The work of a commercial real estate appraiser isn’t simple. You get out of the office and perform the inspection, collect profit and loss statements, operating plans, plus anything else you can get your hands on from the borrower. Run through the gambit of public record websites to collect the basics. Then, the hard work of compiling comparable data before the final step: performing the valuation and reconciling to a value… It’s a complicated and multi-step process which makes it super easy to become inefficient.
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!
Create 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 (or the borrower) hire you. If a bank or a borrower knows little about an appraiser, they are less likely to hire them. A good way to start or solidify relationships is to attend networking events and conferences, frequented by either or both, and make a positive in-person impression. Here are a few organizations that run great events: Appraisal Institute, Globe St. , Bisnow, CREFC.
Trust No One
If a seller wants an appraisal, obviously they want to get the best valuation possible. 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 after years of some outfits accepting money to write a more favorable report.
Know 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.
Understand Discounted Cash Flow
Discounted cash flow (DCF) is a great way to understand not only a property’s current value, but how it will perform in the future, as well. This involves knowing how the asset is doing financially through its rental rates, occupancy, and when the leases of certain tenants end. Knowing this data, amongst other factors, can help one understand how the building could fare in the next few years.
Use Data and Tech Tools
There are so many productivity apps that you can use to get information and stay organized. Reonomy’s platform gives appraisers a slew of information about an asset with the option to create lists and add notes to each property. Location, property type, mortgage information, zoning, ownership and a variety of other data points are right at your fingertips. We are working on a national product that will launch soon. If you want to be the first to know about the release, sign up for our national wait list today.