Appraisal Scoop

How Do I Sell Myself? Appraisers Want To Know

Author: Jeff Patterson, owner of Residential Appraisals - For the past 25 years, Jeff has been providing residential appraisals for most of southern and central Maine.  Jeff's clients range from private appraisals to working with brokers, banks, litigation support and expert court testimony.

In the past 25 years I have gone through numerous seminars pertaining to selling and marketing.  This does not make me an expert, but what I can say without doubt is that if you don’t ask for the business you will not get it.  With that in mind I have separated my principles of marketing in four parts . . .and will present them in this two-part series.

• Marketing 101 - It’s all about numbers
• Marketing 102 - Profit is all about effective marketing
• Marketing 103 - Recording what works and what doesn’t
• Marketing 104 - It is all about your plan

Marketing 101 - It's All About The Numbers

101 Marketing is about numbers, the more people you ask for the work, the bigger chances you have you’re going to get a yes. You have to ignore the no’s, and simply concentrate on how many “no thank you’s” you have to go through in order to get a “Yes”.  While supply and demand for your services comes into play, it comes down to the less demand the higher your numbers “no’s” you have to go through.   That is to say, in a low demand market you have to advertise your services more to get the same amount of orders you did when there is a high demand.

Let’s say you’re looking to market your services several different ways.

1. Telephone calls
2. Mailings
3. E-mails
4. Door to door solicitation

The more business you solicit the more your going to receive, and each way will have different results.  At this point and time the 80/20 rule should be acknowledged, which states that 80 percent of your business will come from 20% of your clients or marketing efforts. Meaning in your given area, 20% of marketing campaigns that will work and 80% will not.  So in order to be successful you have to get use to rejection.

Once you understand this, your effective marketing comes into play or marketing 102.  Before I digress into marketing 102, let’s acknowledge some percentages of returns from some of the campaigns.

Mass marketing is one of the cheapest methods of marketing.   However the return might be less than 02%.  That is to say, you send out 1,000 e-mails or post cards you can expect 20 inquires. . While telephone calls typically give you a 20% return so out of 100 calls you will get 10 inquire.  Door to door is hard to get a handle on, however my results have been about 25%.  Which means 40 contacts give you 10 inquires.

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Runt Rants - Energy Crisis is Similar to the Appraisal Crisis

AUTHOR: Ken Verrett is the owner of Acorn Appraisal Associates, a 22 year old firm offering a wide range of quality appraisal services to the Financial and Business Communities in the greater Houston SMSA

Watching the dramatic rise in the price of oil the last few weeks, the resulting rise in the price of gasoline at the pump, and the actions of our elected representatives and those seeking election is both entertaining and instructive.

• Entertaining to watch folks complain about the result but not identify or agree on causes. 
• Instructive because there are parallels to what the Appraisal Profession has experienced in the last few decades.

Neither the Democrats nor the Republicans have anything close to a policy to address the energy problem Both have had ample time and ample opportunities to do so. They certainly can’t agree on the causes. One side wants to increase the search for new oil reserves. The other worries about the environmental impact of that alternative and prefer to regulate increased mileage standards. Both want to find alternative fuels, alternative energy sources, but neither are willing to describe the costs to voters of taking bold action. There is even a lively debate about the amount of usable oil reserves left in Earth, and that debate centers around the term Peak Oil.

Peak Oil is not about running out of oil. It is about the crossing of demand and supply curves and what results when that happens.  It is about lead times to develop alternatives.  It is about the implications of such crossings of the curves as it relates to a critical commodity.

Energy Costs and Our Business

It’s not a just an interesting political problem.  It’s an appraisal business problem.  Today in Acorn I am dealing with the implications of $4.00 gasoline.  We give a mileage allowance.  Should the allowance be increased to compensate the staff?  Should Acorn encourage the demand curve change by granting increased mileage allowance for those with fuel efficient autos? Whence does the cash to achieve that arise? 

