Have you ever fired a client? It feels really good. This is a difficult concept to wrap your arms around; however when you are busy is the best time to secure new business. This is the most appropriate time to take on new clients and fire the bad ones. Think about it, when times are slow everyone is calling on clients, offering to take them to lunch and bringing in donuts. But when times are busy they can’t find an appraiser to take on any more assignments in a timely fashion.
Out with the Bad - Surely you have some clients that are slow to pay, require additional sales or want frequent addendums. How about this: Do you have any better comps? Isn’t that the most asinine question a processor or underwriter could ask? Don’t get me wrong if I am asked “Do you have any additional sales to further support your opinion?” I don’t take as much offense but when asked for better sales I want to respond “yes I do, but we hold on to those until you call and ask for them” or as George K. Cox, MAI, SRA once said “Yes I do, the houses on either side of the subject and the one directly across the street just sold but you can’t have them, I’m keeping them.” This is the time to replace bad clients with good ones.
In with the Good - One thing you can count on is change. Back in the mid 80’s the interest rates were 15%-18%. With current rates at an unbelievable low, in an effort to jump start the economy, we have entered another refinance wave and most appraisers are extremely busy again. Seek out clients that value your service and don’t treat appraisers as a commodity. There are still several good clients that want quality work and not just low fees and quick turn times.
Also consider diversifying, as this refinance wave will not last indefinitely. What type of work is interest rate safe? With more than ½ of marriages ending in the big D appraisers in this type of litigation support should remain busy. Relocation work, department of transportation, foreclosure, estates, is other areas to explore. Regardless of the interest rates people will continue to get divorced, roads will be constructed or widen, employees will be relocated, foreclosures will probably continue to soar and people will die.
Ride the refi wave and have a good one, but consider expanding your business while times are busy.
AUTHOR: Bryan S. Reynolds is a Certified General Real Property Appraiser and an AQB Certified USPAP Instructor. Mr. Reynolds serves as an adjunct faculty member of The Columbia Institute, and is an approved appraisal instructor in 30 states.
Reynolds is the owner of Reynolds Appraisal Service in Owensboro, KY, providing various residential and commercial valuation services, consulting and litigation support services throughout the area. He can be contacted at (270) 929-3088 or by email at bryan@reynoldsappraisalservice.com.
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