Shauna Hatch

Who knew that there were so many ways that you could make more money as an appraiser? In this series we’ve discussed managing time, upgrading certifications, utilizing human capital, managing business expenses, and moving.

In this penultimate article in our seven-article series, we’ll explore how to make more money by obtaining new clients.

Get Onto Approved Rosters

The majority of appraisers keep their schedules full by remaining in good standing with lenders and AMCs. As you prove your high-quality work ethic by submitting thorough, accurate, and timely reports, you’ll be more likely to stay on the lenders’ and AMCs’ go-to list. This effort alone keeps many appraisers busy and fills an appraiser’s schedule as full as he or she wishes. However, if you find that you’re not getting the load of work that you desire, or you don’t want to be dependent on lenders and AMCs, there are several other options for generating more customers that you can try.

Referrals

Gaining referrals by positive word of mouth is a cheap, easy way to grow you business, once you get the process down.

Happy customers are one of your greatest business growers. After all, 92% of consumers trust recommendations from the people they know, 50% of word of mouth recommendations are the leading factor behind a purchasing decision, 72% of people trust online reviews as much as in-person recommendations, and 84% of B2B decision makers start their process because of a referral. Happy customers tend to talk about how happy they are to their friends, family, and co-workers and it makes a difference in your business!

It will help you if remember the importance of every, and I emphasize every, touchpoint along the way. Every interaction that your customer has with you should be as positive as possible, and if it’s not, find a way to turn it into a positive experience for your customer! Keep in mind that every appraisal that you complete should be treated with the same detail and promptness that you would use if Donnie Osmond was your client!

If you end a transaction with an unhappy customer, there’s a 91% chance that they won’t do business with you again, and that one unhappy customer will typically tell 9 to 15 other people about their bad experience! Think that you can undo that negative experience? It takes roughly 40 positive customer experiences to undo the damage of one single negative review. Clearly, it’s worth every effort you can make to keep your customer happy with the hopes that they’ll come to you again and again and pass your name on to their friends, family, and co-workers, who in turn will pass your name on to their friends, family, and co-workers, and…you get where this is leading!

If you don’t want to wait for positive word of mouth only to build your business, you can always ask for referrals. This in and of itself could be an entire blog post, so I’ll keep it simple.

If you have a happy customer, hand them some business cards and ask them for referrals! Call your happy customer a day or two after you’ve finished your transaction with them and ask them for a referral or two or send them a friendly email in which you thank them for their business and ask for referrals. If you want to make it really easy, include an email template that your happy customer can fill out and send to their friends and family, filled with praises and recommendations for you!

Not so hard, right?

Networking

Everyone who has any level of success knows that networking is an integral part of that success. Knowing that we need to provide superior touchpoints for not only our customers, but for our co-workers and acquaintances as well, influences our minute-to-minute actions as we interact in-person, on the phone, and online.

Why should you put that extra effort in to network? According to Bianca Miller Cole, writing for Forbes, networking is important for several reasons:

• Makes you noticeable
• An avenue for newer opportunities
• Helps you reassess your qualification
• Improves your creative intellect
• An extra resource library
• Support from high profile individuals
• Growth in status
• Growth in self-confidence
• Develop long-lasting relationships

And let’s add: networking helps you get referrals from other professionals such as RE agents, divorce attorneys, and estate attorneys. As you scratch each others’ backs, everyone’s business will grow, including yours!

Online Marketing

Some of you may have dabbled in online advertising. This kind of advertising has two options, paid and organic (i.e., free!). This is yet another subject that is robust enough to fill another blog post, but let’s touch briefly on it.

If you’re interested in trying paid ads on any of the social medias, there are plenty of self-help articles that will help you get started. Every platform differs, so delving into the instructions for each specific platform that you want to advertise on is the way to go (I recommend starting with one platform, getting it down, then adding another).

If you’re interested in advertising for free through your social channels, here are some tips to get you started:

• Post consistently (use a social media planning calendar)
• Use a social media scheduler such as Hootsuite or Meet Edgar
• Do a quick search to see what the best times to post are (it depends on the channel)
• Start a blog and announce your posts on social media
• Promptly respond to any comments and questions
• Invite current friends and customer to like and follow your social media pages
• Track your analytics so you can improve your posts
• Share funny, interesting, and scary stories from your workday

If you’d like more details, see our blog post, “Advertise Locally for Free with Facebook,.”

