The Single Most Important Factor Appraisers Should Consider to Advance Their Careers

Long before I joined Summit Valuations as Chief Valuation Officer, I was a working real estate appraiser. I got my start back in 1987 and have appraised property in just about every set of market conditions you can imagine. Like most appraisers still working today, I’ve watched property values rise and fall. I have also reviewed thousands of reports as part of my forensic review work for Fannie Mae and Freddie Mac.

What I’ve learned is that a good appraiser will deliver a sound market value if given room to work, enough time to perform the required research, and with some experience in the local market. The vast majority of appraisers I’ve come across have been solid professionals, hard-working men and women just trying to earn a decent living by doing complicated work.

I would like to tell you that there was something you could do on the job that would set you apart, really make you successful. But the truth is, our work is most valuable when we’re able to cut through all the noise and just deliver a solid valuation. Nothing fancy. No frills, just good numbers that can be defended if need be.

It’s all of the stuff that’s not part of the appraisal report that really sets a good appraiser above the rest. The very best valuation professionals I have ever worked with were those that really understood the value of relationships.

The relationship to the local market

One of the first things we look at when we evaluate a new appraiser for our panel is the professional’s relationship to the local market. This is a local business and the people we’re looking for have established themselves in a given community by focusing on the long term. This almost always means long-term relationships.

When vetting an appraiser I haven’t worked with before, I like to reach out to real estate agents and especially brokers in the local market and find out who knows the person. Without good relationships with the brokers, appraisers are far less likely to do a good job of valuing real estate consistently. Good appraisers know that these sales professionals are intimately aware of the value in certain neighborhoods. They are an invaluable source of information that good appraisers tap into on a regular basis. I consider any appraiser stronger who takes the time to build out these relationships.

The relationships within the industry

Most appraisers working today have experience with appraisal management companies or other valuation providers. Whether you love them or hate them, these firms have established themselves and some good appraisers have built solid relationships with them.

Knowing who an appraiser has worked with previously will tell you a little about the quality of that professional’s work. Knowing how long they’ve worked with various companies in the industry will tell you even more.

Since 2005, I’ve been working on national valuation teams, going out into communities across the country to find the best valuation professionals. The best I’ve found take their inter-industry relationships seriously. They provide good, clear reports that are easy to defend. They provide enough information, on a regular basis, to firmly establish themselves as the consummate professional for valuation in their community.

When I think about the appraisers I’ve known who fit this description, the words that come to my mind are “always provides a quality product.” Sometimes, it can be as simple as adding a single line to his or her comments, just a bit more explanation than someone else would have provided. They connect the dots.

I know they’re not doing this to build a stronger relationship with my company and me. They’re doing it because they know what it means to deliver a quality product. But every time they do it, they strengthen that relationship.

We need the property value to satisfy our clients. We want a relationship with a consummate professional and that’s why we look to the appraisers we do.

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About Mark Melikian

Mark Melikian
Mark Melikian serves as Chief Valuation Officer at Summit Valuations where he oversees the performance and training of the Quality Assurance team, product development, and is the valuation expert representing Summit Valuations. Mr. Melikian’s focus on team building in a collaborative and positive environment and his objective and comprehensive approach to valuation analysis have proven instrumental to his success. Mr. Melikian has been appraising real estate since 1987 and has been active in nationwide valuation services since 2005. He has successfully led teams of analysts, developed valuation services to meet client needs and represented buyers and sellers in secondary market loan tie out meetings. Much of his recent experience has focused on forensic reviews of REO properties for Fannie Mae and Freddie Mac. This work has given him a unique insight to risk factors, beyond value, that impact a property’s likelihood of going into foreclosure. Mr. Melikian holds a B.S. in Business Administration from San Diego State University. About Summit Valuations Summit Valuations, LLC, Niles, Illinois, was established in 2007 as a full service valuation company offering a single source for nationwide real estate valuations, including residential and commercial BPOs, inspections and full appraisals. The founders applied over 20 years of national real estate experience to build a company that has built its reputation based on higher standards and superior results. All reports can be delivered to our customers via email or downloaded from our secure website. The company’s services are designed to offer faster turnaround times, thorough quality assurance, streamlined ordering and delivery processes, and accurate results. As one of the fastest growing property valuation companies in the country, Summit is dedicated to accuracy and unparalleled customer service.

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15 comments

  1. Avatar

    Yes Mark I agree. When an appraiser knows the local Realtors; they know the immediate market area much better due to their relationship communicating about recent transactions that are active and/or have closed. When I am completing reviews I find many appraisers are blind to interior/exterior factors in their analysis that are right in front of them; or easily attainable on the MLS or a simple phone call to the listing/selling agent. The biggest red flag is external obsolescence that is ignored. Which is easily noticed by a drive-by; which many more appraisers are NOT observing due to MLS photos are being utilized.

    • Avatar

      Physically driving by and snapping a photo of the comp used to be a much more important function before the advent of the GIS and Google Maps. I can get a better understanding of the immediate area by clicking on these maps. I rarely discover new information taking comp photos. If an appraiser has good a MLS system and local mapping taking comp photos is becoming a waste of valuable time.

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        Yeah right.

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        Even though its required to drive by the property per guidelines, I agree Billy that its most often a waste of time. How many times do I need to drive by that 30 story high rise condo and take a picture? How many times do I need to drive by that rural property and take a picture of the drive-way (house not visible)? Even in cases where I can get a good front photo of a comp, how much time do I spend explaining that the current updated property is not a reflection of its past condition (as used in the report)?

