Commercial real estate appraisers play a part in a lot of different situations, and for a lot of different industry professionals: from brokers, to loan officers, to buyers, sellers, and so on.
And if you’re an appraiser? The work isn’t simple.
A Day in the Life
You run through the gambit of public records to collect basic property information.
You get out of the office, perform an inspection, then collect profit and loss statements, operating plans—plus anything else from the borrower that you can get your hands on.
You search for comparable properties to find assets of similar value.
And only at this point would you start to analyze and assess the actual value of the property.
To be a true appraisal machine, you have to be refined and efficient at every step.
Luckily, we have a few tricks and tips that can help.
By the end of this article, you’ll have 5 new ideas to save time, find more business and become an appraisal machine!
5 Tips for Better Appraisal Productivity
1. Create (and maintain) good lender-borrower relationships.
Just like the purchaser of an asset, it is important for you to have strong relationships with lenders.
After all, they are the ones that hire you.
So even if you’ve never worked with a lender/borrower—even if you don’t expect to ever work with a lender—it’s still important to maintain relationships with them, as it could lead to business somewhere down the line.
A good way to start or solidify relationships is to attend networking events and conferences, frequented by either or both lenders and borrowers, and make a positive in-person impression.
Here are a few organizations that run great events where you can connect with lenders:
Another way to keep yourself top of mind with lenders is to hit the phones, send mailers, and generally maintain you marketing efforts.
Aside from going direct to lenders with marketing materials, you can also build your personal brand by submitting articles to local publications, partaking in panels, or even hoisting your own blog online to share and build a social media audience.
2. Trust no one.
This is more or less a matter of working with integrity, and making sure you’re never swayed by those looking for favorable valuations.
If a seller wants an appraisal, obviously they will be looking for the best valuation—i.e. the highest dollar amount.
Some sellers might make the decision to withhold information about an asset or misrepresent and try to inflate the property’s supposed value.
Be aware of legal and ethical issues in your profession.
One example is the Uniform Standards of Professional Appraisal Practice (USPAP), based on a law passed by Congress that ensures appraisers are unbiased.
This came after years of appraiser accepting money from other parties to produce more favorable reports.
While it’s an easy thing to simply state, it’s imperative to avoid this type of work. There are many other ways to win business on a consistent basis.
3. Be very familiar with regulation and compliance.
As with many businesses, appraisal involves a lot of paperwork, and unfortunately, much of it comes from government agencies.
Not only are there several federal regulations by which to abide, every state has its own set of licensing requirements and rules.
It’s extremely important to stay up-to-date on these regulations, to assure that you’re abiding by the correct ordinances.
It’s one thing to shoo away any owners looking for a favorable valuation—it’s another to make sure you’re not doing anything illegal by standard law.
4. Understand discounted cash flow.
Discounted cash flow (DCF) is not only a great way to understand a property’s current value, but it’s also a great way to understand how an asset will perform in the future.
This involves knowing how an asset is performing financially through its rental and occupancy rates, as well as knowing when the leases of certain tenants end.
Knowing this information, amongst a few other factors, can help one understand how the asset and building could fare in the next few years.
That’s all important when deciphering the present day value of that asset—since someone may be buying or selling a property that stands to exponentially increase in value, then that should be factored into its present day value.
5. Adopt the latest data and tech tools.
There are so many productivity apps that you can use to get information and stay organized.
Reonomy, for example, gives appraisers a slew of information about an asset that allows them to easily glean accurate property valuations, and do so by backing themselves with more data than their counterparts.
There are, in fact, a bevy of commercial real estate appraisal software tools that you can turn to make sure that your property valuations, and general operations are on point.