By advertising on social media, you’ll gradually expand your client base. This method doesn’t have to take that much time, a few interesting posts a week might be all you need to do the trick!

Do You Ever Let Clients Go?

Wait, what? Why would anyone let clients go? Well, in rare instances, it might actually be the right thing to do.

You might remember that Rick Lifferth, founder and CEO of DataMaster, had to make a choice between raising his rates and losing customers (see our blog post, “How to Make More Money as an Appraiser: Manage Business Expenses,”). When new requirements from Fannie and Freddie increased the length of time that it took to complete appraisals, Rick had to choose “which broke [he] would rather be,” i.e. going broke from not earning enough to cover his expenses, or going broke from possibly losing customers who would be unhappy with his rate increases.

Rick raised his rates, and in the process lost some customers, but in the long run he was just fine. The risk paid off and he was able to keep his appraisal business and grow it into the company that we know today!

Other situations might necessitate your intentional firing of a customer. Yes, you read that right. That might go against everything you’ve ever been told about customer service, but please hear me out.

It really boils down to this: if a customer is repeatedly or excessively rude; doesn’t pay you; or makes unreasonable, illegal, or unfair demands, then the best thing might be to let the customer go. You do have the power to fire customers. If you want to get a little more detail and some personal experiences on this subject, check out our blog post, “Is the Customer Always Right?”

More Tips

Give these tips a try and watch your business grow! It might take some time, but your efforts will be well worth it!

Interested in more tips on how to make more money as an appraiser? We share many more tips in the other articles in this series! (Be sure to watch for the final article next week!) Here they are for easy reference:

How to Make More Money as an Appraiser: Manage Time

How to Make More Money as an Appraiser: Upgrade Certifications

How to Make More Money as an Appraiser: Human Capital

How to Make More Money as an Appraiser: Manage Business Expenses

How to Make More Money as an Appraiser: Move

Happy appraising!

Welcome to the fifth installment in our series, “How to Make More Money as an Appraiser.”

We’ve discussed managing time, upgrading your certifications, utilizing human capital properly, and managing business expenses. Let’s look at another way you might be able to earn a higher income: move to a higher-paying state.

The Rationale

This seems like a pretty drastic move (no pun intended) just to make a few more bucks. In some cases, you’re right, it is a pretty drastic move. In other cases, however, it might actually make sense!

As you know, the average income for real estate appraisers varies state by state. The U.S. Bureau of Labor Statistics lists the 2019 median pay as $57,010, or $27.41 per hour. If we compare state to state though, there’s a significant gap of $57k between the top earning state and the lowest earning state. The top earning state, District of Columbia, had an average income of $97,200 versus the lowest earning state, West Virginia, with an average of $40,360. That’s quite a difference!

Let’s look at this a bit closer by examining the top 12 states. We’ll take into account the states’ cost of living rating along with the states’ average appraiser income. The cost of living rating is indicated as higher or lower than the national average of 100%. For instance, if a state has a cost of living rating of 143, that means it’s 43% higher than the national average of 100, ouch! (Nevada and Nebraska are not included as the BLS had no income data for them.)

• District of Columbia ($97,200)/162.4
• California ($85,970)/148.53
• Alaska ($80,160)/122.88
• Washington ($79,080)/122.18
• Colorado ($77,580)/107
• New Jersey ($75,950)/124.28
• New Hampshire ($75,260)/105.25
• Ohio ($74,810)/91.56
• Connecticut ($74,340)/121.59
• Massachusetts ($73,530)/128.44
• Minnesota ($72,550)/103.56
• Iowa ($71,840)/91.12

The lowest state (West Virginia) is another $31,000 below Iowa’s average. With such a large gap between the top states and the lowest states, considering the wages in prospective states might be a good way to go for an appraiser. However, keep in mind that the higher wages are watered down by the higher costs of living. The top earning states all have above average costs of living ratings, except for Iowa (and Minnesota is pretty darn close to the average mark).

Is it Worth It?

Relocating simply for the chance to make more money is the most drastic step out of our tips for making more money as an appraiser, but if you have other reasons to relocate and your choice is between California and Oregon or New Jersey and New Hampshire, for instance, considering the income increase along with the cost of living rating might help tip the scales as to which state to move to.

Do You Want More Tips?

Interested in more tips on how to make more money as an appraiser? Here they are!

