Consulting 101: educating, positioning and marketing yourself.

What is the difference between a standard-issue appraiser and a consultant? Consider how each would approach this scenario: The owner of a downtown commercial building states that he and the owner of a property three doors away would like to purchase the two buildings in between, owned by a third party, and combine the four buildings into one.

The typical appraiser thinks: here are five possible appraisals, one for each separale building and one for the combined building. The consultant, on the other hand, thinks: This is a project I can guide and manage into completion. I not only know property values, but I know how the process works, how the project will move through the negotiations and onto the planning department. I know the lawyers, brokers, lenders and others who will get involved. I can take the entire burden of this project oIT the shoulders of the various owners, do some interesting work, and earn a nice fee.

A seenario similar to this is often posited by Craig Harrington, SRA, during the Appraisal Consulting seminar he leaches for the Appraisal Institute.

While appraisers tend to be task oriented, Harrington says, a consultant should be process-oriented, stay focused on the "big picture," and only then attempt to break the project down into tasks. Ideally, the consultant should think: "Here's the big picture. What taks needs to be done to make the big picture clearer for the client?"

The value of hiring appraisers as consultants is obvious to Alex Kolodesh, a partner in Singer Properties, a development firm in Dayton, Ohio, whose current projects include 200 luxury homes, a 700,000-square-foot retail mail and 300 residential homes.

The appraiser consultants he hires, Kolodesh says, "have the range of experience" that his company needs to make sound decisions. "We use appraisers for most of the projects we do," he says. "We use appraisers to bounce ideas oIT of." He looks for consultants who are not fixed into a rigid opinion but are fluid and flexible and who understand that a development plan "is a living, breathing thing."

The opportunities for a appraiser consultant are numerous and include: construction, development, condemnation, asset management, adaptive reuse, casements, lease negotiations, tax disputes, mergers and pension fund consulting.

But to shift from providing standard opinions of value to full-fledged consulting services takes more than simply adding the title of "consultant" to one's business card. Expanding an appraisal practice into the realm of consulting requires proper education, careful positioning and effective marketing strategies.

Education

While Harrington says his Appraisal Consulting seminar is "just an introduction to the whole field of consulting," it does cover it lot of topics, such as "Appraisal Consulting Unboxed," the consulting process, consulting standards and ethies, framework for a solutions approach, presentations and conveying solutions to clients, and marketing and managing your consulting services.

Before discussing all that, however, Harrington helps seminar attendees assess whether or not they are cut out to bc consultants. He asks a series of questions about traits consultants need that can be answered in three ways: 1) that's me most of the time; 2) it could happen; and 3) I don't think so.

With enough "I don't think so" answers, the consulting role might come hard.

"Don't torture yourself," Harrington advises seminar attendees who score low, painting out the upside: "The good news is that you still get seven hour's or credit."

Many MAIs and SRAs who want to do more consulting work also achieve the CRE designation From the Counselors of Real Estate. Indeed, attorneys, developers, lender's and others looking tar appraisal consultants may specifically seek out professionals with designations from both the Appraisal Institute and the Counselors of Real Estate.

Many books are geared to helping consultants run a profitable practice. Harrington strongly suggests Marketing Your Services: A Step-by-Step Guide for Small Businesses and Professionals, written by Anthony Putnam and published by Wiley & Sons. "We follow this book like it's the bible," Harrington says.

Courses in time management might also benefit a budding consultant. According to developer Kolodesh, prompt action is key to his business and one of the key qualities in the appraisers he uses. He wants to avoid projects being delayed For weeks or months while waiting for an appraisal consultation.

Positioning

Specializing in a particular area is necessary for most consultants. As Harrington points out, "You don't want your consulting business to be defined as the 12th edition [of The Appraisal of Real Estate.]" The vast range of choices includes churches, golf courses, anchor stores, landfills, ranches, timberland, hospitals, multi-Family and military bases, among others.

