After selling software solutions to commercial real estate appraisers throughout the US, you start to see general trends. One movement I didn't see coming is the exodus of appraisers from their firms to go solo, while at the same time fostering collaboration. Many appraisers want independence while at the same time want to connect with other appraisers to share comps to increase productivity. Mobility, our cloud-based DataComp (comp management) and Edge (report writing), opens up the world of comp sharing and remote workforce lifestyle.

As an owner of an appraisal company, I initially found this trend disturbing. On the other hand, I can see it from the staff appraiser's point of view. Why would one split an appraisal fee when you can get 100% for yourself? State certification is all you need for some clients and some guts to go for it.

 

Pragmatically the appraiser that relocates from the office firm to the home office will feel the burden of business costs, investment of setup time and probably lots of personal stress...but hopefully excitement. Creating report formats, compiling general market data and populating an extensive sales comp database can be daunting.There are also monetary expenses with cloud services including Xceligent, Costar, Loopnet, Marshall and Swift, STDB, MLS, etc. More money also might need to go to PC/phone set up, desks, and health insurance, among other expenses.

 

We are getting more calls from appraisers looking to buy our software products, realizing that they really need the trifecta of appraisal workflow Manager, comp management and report writing. They use DataComp to email comps to one another to gain a competitive edge. In some instances these appraisers are directly competing with the firms they left.

 

The motivation comes from increased competition, dropping appraisal fees and quicker turnaround times. This is not true for the entire US, but depends on location. Some markets are cutthroat, while others are actually collaborative, especially in non-disclosure states or areas where data is harder to collect.

 

Some challenges for appraisers that strictly do bank work includes closed approved lists, intermittent lists (adding names only once a year or more) and a Hong Kong phone book-sized list with little real opportunity. Some feel that having a small handful of clients is better than splitting commission or in some instances sticking it out with firms as progressive as the Amish. Some leave because the firm owners have Jerry Springer-like issues.

 

Trends suggest that in some areas of the US, the percentage of 3 to 10 person appraisal offices are shrinking, likened to our middle class - resulting in a barbell shape, very small and very large firms. The large firms benefit from economies of scale, especially if they have made a strong technology investment that actually works well - critical for their synergy to be realized.

 

I suggest you reinvent your firm by investing heavily in technology and overall office efficiencies. Increased productivity is the "new normal" and it's not going away. Create an office culture that rewards talented appraisers by giving them tools to be productive, so they don't serve you with divorce papers. Just like a good marriage, having happy appraisers takes communication. You don't want to wake up Monday and have the "it's not you it's me" break-up conversation with your best appraiser(s) as they walk out the door and compete with you on Tuesday.