How to Make More Money as an Appraiser: Manage Time

How to Make More Money as an Appraiser: Upgrade Certifications

How to Make More Money as an Appraiser: Human Capital

How to Make More Money as an Appraiser: Manage Business Expenses

Watch for two more posts in this series: “How to Make More Money as an Appraiser: Obtaining New Clients” and “How to Make More Money as an Appraiser: Adopting New Technology” in the next two weeks!

Happy Appraising!

Welcome to the fourth installment in our series on “How to Make More Money as an Appraiser!”

Managing Expenses

Part of making more money is knowing how to manage your expenses! Managing expenses is a broad subject that is dissected in thousands of books, taught frequently in company trainings, and introduced on high school and university campuses throughout the world. Such a broad subject might mean that this post is going to be really long, but never fear! I’ve curated some of the best ideas for this short article (yes, it will be short!), and with expert input from Rick Lifferth, DataMaster’s founder, it’s all here for a quick read.

Let’s see what you can learn today to work into your money-managing processes!

Live on Less!

Rick Lifferth, DataMaster founder and CEO and appraiser for over 47 years, sat down with me and shared a couple of his most important financial lessons learned.

For the first few years of business ownership, Rick had a silent partner. He did not realize how much of an impact that partner had. This silent partner took 20-30+% of his revenue every year! When Rick hired employees, he had to pay half of their FICA taxes to this silent partner.

Every year when tax time came around, the silent partner took its enormous cut. The tax bill was always surprisingly high and usually came as a shock to Rick. When he was starting out, he had no idea just how much this silent partner was going to take from his business. As you have deduced, that silent partner was (and still is) the government.

It took a few years, but when Rick finally realized that his silent partner wasn’t ever going to quit and would always be around, taking its monstrous cut of revenue, he came to a realization. This realization was the most significant financial lesson that Rick has learned learned from his 47 years of business ownership. The realization was this: he had to learn to live on less!

Rick also realized that he had forgotten the difference between revenue and spendable income. Once he remembered that there was a difference between these two key aspects of finance, and accepted that he had to live on less, things went much better and his business grew. He also took steps to prepare for tax day by stashing the tax money into a separate account every pay period.

Rick’s lesson made a significant impact on his business. He now employs over 45 employees and his company continues to grow!

How Do You Live on Less?

You might be wondering how to live on less when it seems as if you’ve slashed every extra expense you have.

Rick observed that:

The difference between a rich person and a poor person is the ability to save on a regular basis. Obviously, there are many circumstances in life that preclude being able to save, but save when you can, even if it is only $5 per month. You will feel better about yourself and improve yourself confidence.”

Here are more helpful tips to consider:

• Drive a cheaper car and drive it longer
• Pay less for a house than the mortgage company will give you
• Track your daily spending on everything, including the little things
• Eat home-cooked meals more often
• Buy generic brands when possible
• Shop at discount clothing outlets

Living on less entails changing your entire mindset. It means developing an awareness that the little things add up and that big things don’t need to be quite so big!

Looking for more ideas for how to cut spending? Here is a fantastic article that shares 42 ways to spend less. These are doable, clever ideas that you’ll wish you’d known about sooner! Check out “How to Live on Less Money: 42 Hacks to Thrive by Veneta Lusk.

Raise Your Rates!

Rick not only shared the number one lesson he’s learned over the last 47 years, he shared the second most important lesson that he learned: occasionally raise your rates on your regular cadences !

Let me explain.

As Rick was learning how to operate his appraisal business at a profit (something all successful business owners must figure out sooner or later!) he learned how to navigate not only the ups and downs of cash flow, but also the ever increasing costs associated with owning a business.

For example, when new requirements from Fannie and Freddie increased the length of time that it took to complete the appraisals, Rick realized that he had to increase his fees or go broke by working for nothing. He had to determine “which broke [he] would rather be.” His choice was to keep his fees at the current rate and slowly go broke or raise his fees to an amount that would allow him to stay in business, which in his mind typically raised the risk of losing customers. Rick also realized that nobody would have the benefit of his knowledge and expertise if he was out of business. He needed to do what it reasonably took to stay afloat!

Early in his career, this decision was very difficult and scary. Over time, it became much easier. Increasing his fees happened about every 3 years or so, but the increases were relatively small and reasonable. While he may have lost a customer here and there, it was usually only for a short period of time. Most customers understood the need for increased fees and agreed to pay more for appraisals, especially after enjoying a 3-year period of stable appraisal fees.