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Appraiser Marketing: Create A USP - Unique Selling Proposition

Why do we need a USP? - It is crucial to establish a Unique Selling Proposition (USP) or advantage that your potential client will instantly recognize. Without one you are really projecting an image that you are just like everyone else and there is no compelling reason why anyone should call YOU.

Just about every major company in the world has a Unique Selling Proposition (USP).

A few examples:

• FedEx - The World On Time.
• Nike - Just Do It.
• De Beers - A Diamond Is Forever.
• Miller Lite - Great Taste, Less Filling.
• Ford Motor Co. - Drive One.
• Steinway & Sons - The Instruments of the Immortals.
• a la mode, inc.- the leader in real estate technology.
• ACI - The Appraisers Choice.
• Software for Real Estate Professionals - the cutting edge in software technology.
• Marshall & Swift - The Building Cost People.
• Appraisal Institute - Professionals Providing Real Estate Solutions

A USP is the very core of your marketing message. The primary function of developing and using a USP is to set you apart and differentiate your practice in the eyes of your potential clients. They must see how you offer a superior solution to their problems, how and why it will be to their advantage for them to take advantage of your services.

Imagine that you are at a social gathering. Some one asks you "what you do for a living". Can you give a succinct answer in 20 seconds or less of what it is about your appraisal practice that is more advantageous for a potential client than dealing with your competitors?

Your USP when delineated should effectively answer this question. As real estate appraisers, we have a special challenge in attempting to define a unique selling proposition. If you are like me when I ran a large fee shop, most of my real competition went about their business in much the same way that I did. I had to really work very hard to develop subtle distinctions that helped to set me apart from the pack.

As a sole practitioner it is much easier since I can concentrate on my 35 + years experience as well as the notion that I employ no apprentices and can think on my feet so to speak. Even while you creatively imitate others, remember that it's also important to be different. Distinguish your business or practice from all the rest. Make your enterprise special in the eyes of your customer or client. That is a worthwhile goal I hope you will pursue.

How do you get your business differentiated? By creating a Unique Selling Proposition or USP.

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RUNT RANTS - Mr. Big and a la mode deserve applause!

AUTHOR: Ken Verrett is the owner of Acorn Appraisal Associates, a 22 year old firm offering a wide range of quality appraisal services to the Financial and Business Communities in the greater Houston SMSA

I was a little surprised and disappointed at the lack of appraiser response to the David Biggers, CEO of a la mode, announcement that a la mode intended to create an order assignment feature on their web site at a very low fee for the service.  The announcement was featured here.  A La Mode Announces new feature

Mr. Biggers announced something BIG.  Something that could save appraisers thousands of dollars a year.  Something that could change the landscape for appraiser marketing if they choose to use it. Yet there were only five comments to that announcement here on Appraisal Scoop!

Maybe appraisers didn’t take the time to read what Mr. Big announced?  Maybe appraisers didn’t think through the implications?  Maybe…they don’t care?

Let's Look At The Situation

Let me see if I can illustrate the proposal in a different way….stick with me here…I’ll be short and succinct for a change.  Consider the following three models.

• Green is what the Fee Appraiser receives from his local clients currently. 
• Yellow is what the Fee Appraiser receives from the typical AMC currently. 
• Blue is what Mr. Biggers proposes to offer as an alternative to the yellow.

What Those Three Senarios Mean

If the Cuomo Agreements were to survive as currently written (a debatable assumption, but still we should consider it as a possibility) local lenders will be forced to find an intermediary to order appraisals for their loan applications. The most likely intermediary is an AMC. That’s the business they are in…to order appraisals for lenders.

If the Cuomo Agreements survive, there will be pressure in the next few months for your local clients to begin moving business away from you directly and instead through an intermediary.  (The drop dead deadline in early fall….that’s to allow for the pipeline…it takes around sixty to ninety days to process a loan in many instances, so an application taken in October will likely go to the lender after Jan 1^st at which time an intermediary will be required.)

