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Why no national appraisal franchise

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Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
In the 1970s and into the early 80s I had extensive experience with real estate franchises. We held a master franchise in 5 states for ERA Real Estate that included 117 offices at it's peak. That was at a time when belonging to a franchise was THE thing in real estate.

Today, while an important segment of the real estate business, franchises do not dominate the business. Couple that with the fact there are several major franchises, no one franchise can say they have a dominate market share. Ironically, the larger offices are generally independent and free from franchise influence.

During the mid 80s and into the 90s I toyed with the idea of creating an appraisal franchise organization. What I found was most appraisers were amazingly independent and wanted little to do other appraisers or an appraisal franchise. It was quite difficult to get them to join a group such as the Appraisal Institute or NAR's appraisal section. What makes appraisers so different?

First I believe people get into the appraisal business to have a sense of being independent, free, and unrestrained by rules and regulations. Look how we object to USPAP, State Licensing authority, the appraisal foundation. Secondly, I think it really boils down to the fact appraisers are loners, secreted in their comfortable little offices....be it in a rented space or at home. And thirdly, I think it is a matter of economics. Most appraisers want to hang on to that last dollar.

Herding cats might be easier than organizing appraisers. If NAR with all it's influence and abundance of funds can't organize them who can? You may not like to hear this but I think if anyone could it would be Dave Biggers and Alamode. Consider this. His company provides services to more appraisers than all the other software providers combined. They have expanded their services and continue to do so into every aspect of our business. They have the network and the savvy to get it done...not to mention the best set of tools in the market for the appraiser.

The Appraisal Institute hasn't done it, no AMC has been able to do it, and not even this forum with it's wide base of appraisers has been able to effectively organize the appraiser (look at the petition and the first annual meeting).

No, my friends, I don't see a Mc Donalds Appraisal Network anytime in the future....sad though it may be. We will continue to be an imperfect market even for those with grand ambitions and boundless energy. And you know, maybe that is the way it should be.
 

Willie

Senior Member
Joined
May 30, 2002
Professional Status
Certified General Appraiser
State
Tennessee
Mike said of ALA MODE "the best set of tools in the market for the appraiser. "

I beg to differ, LOL.
 
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Mike,

You have asked an interesting question, and you have provided a reasonable answer.

I differ on one point. An appraiser, as a person, is not necessarily a loner.
But, rather, appraising, by its nature, is a lonely occupation. Many other lines of work require coordination and cooperation between individuals. Appraising does not.


In sum, I agree with your analysis.

Tom
 
B

Bemis Pownall

Guest
Ill take

5 2055's
3 FHA's
1 2-4 family
3 1004's
1 1004 over 1 mill

AND SUPER SIZE THEM ALL!

Do you take Master Card?

:icecream:
 

Alan Simmons

Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I actually think the lack of appraisal franchises is more a function of the clients’ “approved Appraiser list.” It may be that Appraisers are not so much loners as they are just forced to work that way.

I also think there is a workable franchise model that fits the current appraisal landscape. It really is simplicity in itself.
 

Randy Beigh

Senior Member
Joined
Jan 16, 2002
I guess my next question is why this is such an emotional issue? Why can't we discuss this on a professional level and keep the personal bologna out of it? The 2 previous threads got locked because of this stuff. I think the topic is important and useful, but I have no desire to rip anybody.

The purpose of my bringing up the McDonalds analogy was not to say it will happen, but that it can happen. The idea of herding appraisers is not and has not been easy, but that doesn't mean it is impossible. It only means, the correct or workable method hasn't been found, yet.

Appraisers have a tendency to think that only appraisers can run appraisal firms. I doubt that very much. I'm going to take a wild guess and say in the old days, the belief was that to run a restaurant, you had to be a restaurateur. Opp, wrong again. Ray Kroc never made hamburgers or french fries, but he did build the largest restaurant chain in the world.

Nobody, including rural appraisers should think they are immune from the changing forces out there. A few years ago, commercial appraisers thought they would be immune from AVM's. Oops, wrong again.

The whole thing comes down to one thing. For all of us, and for probably for the rest of our lives, the only thing that will remain constant is change. Everytime I hear somebody say, that won't here, I cringe.

Change is coming at us faster and faster and will keep doing so. It should be evident to one and all that it isn't going to stop. Somebody will find a different way to do appraisals than the methods we currently know and those new methods will make the current ways obsolete.

I even saw the above paragraph in action. We have good appraiser in town that never adapted to computers. His main customer went to the internet and he is now out of business. He now sells houses. His inability to change with the times cost him his profession. He is a part time appraiser, now.

Those of us that are reading this did change, since we are on the internet but this is not the end of the change. Somebody on the locked thread said something about lawyers and doctors not having national companies. His thinking was, apparently, that if it hasn't happened, it won't happen. I think that is a false premise.
 

Dale Smalley

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
What could we expect to get from a franchise. National recognition? Any advantage toward our competition? I would consider a franchise if they packaged a good marketing an promotions program that would make the phone ring with qualified leads.
 

Roger

Junior Member
Joined
Jan 24, 2002
Professional Status
Certified General Appraiser
State
Missouri
A company called Record Data out of Cleveland, OH attempted to franchise appraisal and title work about 20 years ago, and did so with some success.

It was later purchased by TRW and morphed thru First American and is now eappraiseit, I beleive.

A company as large as, and with as much management as TRW, couldn't make it work.

It does not appear to me that the potential for a reasonable return on the investment is there, considering the management expense, to franchise the appraisal function.
 

graindart

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Montana
Randy said
Somebody on the locked thread said something about lawyers and doctors not having national companies. His thinking was, apparently, that if it hasn't happened, it won't happen. I think that is a false premise.

I'm the one who wrote a message mentioning no national company that employs or franchises lawyers, doctors, along with appraisers, etc.

My point wasn't that since it hasn't happened, it won't happen. My point about a national franchise is that it has to offer something that makes your business easier or more profitable, otherwise why would someone pay a portion of income to this national company. At this time on a national level, there is no company that offers these benefits, whether for lawyers, doctors, or appraisers. Some items that a future national company might be able to bring to the table: guaranteed clients, name recognition, advertising, benefits programs, cheaper group bought software and / or hardware. Of these things, the only one that could sway me might be guaranteed clients.

The only way I can see a national appraisal company happening is if this future company concentrated on the new trainees that want to become appraisers. For most people that already have their licenses, giving a portion of your fee away to someone else in a large company just doesn't sound appealing. However with the difficulties faced by someone trying to get into this business, I think that a national company could have them sign a contract that spells everything out, with the company training them and the new appraiser owing the company a certain number of years of work at reduced rates. This would probably be appealing to a lot of newbies, where an already licensed appraiser wouldn't be interested at all.

Let me give a disclaimer so that hopefully noone gets affended by anything I wrote. This message is not directed at anyone. These paragraphs are my OPINIONS only. It was not my intent to inflict pain or discomfort on anyone. I hope noone feels belittled by anything that I've wrote. No animals were harmed in the writing of this message. :D Everyone needs to lighten up, post your opinion and don't attack someone elses business plan. I like my way of doing business and will stay with it until I see something more appealing. And the least appealing thing someone can do is to look at my choice of business models tell me that I'm wrong for doing it the way that keeps me happy. I realize that my business structure is not for everyone. Run your own business in your own way.....if you make a living, great.....if you don't, don't blame me.
 
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