8 Effective habits of leading appraisal firms.
There are appraisal firms and then there are appraisal firms. You know, those firms that are consistently busy in both good times and bad. They are innovative, widely respected and frequently consulted. These firms are the true industry leaders.
The following are my thoughts--based on both observation and interviews with managers and staff at appraisal firms around the country--on what makes an appraisal firm stand out as an industry leader. How many of these eight habits does your firm practice?
1 Quality is job one is more than just an advertising slogan. Everyone touts quality but few can define it because it isn't a single tangible thing but rather a series of components working together to achieve something beyond reproach.
What exemplifies quality with regard to appraisal services? Is it compliance with customer and regulatory requirements? Absence of defects? Reliability? Credibility? All of the above? According to the late Dr. William N. Kinnard Jr., professor emeritus at the University of Connecticut and the unofficial dean of modern appraisal practice, there is no such thing as a quality appraisal report. An appraisal report is either reliable or unreliable.
So, reliability is job one. Leading appraisal firms understand this. The components of a reliable appraisal report include all the information necessary to help clients make an informed business decision.
2 Quality control is taken seriously by leading appraisal firms. The three-step process requires both time and expense, but it can pay measurable dividends through the production of consistently reliable and credible appraisal products.
First, the front line appraiser must perform the appraisal in a responsible fashion, which means having a clear understanding of the client's needs and providing information to meet those needs. Second, the appraisal firm should perform an internal appraisal review before the job is complete. This may be performed by a manager or an independent quality-control staff member. Third, the firm should provide internal appraisal oversight, which includes an independent staffer or a consultant who tests the appraisal reports to ensure the consistent use and reporting of data by staff members. This task can incorporate outside review comments that may have been received.
This management report can quickly reveal systemic deficiencies and help identify potential staff training needs. When used judiciously, the oversight process can help management refine company policies, procedures and standards.
3 Communication, both external and internal, is a critical concern for leading appraisal firms. Equally important is ensuring that communication is consistent. Some clients, for example, need to be regularly updated as an appraisal is being prepared while others do not--so firms need to be aware of client expectations. Unfortunately, the responsibility for providing this type of ongoing communication often is left to the appraiser or the manager and, due to competing responsibilities and priorities, it can be inconsistent. Some leading appraisal firms appoint a support staff member to help navigate the assignments through the process, maintain the schedule, ensure timely delivery and keep clients informed.
When communication is focused internally, leading appraisal firms meet with staff on a regular basis to discuss the state of the firm, current market conditions and trends, firm-level governance and performance expectations, among other issues. Not only is this communication important in and of itself, but when done right and done often it can enhance staff morale and team building.
4 Business development and risk management are two basics deeply ingrained in employees at every level in many leading appraisal firms.
With business development, employees can be sensitive to new opportunities--especially when incentives are involved. A note of caution: Some firms report that when they were too generous with incentives, their staff spent more time selling than appraising. If your firm is large enough to justify it, consider hiring or appointing a business development specialist.
With risk management, leading appraisal firms take the position that identifying and managing risk is everyone's business and they train their employees on how to do so.
5 Incentives, as mentioned above, are important to many leading appraisal firms; frequent staff commendation is great--but financial incentives can be even better. Some firms craft sophisticated incentive packages for management and staff and, when done properly, include equally weighted components for both appraisal production and reliability. Similarly, incentive plans must be designed so that both the individual and the firm benefit. For example, have incentives take effect once a firm reaches a predetermined and well-publicized revenue and performance goal. In other words, an individual and the firm are jointly rewarded. Similarly, an individual should not be unduly rewarded for producing a large volume of reports if the work isn't measurably reliable. The best incentive plans are weighted for production, reliability, the firm and the individual.
6 Opportunities for upward mobility can be limited at the smallest firms, but larger firms can orchestrate programs for promotion and upward mobility with commensurate financial rewards. For example, some leading firms introduced multilevel staff appraiser positions and introduced review and mentoring processes where less experienced appraisers are coached and reviewed by their more experienced colleagues. Growth opportunities can help to both retain good staff and weed out employees who aren't performing.
7 Use slow periods for research, training and marketing, which is the opposite of what many companies actually do. In reality, slow periods are the ideal times to invest in staff training and firm marketing. Instead of paying for expensive external training, consider internal events led by senior staff or "friends of the firm," such as lawyers, real estate brokers, bankers and local government officials. Some leading firms have reported that such events have led to new business development. Slower periods also are ideal for implementing low-cost marketing, such as an orchestrated program of client visits, client appreciation events, social media outreach and even cold calling.
8 Organizational culture is not something that occurs by policy or mandate, rather it develops over time as employees learn the values, beliefs and attitudes--often unspoken--that characterize their company and guide its practices. Leading appraisal firms, intentionally or unintentionally have developed their own culture and management, and staff intuitively understand how they are expected to handle issues and conduct themselves. While companies cannot change their cultures overnight, they can influence desirable habits through consistent behavior so that employees can intuit expectations over time.
William L. Pittenger, MAI, SRA, is president of the consulting firm Bill Pittenger Real Estate Economics in St. Cloud, Florida. He also is the author of four books on appraising and related issues. He can be contacted through his website at billpittenger.com.
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|Title Annotation:||TRADE secrets: Business intelligence for appraisers|
|Author:||Pittenger, William L.|
|Date:||Jun 22, 2015|
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