Business that you currently get under the green scenario will begin moving to the yellow scenario.  You will be doing the same appraisal, you will be doing your same quality control, you will be proving the same service that you do now…but your fee will be $105 less….30 percent less!

Got that?! The same service, the same quality, the same appraisal, but your fee will have dropped from $350 to $245. Multiply that by the number of local lender assignments you receive monthly.

If that calculation gets your attention, you should re-read Mr. Biggers announcement.

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Runt Rants - Making Good Business Decisions - Stupid Is As Stupid Does

AUTHOR: Ken Verrett is the owner of Acorn Appraisal Associates, a 22 year old firm offering a wide range of quality appraisal services to the Financial and Business Communities in the greater Houston SMSA

We are in the midst of another decline cycle in our economy that inevitably follows an expansion period. "Irrational Exuberance" coined by Alan Greenspan years ago is the perfect concise phrase to describe our collective state of mind during those times of expansion.

Stupid Is As Stupid Does

We see ourselves so smart, so invincible, so impervious to risk that we make what in hindsight are stupid mistakes. Of course, we are no smarter, no dumber collectively during the good times or the bad times. We are simply caught up in the moment. We experience irrational exuberance.

The trick in both expansions and contractions as a business owner is to keep your perspective, to see the big picture, and to make decisions regarding your business and your market that are the right ones, not ones based on false perceptions. It is when we make decisions based on bad data that we threaten our future.

Just How Bad Is It Today?

Currently we read that our economy is tanking, that we have several economic crises coming together.  It is certainly true that we have some challenges ahead. The sub prime crises caught many of us by surprise. The Cuomo Agreements caught many of us by surprise.   We may even be in a recession. 

Unfortunately we are also in a major campaign period where a battle for our minds and votes is taking place between opposing sides, each vying for a short term edge, willing to twist facts and level charges that they will quickly abandon later if necessary. Confusing times!

Appraisal Markets Are in Process of Change

Amidst all of this we in the appraisal profession have to deal with the declining markets in many areas of the country, the sub prime crises, and now the Cuomo Agreements. Enough to give us all collective heartburn!

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Runt Rants - How Do Appraisal Management Companies (AMC) Fit Into The Proposed Cuomo "Home Valuation Code of Conduct" Agreements?

Author: Ken Verrett is the owner of Acorn Appraisal Associates, a 22 year old firm offering a wide range of quality appraisal services to the Financial and Business Communities. [email protected]

There are plenty of articles appearing now analyzing the Cuomo Agreements and the HVCC proposal. I’m going to focus on what I believe all that could mean to our appraisal businesses.

SETTING THE STAGE: WHO DID IT?

Appraisers complained for years about value pressure and the need to be insulated from it. A major player has used its annual surveys to highlight that issue for years. It has been a major topic at appraisal forums for years.

I've also stated for years that value pressure from Appraisal Management Companies (AMC) clients is non existent in our experience. I'm an average kind of guy with an average kind of business, which does an above average amount of AMC business. I'm guessing that other businesses that serve the AMC market have had the same experience.

I'm also guessing that as Cuomo canvassed the nation for the last year talking to appraisers about where the problems were, he and his staff detected the same patterns over and over. Value pressure comes from those who have skin in the transaction closing. Mortgage brokers and local loan officers who are judged by the loans they close have skin in the transaction. Many appraisers have reported that others are unable to resist that pressure. AMCs don't have skin in the game and weren't the source of value pressure. In fact, part of the role of major AMCs is to provide quality Control (QC) and review...functions formerly done by the lender, but now farmed out to the AMC. The skin the AMCs have in the transaction are in quality and service.

Cuomo, being the astute guy he clearly is, may have concluded local lenders and mortgage brokers were providing value pressure on the appraiser; that AMCs were a functioning reality which did not provide value pressure and those AMCs could in part solve the problem.

He therefore may have crafted his solution; the Cuomo Agreements and the HVCC. Appraisers got what they asked for, and as often is the case, the solution was not exactly what they bargained for....