  2. Avatar

    With all due respect Sir, but Summit Valuations? As in “Peak” or “Mountain top” Valuations? I’ve only worked as a professional appraiser for 19 years, but I know well over 200 realtors and brokers on a first name basis and I can assure you that the majority of them only care if the appraiser “Hits the number”. I know this all too well as I am a also a Realtor. Appraisal Management Companies are destroying this Profession! But wait, Congress has an answer “Instead of allowing Reasonable and Customary fee’s, they will simply “Lower the standards for becoming an appraiser”. My point is very simple (Professionals RARELY build relationships with other Professionals that cause them to lose money. AKA; MOST Realtors prefer to NOT work with Appraisers that don’t consistently “Hit the number” ).

  3. Avatar
    Retired Appraiser

    How about those relationships with mortgage brokers? We flushed our relationships with over 200 mortgage brokerage clients down drain in 2009 with HVCC along with over 300 mortgage companies that we’d worked with over the previous 2 years?

    Who is to say that the “powers that be” won’t force you to cut all ties with Realtors, attorneys, CPAs, & every other professional relationship that you’ve built three months from now? It all depends on whether or not they are bored or have a wild hair sprout from their petunia.

    No sir…forget advancing your career; the smart appraiser is applying all of his spare time to finding their way out of this worthless “profession”.

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      @retired appraiser, that’s exactly what i’m doing –> forget advancing your career; the smart appraiser is applying all of his spare time to finding their way out of this worthless “profession”

  4. Avatar

    Unfortunately, the typical fees paid by AMCs today and their limited turn times do not reflect those needed by a professional valuation expert to do a credible job. Yes – contacting at least one of the agents involved in a transaction being considered to be presented as a comparable sale is absolutely necessary to do a credible job along with reading into the MLS comments, viewing all MLS photos, examining aerial photos and maps, and verifying zoning not only on the subject property but on the comparable sales as well. In almost every report that I complete, a conversation with an agent will reveal valuable information that was not evident in other data sources.

    Thoroughly vetting data and taking time to call a half dozen to a dozen agents for each and every report completed takes time along with thoroughly analyzing the gathered data. The typical AMC fees paid to appraisers today simply do not recognize the work necessary to complete an appraisal thoroughly and professionally.

    All appraisals and appraisers are treated as a commodity today and the fees offered reflect commodity prices rather than professional services. So long as the underwriter can check off the boxes in their check list to meet regulatory requirements, the appraisal report is acceptable. But the fact is that underwriters and reviewers outside of the area do not have a clue as to whether or not the final value estimate is accurate or not. The system encourages mediocrity by not seeking out the most experienced appraisers, paying for professional work, and allowing the appraiser enough time to do a credible job.

    In the end professional ethical appraisers will continue to do good work. Appraisers who are treated like commodities and paid like commodities will continue to provide commodity grade appraisal reports. The AMC model does nothing to correct this problem. In fact, it exasperates it.

    • Avatar

      Spot on comment : “Unfortunately, the typical fees paid by AMCs today and their limited turn times do not reflect those needed by a professional valuation expert to do a credible job.”

  5. Avatar
    Kathy Hubbard Bright

    Your focus in this article makes a valid point. But then, so do the comments stating most real estate agents see appraisers as a speed bump on the road to their commission check. How do you tell the difference? The good ones will reach out to the appraiser with offers of information. The great ones have a packet prepared for the appraiser at the inspection. Even though most of the information is redundant, it’s their acknowledgement of the role we play in the transaction that counts. It is good form to send that last category a thank you email. Those are the nuts and bolts of establishing good relationships. And, by the way, the part you left out.

  6. Avatar

    This author and the regulators completely miss the point when it comes to the advancement of appraisers. As a newbie with only 15 years of experience, the major draw to this industry for myself and most appraisers I know was the opportunity to start your own business. I started the company, did things the correct way and earned the respect and trust of my clients to the point where I had a team of appraises and employees that I employed. I advanced as an appraiser, a trainer, a business, and with the high risk, I succeed financially beyond my expectations. As a small appraisal business I was in essence a local AMC directing the incoming work to those appraisers that were best suited for the work. Flash forward to 2009 (HVCC) and overnight the business model collapsed due to low fees, the inability to assign via inter office transfers, etc. The collapse of the appraisal industry (reduced numbers) is in my opinion directly related to the inability to have a traditional business model and advancement via building a business.

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    The idea that this author is going to reach out to non-licensed appraisers (brokers, agents, etc.) to help determine the appraisers chance for employment, has got to be a joke. I would hope that every agent and broker in my community has my name circled to identify me as one who is not going to be influenced. I would hope they each have a personal story where I was the deal killing appraiser. I would like each of them to tell you when I corrected them on their incorrect MLS listing descriptions. I would want them to tell you when I called bull crap as they tried to claim that non-permitted room as GLA. While your at it Mark I would also like you to interview every owner where their refinance didn’t go through, but yet had rebuttals and outside desk reviews supporting my opinions. With 75,000 licensed appraisers and only half doing residential work Mark, don’t forget that during the interview process we the appraiser are deciding if we want to work with you.

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      Spot on Bill. Couldn’t agree with your comments anymore!!! To rely on non-licensed appraisers (brokers, agents, etc) who manipulate listings and outright lie about information is a joke.

  8. Avatar

    Some good points but really…. “I like to reach out to real estate agents and especially brokers in the local market and find out who knows the person”
    I’d sure love to see this self-acknowledged expert reach out in NYC, it’s not quite Niles, ILL

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