarize/reconcile everything.

My goal is to have a lay person be able to read through the report, including the USPAPese we have to include, and get to the end with an understanding of what I did and why. I haven't found anything in USPAP that requires a narrative report to be self contained. So, while I include a lot of stuff if it helps to make the report more easily understood, I usually consider my narratives to be summary reports. And you just follow along the USPAP book and include all the certifications that are required, etc.

I enjoy them because you get a chance, in the sales approach, to compare those things that really are pertinent to your assignment, rather than just the stuff that Fannie thinks is important.

I think that Henry Harrison might have written a book on narrative reports....don't have it and am not certain that it was his. Or may the Institute has published a book on writing narrative reports. There are classes you can take. I was taught by my mentor/mom and and my reports keep evolving and changing depending on the assignment.

A lot of times, if you have a typical property and a typical appraisal assignment, a form report is the easiest thing for both you and your client and fits the bill quite nicely. I use the narrative for the atypical properties with an unusual assignment and when I have a whole lot of square pegs that won't fit into the forms' round holes.

The biggest challenge to writing a narrative report is getting started on the first one. But you do have to be able to write and spell and proofread.