Narrowing one's practice can be compared to a medical specialist like a surgeon versus a general practitioner. According to Max Ramsland, MAI, Duluth, Minn., an internationally known specialist in anchor stores an(t retail malls, "You don't ask a G.P. to do neurosurgery."

Deciding on one or two areas of appraisal specialty might depend on past experience and past education, or perhaps on a desire to pursue the most lucrative Field, hilt Ramsland believes most satisfaction comes from choosing an area that seems more interesting than others, that "kind of lights a fire in your psyche." In Ramsland's case, the intangibles associated with anchor stores and malls combined with mathematical models are infinitely interesting, and he even reads math books for enjoyment.

As a developer who often hires appraisers for condemnation issues, Kolodesh seeks out consultants with the most experience with, in one case, condemnation cases with the Ohio Department of Transportation. "I never ask someone how much they charge," Kolodesh says. "I'm not going for the cheapest. It's more a level of competency." And, he adds, "I'd never use a generalist."

For Minneapolis attorney Paul Mooney, who hires appraiser's For trial work in valuation disputes, impeccable credentials arid specialized experience are most important. Plus, the consultant or expert witness must hold up well on the stand. As Mooney quips, "We attorneys do our best to make that an unpleasant experience." He knows which appraisers hold tip well on the stand, which ones like the limelight and which don't, which ones get flustered, and which ones do their homework.

Ultimately, Ramsland says, specializing in a certain area and building up a body of knowledge prevents potential clients from having to hear these dreaded words from an appraiser: "Well, I'll have to do a little research and get back with you in a couple of weeks!'

Marketing

Of course, specialized knowledge is of little use unless the phone rings with calls from clients willing to pay for that wisdom. In his seminars, Harrington suggests identifying who your clients are and then putting yourself in places where those clients are likely to be. In Harrington's case, he solicits work from attorneys and so he attends the continuing education classes attorneys attend. Even so, he says, the classes themselves are "not where the action is. The action is at lunch." During lunch, attorneys will eventually turn to him and ask which law firm he's with, and that's when he gives them his 90-second prepared pitch, or mission statement, on his consulting services. "Prepared" is the key word, he says "you don't wing it"

As with most other service businesses, referrals are the best source of business. When attorney Mooney wants a consultant for a specialized area such as a landfill or a hospital, he'll ask other attorneys, lenders and others in real estate which appraiser they would recommend.

Kolodesh goes through the same process, asking his attorneys or other appraisers, "Who would you use for this?" As [or going through the Yellow Pages, he says, "I'd never do that."

The Future

A brisk real estate market tends to lull appraisers into a false sense that there will always be more work than anyone can handle. In recent bountiful years, the skills it takes to build business relationships might have become soft. If one client fades away, it seems, another will appear.

But for John Sway, a San Diego-based national loan manager with Wells Fargo, who has hired thousands of appraisers over the past decade, "My decision-making process has always centered around the relationships I have with the appraiser."

However, Sway says, "It has been difficult to foster relationships with appraisers since they do not need the relationships to earn a living. Things will change rapidly when interest rates go up. The market will be saturated with appraisers and they will begin soliciting business instead of becoming order takers. This is going to be difficult for many!'

For appraisers seeking to shift into the consulting role, lax relationship-building habits will likely hamper the desired success. Harrington, who also teaches a seminar called "Relationship Marketing," is well aware of the need for superior customer service. With his small practice, he can only take a small percentage of the consulting jobs that are referred to him. But he is courteous to all callers, prompt in his response time and exerts effort to refer them onto another consultant. "I treat them well," he says, which keeps the referrals coming.

Putting what he teaches into practice, Harrington has created another problem, but one he's happy to have--the struggle to keep his practice small enough to allow him the time for teaching and other pursuits. "I have to be careful," he says, "not to become too successful."

Kathy Price-Robinson is a frequent contributor to a variety of real estate publications, including Valuation Insights & Perspectives, Better Homes and Gardens, The Journal of Light construction and the Los Angeles Times, for which she writes on remodeling projects. She can be teached at [e-mail].