It wouldn’t surprise me if the AMC solution was not a primary focus of the Agreements; an unintended consequence. The Agreements would let the market solve the problem of how to create the firewall between the folks with skin in the transaction. The AMCs, having been around for years and currently the firewall of choice for the major lenders, might be the likely winner.

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25 Things You Must Do to Web 2.0 Your Company

InmanTV: Panelists share views on Internet trends

While slowing markets present a prime time to return to sales and customer service basics, today's home buyers and sellers expect a modern approach. These panelists discuss ways that traditional brokerages (and appraisers) can add interactive and engaging online techniques without sacrificing tried-and-true traditional company values.

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Free Webinars by a la mode - Marketing, Data Collection, Desktop Sketching

The market for appraisal services is down in a lot of states and many appraisers have a renewed interest in ways to improve their marketing or modify their business plans.  a la mode is aware of this and is offering three FREE webinars to help.  These three classes are free to everyone and start this week!  The following is from a la mode . . .

Desktop Sketching with DaVinci – January 16 at 10 AM (Central Time) - Did you ever wonder why your sketch couldn’t be as easy to do as the rest of your appraisal report?  At a la mode we wondered the same thing and our solution was DaVinci Desktop, our new free sketcher that’s built right into WinTOTAL.  If you’re tired of wasting time redrawing your entire sketch because of one line you had to change, retracing walls you’ve already drawn to build your second floor, or trying to figure out the exact order your sketcher wants you to draw the first floor, garage, and patio then this is the class for you.

Marketing Your Business with Appraiser XSite – January 22 at 3 PM (Central Time) - With the downturn in the market, now more than ever appraisers are feeling the need to actively market their business.  Websites have long been a favorite marketing tactic among big name businesses, but they can work just as much magic in your typical appraisal shop.  Whether you already own an Appraiser XSite, are an Elite member, or are just looking for a way to bring new business in during the downturn, we’ll show you how to make your Appraiser XSite into an effective tool to cultivate new business relationships.

Field Data Collection with DaVinci – January 24 at 3 PM (Central Time) - Whether you just received a new Tablet PC over the holidays or you’ve committed yourself to streamlining your business this year, this class is the one for you.  DaVinci Mobile Pro completely revolutionizes the way you do your field inspections.  Imagine if you could eliminate the time it takes to rekey your field notes without sacrificing the ease-of-use of your trusty pen and clipboard.  That’s exactly what DaVinci Mobile Pro is designed to do.  Come see how appraisers are saving up to 20 minutes per report using a la mode’s up-and-coming DaVinci Mobile Pro. 

 

Diversification, An Appraisers Path To Survival - Time to Put that New Years Resolution in Motion...

Are Residential Real Estate Appraisers Soon To Become An Endangered Species?

There is growing pessimism in the air, particularly concerning the future of residential real estate appraising as we have known it. The future will be bleak indeed for those who insist upon approaching the future by hoping for a return to the ways of the past. Their blinders and tunnel vision may well do them in.

There is an enormous shakeout of residential appraisers already well underway.

Sub-prime meltdown, extreme weakness in the Alt-A and Jumbo markets and rapidly bursting real estate bubble have slowed refinance activity down to a trickle of the volume experienced in the recent past. Many leading economists are saying the refinance boom of 2002 to 2006 will be the last, or anywhere near its magnitude, largely due to structural changes evolving in the way the lending business is and will be conducted.

AVM's, BPO's and other emerging forms of desktop underwriting will continue to take an ever larger market share of what once was exclusive domain of the residential appraiser. Predatory AMC's, pitting appraiser against appraiser, will continue to pick away at the net fees most appraisers will get to take home.

The consequence of all these factors has been residential appraisers leaving the industry in record numbers, with many others hanging on by a thread and/or supplementing their income with often unrelated part-time work.

