Adjunct CEO recently surveyed commercial real estate fee appraisers in the US. One question was, “What do you think the biggest challenge of the industry is?” As a recipient of the survey, the No. 1 response was low fees, quickly followed by No. 2 of overregulation (too many requirements). The No. 3 issue was technology, specifically “keeping up with it.” About 1/3 of the responses discouraged new entrants in the field, presumably because of answers No.1 – 3.
I see a solution for all three responses with the same answer, productivity. I’m an active commercial fee appraiser who understand the frustrations of today’s appraisers. Tight fees and turnaround times are going in only one direction. Retiring early from a career that you love would be sad (and defeatist). I guarantee you there’s a better way. The challenge involves change. Like exercise, the results will be fantastic.
Some surveyed lamented, “Declining appraisal quality due to canned software.” Software is not inherently “canned” as it really speaks to the appraiser’s productivity tools and the creativity of its implementation. Before I had report writing software, I found my appraisers got tired of typing somewhere in the Income Approach section. You could almost see where their effort died. Too tired to discuss the subject tenants and rent terms in detail. Too exhausted to adequately discuss the subject’s historical expense information. Little energy left to add market extracted capitalization rates, as examples.
Productivity (not cutting corners or quality) leads to a much improved appraisal product. It keeps your hourly wage high. It attracts young talent that expects to have lots of applications. It will, over time, bring back the joy you have for your industry. Reframing your business is very refreshing. Your optimism will rub off on your appraisers and support staff, raising the bar for all.
I prefer the old school Family Feud host, Richard Dawson. If he did a show with commercial appraisers it might be something like this:
Richard Dawson: “Name one threat to your business.”
Appraiser: “AVMs, wait, um…AMCs, scrutiny of work, scope creep, evaluations…”
Richard Dawson: “What’s your favorite part about appraising?”
Appraiser: “The analysis.”
Richard Dawson: “What’s your technology and productivity process plan?”
Appraiser: Beep Beep [no response]
I get it. It’s easy to get discouraged viewing our industry from a past lens. We no longer provide appraisals directly for developers. We no longer talk to fun loan officers. We no longer feel like a consultant. You have a choice. Trudge on the same arduous path or tweak your perception and earnestly adopt productivity.
I can almost remember to the day I went to the office and realized that productivity was the answer to all of my complaining. Start optimistically viewing your appraisals as a business product wrapped in excellent customer service supported by a technology investment. Ignore negative discussions (and people) about the appraisal industry. Survey your mind and ask yourself, “What’s the answer to address the biggest challenge for our industry?” “Survey says?”