Look at the chart here, and you'll see that our recent poll showed a whopping 54% of appraisers responded that their business is down 25% or more. Another 14% also said it's down, but by less than 25%. So, a total of 68% of you have a slowdown on your hands.
It seems the dismal stats reported daily show that aspects of the real estate market at lows never seen before, but it's also true that they're also coming off of unprecedented highs. And indeed, I've watched appraisers vocally note for years that the bubble would burst at some point. It did. So why are we surprised? More importantly, what were we doing to prepare for it? (pq)
All too often, when I conduct marketing training sessions at our conventions, I find that a show of hands of those with active marketing campaigns, or even staff salespeople, results in a few lonely arms sticking up in the air. Those arms are often tanned and attached to relaxed appraisers with smiles on their faces. They might today be the 7% of appraisers reporting that business for them is up by 25% or more.
When I dig further into daily business practices, such as how appraisers handle phone calls regarding work in areas they don't service, I find another disturbing pattern. An overwhelming number of appraisers I talk to, when asked if they can do an appraisal outside of their normal area (the boundaries of which are unknown to the caller), admit that they usually say "No" and basically hang up.
Why? It's an opportunity to provide a service by finding another appraiser who can do it, and outsource it like a mini-AMC. It's also a chance to make a solid impression on someone who, you never know, could be a great client. Of course, those calls aren't coming in so often any more. If you're in that 54% with a strong slowdown, wouldn't you love a "do over" and get to take those calls again? You might handle it a little differently this time around.
But regardless of second chances, or the position we may be occupying in the real estate boom and bust cycle, I think these few examples and a myriad of others hint at a core problem. Because of the apprentice-like structure of the appraisal industry, there's a tendency to treat it as a trade, not a business. Small businesses aggressively advertise, seek marketing opportunities, nurture relationships with unknown clients, and otherwise seek to expand and grow. Trades tend to be more insular, wait for customers to show up, rely on a few core clients, and mimic what they saw their mentors do in their own practices, often a generation or more before.
Appraisers can't allow that pattern to continue. The tools and resources are right in front of you. But the mindset needs to change first. Until the industry is full of "appraisal businesses", with all that the name "business" implies, it will continue to bob up and down like a cork with the real estate boom and bust tide.