The brightest hope for a residential appraiser’s future survival lies in diversification, with the non-lender arena as the primary target. I have been focusing my marketing capabilities and learning how to harvest business from these niche markets for more than 12 years. I typically have far more full fee business (on average, well over 80% was non-lender originated [new mortgage]), than I can handle. The biggest problem for most appraisers who desire to follow in my footsteps, will be that it cannot be accomplished overnight and can take years for a typical appraiser to build up a sizable non-lender client base.

My suggestion is that you begin to broaden your client base immediately. With the refinance boom over, you don't have a moment to waste. If you are waiting for high volume refinance activity to return, and don't intend to right-size, your demise is probably already written in stone, unless you have very deep pockets. You may well be a casualty if you can't change gears and right size quickly enough. A large operation can be great when there is heavy sustainable profitable volume, but when the economy tanks and lender business evaporates, the fixed overhead can be oppressive. Remember, the only meaningful statistic that underscores your economic health and viability is your bottom line...

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It's CONTAGIOUS! 10 Tips For Getting Started With VIRAL Appraiser Marketing

What's YOUR "Marketing Plan"?  If it's like most appraisers', it's "aggressively waiting by the telephone or fax machine waiting for it to ring!"   

A few months back (click here) I announced that I planned to take a look at many of the viral marketing options that appraisers have available today.   Those options range from simple eMail forums and blogging to targeted newsletters, videos, and podcasting.  Today's post is a basic list of some of the topics that I hope to discuss in more detail over the coming year.   I hope you'll follow this series and join in with YOUR "Success Stories"!

1. Offer free services and information delivered via email

Free email newsletters, market reports and notifications are a great opt-in way of staying in contact with clients and property owners.  If you're like me, you've probably set up a folder or two in Outlook just to save quality newsletters from Appraisal Today, Realty Times, and Inman News.  Do you think your clients do that too?  Sure they do!  Wouldn't it be great if they were saving, and passing on, YOUR newsletter?

2. Feature free personalized RSS subscriptions

RSS stands for Really Simple Syndication.  As you're reading blogs and surfing websites (Yahoo!® News, Inman®, The New York Times®, Appraisal Scoop) you've probably seen the orange RSS logo and wondered what the heck is that? For most of us, RSS allows us to pull their content into our website or blog. 

Have you ever considered syndicating your web site's or blog's content?  What if you could push your news stories, blog posts, podcasts, and video blogs to other appraisal, lender, and vendor websites automatically?  They'd benefit because they'd always have highly targeted, current content.  You'll win because RSS keeps your company's name in front of clients.   Click here for a How-To article on RSS 

RSS feeds will keep your visitors on your site longer, and will keep them coming back.  Plus, if you have a specialty (divorce, tax appeal, pre-listing) your RSS feed updates will remind visitors automatically that you’re the unrivaled expert in your area. 

3. Use eMail and eMail forums to spread the word

Your eMails can carry a consistent message about you and your commitment to the profession and your community.  Always, always, always sign your eMail correspondence with your contact information and Web or blog URL!

You want readers of your email to be just one-click away from being able to place and order with you.  Learn to use the hyperlink feature of Outlook so that readers can easily get follow-up information on topics they may not understand or need additional information on. 

If you have a page or document that you frequently send out, consider uploading it to the Web, rather than "attaching" it to your eMail.  They'll appreciate the ability to share that link and not having their yet another attachment filling up their hard drive.  Example: Comp Checks

4. "Lunch & Learn" Presentations

My friend and Appraisal Scoop author, Patrick Egger, is a master of the "Lunch & Learn" program for educating real estate professionals and keeping them focused on his message.  If you have a favorite topic that you're an authority on, let your clients know that you're available to speak to their group. 

Realtors in my area are a fantastic source of referrals and probably in your area too.  Contact the lead broker and offer to put on a 20-30 minute talk on "How to accurately measure a home", "How to prepare better BPO's" or "How to use the County GIS data".  You'll become an known as an expert and will likely be on their short-list when asked - "Who should I get to appraise my home?"

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