Our thoughts have been with those families impacted by Hurricane Harvey and Irma, and now Maria. The magnitude of these natural disasters are devastating for many. In the aftermath, lenders will be requiring inspections to monitor the collateral on their mortgages. The Appraisal Buzz had the opportunity to talk with Eric Gill, an appraiser based on Parrish, FL.
BUZZ: How did you fare with Hurricane Irma?
Eric: Fortunately, we turned out ok. We had some minor property damage to fences and trees, but the house had no damage and we experienced no flooding. On the night before the storm, forecasters were predicting a Category 4 storm with our home being directly in the path. Fortunately, the storm came onshore sooner than thought, had weakened, and stayed in more central parts of the state which is less populated. It could have been much, much worse.
BUZZ: Sorry to hear you and your family were in the path, but glad everyone is OK. How did the storm impact your business?
Eric: At first, clients hustled to complete deals prior to the storm and then everything just went on hold. Soon after the storm, we were dealing with issues of power and road accessibility, and just trying to make sure everyone was ok. Appraisal orders have now been trickling in but it can be tough to get scheduled with the chaos of borrowers returning to normal, ongoing repairs, power problems, etc.
We at times have to call on homeowners going through a refinance where the transaction is the last thing on their mind. They may have no power, a tree on their roof, etc. In such a case, we have to empathize and delicately ask if we should call back in a week’s time to then set the appointment which seems to be working. These can be awkward calls to make, I must admit.
BUZZ: How else has your business been impacted?
Eric: The storm has allowed us to be entrepreneurial. Immediately after the storm, there simply wasn’t volume for a short period of time. My family and assets were safe and I was ready to work, as was my staff, but the normal flow of business had ceased. A light bulb went off in my head when a client reached out for a disaster inspection report. I figured there must be a large need for these reports. With much of the area without power, including other appraisers, I developed a plan and proactively reached out to my existing client base. With a laptop, cellphone hot spot, and car chargers, we could hire drivers to ferry appraisers to impacted areas and temporarily transform our business to a mobile operation.
My customer base had expanded further when new clients had contacted us through Clearbox to get these inspections done on an expedited basis. As a result, we have been able to complete more than 20 inspection reports per day per appraiser. Our driver inputs several addresses into an online route planner to efficiently map out direct routes between properties while appraisers write reports in between. After some long days on the road, our firm did well financially making up for negative impacts on the business, our lender customers get reports back in an expedited fashion, borrowers can quickly proceed with their transactions and get back to finding their “normal”. With some simple planning and by having redundancies built into our processes, we were able to avoid potential financial disaster.
BUZZ: What else have you learned during this process?
Eric: Appraisers may not be prepared for what follows a natural disaster. Companies need to plan for contingencies and redundancies in case of disruptions to business. If you work on a PC, then get a laptop as a backup with a spare battery. Make sure your cell phone works as a WIFI hotspot in case your office internet is down. Also, make sure your clients have multiple methods of communication with you.
BUZZ: Great advice. Anything else?
Eric: Yes, lenders and AMC’s may be caught off guard as well. Inspections are needed but many lenders/AMC’s are not clear which form to use. Some request a 1004D which is not well suited for the task. Others request a CDAIR which is far superior. Some clients want interiors while others only want exterior. Often, clients really have no idea and this is an opportunity to give guidance. This is also an opportunity for AMCs could be helpful to their lender clients. AMCs, as a part of their onboarding process with lender clients, should be reviewing such procedures and coaching up their clients on what the expectations need to be.
BUZZ: Any Advice for Appraisers?
Eric: Look for areas growth. There are regions of the country where populations are exploding. Appraisers are in short supply and doing quite well. Appraising always has been, at least for me, about quality of life, so make choices with that in mind. None of us really knows what will happen to the business long term. It certainly seems as though the number of traditional appraisals may shrink in the future. On the other hand, the number of appraisers continues to decrease potentially increasing your future market share. As technology improves and efficiencies are employed, take the financial advantages you can and enjoy life more.
BUZZ: Thank you for taking the time to share with us Eric, hopefully, our readers can implement some of these practices for themselves to be ready in case of another disaster in the future.