The No. 1 fear for many appraisers is making a mistake.
A reviewer catches a mistake in your report that has a substantial impact on your market value conclusion. “I can’t believe the report went out like that.”
As an appraisal manager, the lender calls very angry about the “low value” and you have to provide support documentation. “Ugh, let me stop all work and make the calls.”
No one likes to make mistakes but for many appraisers, it’s built into our DNA. We always want to do the right thing. It’s an admirable goal, but taken to the extreme, can limit professional growth. This results in a scarcity mindset, which ironically, results in money down the drain.
Sometimes the fear immobilizes our ability to make decisions that can significantly improve our productivity. This shows itself in working weekends, lack of vacations and stress.
Squeeze not worth the juice
Appraisers tend to squeeze every ounce out of a certain process or software. Being frugal and recognizing value is admirable. However, the profession is changing significantly (for those that look). Banks are being tasked with digital transformation and chronically squeezing the juice mindset is incongruent with C-Suite goals.
Fee appraisers also feel the pressure of inefficiencies through the lack of attracting younger appraisers and burnout of veteran appraisers tired of the copy paste. Unbeknownst to the firm owner, your senior appraisers might be wrapping up their career very soon.
I believe success for appraisers is a mindset change. Fee and bank appraisers alike can benefit from an abundance mindset rather than a scarcity mindset. Budgets are real but have you done the math on wasted time?
Cost of doing nothing
Let’s say you’re a fee appraiser and you manually input your Excel adjustment grids. Let’s estimate 30 minutes each to manually input an improved and rent comparable chart. Example: 3 appraisers x 3 reports/week x 52 weeks x $150/hour. This simple task alone is costing your appraisal firm $70,200 per year (EVERY year), plus potential errors in the process.
Maybe you’re an appraisal manager with one job manager and two VPs. Let’s say their three salaries are $200,000 combined. Without an appraisal and environmental ordering platform, their productive is typically 40% less efficient due to manual tasks. That’s $80,000 of salary labor wasted (EVERY year).
“You’re worth more than second thoughts and maybes.”
If you do have a platform, is it configured to work the way you do? If not, calculate the cost of awkward interface, lack of reporting for the C-Suite and limited transparency for lending. You can do the math on your service level agreements (SLAs). Work to bid, engagement letters and documents done in one click.
“Missing your SLAs costs your department competitiveness on the lending side.”
Multiply poor processes by the numerous tasks it takes to order an complete appraisal reports. It’s a huge number. The fear of purchasing the wrong software is understandable. So, get referrals from your peers, lots of them. Ask them to be frank on how it’s impacted their business outcomes. Then make a decision. Whatever solution you choose, if implemented well, becomes a game changer that you’re able to leverage as an annuity, year in year out.
Close the knowing-doing gap
Being frugal is reasonable to understand the value of money and make informed and thoughtful decisions. However, being frugal may be costing you money. Do your math. The result might surprise you.
Lean into the simple anticipation of the eventual possibility of a reward. It takes leadership, budget and follow through.
As an experienced valuation professional, your time is money.
Never forget your worth.
Act your wage.
