Tuesday , 18 December 2018

Taking a Firm Stance

This article was first published in the Appraisal Buzz magazine. Download your version of the magazine or subscribe to get it delivered to your doorstep here!

There is a common expression that we use frequently in our company, and that is “stay in your lane”. As someone who avidly reads and obsesses about business related issues, one frequent observation is that failure can often be a result of simply not knowing what you want to be. If a company is unclear about what it wants to be, then its customers will also be uncertain.

Our company, Valucentric, has embraced the Appraisal Firm business model. That absolutely does not suggest we think other business models don’t have their own strengths; however, we did feel like it is a much-needed role in the industry and one we are passionate about filling.

We tend the view the industry as having 3 primary “flavors” of service providers. One, of course, would be Appraisal Management Companies (AMCs). Another would be a large Appraisal Firm. The third would be the sole practitioner or small company.

Prior to the dramatic expansion of the AMC model, large firms had a more prominent role in the industry. Most lenders internally managed their appraisal functions and decades ago mortgage lending was not as national in scope. Widespread securitization led to geographic mortgage expansion, which led to brokers and correspondent lenders, which led to increasing challenges with managing a large and broad panel, which led the rise of the AMC model. Once the AMC model took root, the widespread acceptance and use of the Supervisory Appraiser role was outright abolished by many clients and at a minimum severely restricted.

Clearly, some of the limitations on Supervisory Appraisers was a result of abuse. There truly were some “appraiser mills” that grew their capacity by adding people with very little meaningful training or supervision. Unfortunately, the baby got thrown out with the bath water. Instead of targeting the bad actors, an important and relevant part of our industry was crippled in the process.

In the past year, there have been concerns raised over appraiser shortages. Without an economically viable process to onboard, train, and supervise new trainee appraisers, the industry has become at risk of an aging demographic and a difficult path to groom new talent.

The other unintended consequence of AMCs and the impact on firms is the benefit of an ongoing support structure. Well beyond the trainee phase of an appraiser’s career, there are constant scenarios where having a team of colleagues can be vital to providing support, training, and counseling. While our firm embraces hiring trainees to build our staff from the ground up, we hire many experienced appraisers as well. The constant theme of those who join our firm is their desire to be a part of a team. As a solo practitioner, they are on an island. They have to wear every hat – accountant, business development, customer service, technology, etc. Among those roles, they must also be their own “chief appraiser”. Not having a constant sounding board for challenging assignments is not appealing to everyone.

It is important to recognize a way to appeal to your clients and luckily, our firm does so. It is our ability to have greater resources than one person or small shop may have. Through our own proprietary cloud-based management system called ENGAGE™, we have direct integrations with various other prominent industry portals and continue to do more. Other advanced technology like ASAP®, allows us to accommodate a scope of work ranging from desktop and no inspection, third party inspection or appraiser inspection. Our teams of appraiser analysts offer support to our Certified Appraisers and helps us to continuously grow to improve in both quality and quantity.

Not one firm or business model is perfect but picking your lane to develop the best one is key. It is our job to deliver our “flavor” of service provided to assure all needs are met.

If you would like to submit an article to the Appraisal Buzz, please contact us at comments@appraisalbuzz.com .

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About Leland Trice

Leland Trice
Lee Trice has spent his entire career in real estate valuation. He currently serves as Principal of The Trice Group and Valucentric. The Trice Group is a Regional firm in the Mid Atlantic region. Valucentric is a newly formed national valuation firm that is expanding into major markets and currently including operations in the States of CA, NV, WI, IL, IN, PA, DE, MD, DC, VA, TN, NY and FL. Lee graduated from the University of Maryland with a Degree in Economics and a concentration in Computer Science. He is a designated member of the Appraisal Institute and the Royal Institution of Chartered Surveyors.

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