Rick feels fortunate to have been able charge enough for his appraisal services to stay in business for 47 years. His impact on the appraisal business has been significant!

Automate

Let’s look at a couple more tips that will help you save money!

Any expense process that can be automated should be automated! This not only saves you time, it saves you money in the long run!

A long-time favorite of business owners is Quickbooks. PC Magazine labeled Quickbooks “Editor’s Choice” and gave the software a 4.5 out of 5 star rating. Easy to use and accompanied by good support, Quickbooks claims that they “keep everything organized in one place, so you’re tax ready all the time.” They connect your bank accounts, sort your expenditures into categories, and save you money on taxes (the company states that “QuickBooks customers find on average $3,534 in tax savings per year.”)!

If you want to look around at other financial software a bit more, here are some other good options:

• Zoho
• Kissflow
• Sage Intacct
• Xero

Harness Technology

One of our favorite sayings around here is “Give some time, so you can save some time!” It takes some time to learn how to use technology that will give you far more time then you invested in it! If you can spend an hour or two learning something then use what you learned to save you weeks of work a year, wouldn’t you do it?

Yes, I’m talking about learning how to use DataMaster! Thousands of appraisers have figured out this time-saving, money-saving tool and they use it to manage their time!

How much time does the appraisal data management software save you? Depending on your level of expertise, DataMaster saves you an hour or more on every-single-one of your appraisals! Think about the long-term implications of that number! Depending on how many appraisals you do a day, a week, a month, and a year, you could potentially save weeks of work every year! What would you do with an extra few weeks a year? More work? More vacation?

The possibilities are definitely worth finding out more! Go to datamasterusa.com or call us at 801.657.5769.

Cashing Out

Interested in more tips on how you can make more money as an appraiser?Take a look at the first three installments in this series:

• How to Make More Money as an Appraiser: Managing Time
• How to Make More Money as an Appraiser: Upgrade Certifications
• How to Make More Money as an Appraiser: Human Capital

There’s more to come! Catch a few more installments coming over the next few weeks!

If you have any insights from your own experiences, please share them in the comments! We would love to hear your tips!

Happy Appraising!

This is the third installment of the series “How to Make More Money as an Appraiser.” I’ve already addressed:

• How to Make More Money: Managing Time
• How to Make More Money: Upgrade Certifications

Browse through the first two installments and be sure to watch for the remaining articles over the next few weeks!

Human Capital

“Alone we can do so little; together we can do so much.”

Helen Keller

It might seem like the benefits of hiring some assistants are outweighed by the costs of paying the assistants wages, benefits, and taxes. In most cases, this is not true. An extra pair of hands that can complete the office work, make phone calls, and help with other errands, allows an appraiser to focus on the more lucrative part that they are trained for, appraising.

An Appraiser’s Experience

Gentry Lawson, an appraiser at Lifferth-Lawson Appraisal in Layton, Utah, filled me in on his experience with making more money by hiring office staff.

Gentry relates:

On my own I am limited to what I can accomplish during the day.  I can only complete so many appraisals before I run out of daylight (and I might add steam). It’s easy to get burned out by churning out appraisals late into the evening.

I’ve found that employees can greatly assist with capacity and workload. By leveraging a trainee and/or an office assistant, I can turn over the more mundane and time-consuming tasks so that I can focus on being an appraiser.

With the assistance of employees, I’ve found I can accommodate significantly more appraisals during a given week than I could otherwise accomplish on my own. This business model is more managerial based whereas the typical appraiser is a sole proprietor working out of his or her basement.

Gentry continues:

Moreover, I get the added benefit of knowing I’m giving back to my profession. Many appraisers have the misconception that bringing on a trainee is like training their competition. This is a misnomer that in the long run will only hurt our industry since capacity has not kept up with demand. I get great satisfaction in helping employees learn the trade and setting them up for success so they can support their families. So human capital has dividends beyond just monetary value.

Conclusion

Wondering if there are more pros and even some cons of group work? Check out this article by Indeed: What Are the Pros and Cons of Group Work? Keep in mind that the dynamics will be different depending on the various personalities in your group and your leadership skills.

Ultimately, we think that you’ll find that working with an assistant or two will benefit you and your business, not to mention that you’ll be helping someone else get into the field of real estate appraising!

Happy Appraising!