Appraiser Talkback Blog

Editor’s Note: New state and federal regulations requiring fair fees for appraisers, combined with new data detailing median appraisal fees by county for non-AMC work, may provide the tools necessary for appraisers to take back control of their fees.

HVCC: Taking Back Control of Your Fees
by David Brauner, Editor

Frustrated with low-ball Appraisal Management Company (AMC) fees, appraisers are digging in, many refusing to work for less, some calling for a national strike to prove their point - but there may be a better way, such as knowing what appraisal services are worth in your market and demanding it. New regulations requiring fair pay for appraisers coupled with verifiable data on median appraisal fees nationwide may make this dream a reality.

Knowing what is fair is more than idealism: it has a practical application given the slew of federal and state regulations requiring that fees be customary and reasonable, including new FHA guidelines and new proposed federal legislation, Financial and Mortgage Industry Reform Bill, (find the bill at WorkingRE.com, Sidebar: HR 4173). Many states also have incorporated similar language into legislation to regulate AMCs and in support of appraiser independence. So far, enforcement of “customary and reasonable” has not been clarified nor challenged but it may be soon.

To date, appraisers have had a weak hand when negotiating fees with AMCs. Indeed, with too many appraisers chasing too few orders, and with their lender/mortgage broker clients removed from the process by the Home Valuation Code of Conduct (HVCC), appraisers say that jobs flow mostly to the lowest/fastest bidder these days and at fees that are far below what was “typical” for their market less than a year ago before HVCC took effect. Now they have data to prove it.

Fees Data
According to Dave Biggers, Chairman and founder of software provider a la mode, his firm has appraisal fee data based on hundreds of thousands of independently contracted URAR assignments from all over the country. The fees are from non-AMC, URAR only, address-validated “real” reports which utilized a la mode’s Mercury Network in the prior 12 months.

Biggers says that because the reports all used the firm’s Mercury Network backbone, they know the ordering entity, the type of order (what sort of form and what sort of assignment), the fee, and the relevant information such as the address. “If we couldn’t validate the address against the Postal Service database and receive a valid geocode as well, we didn’t consider it. We also removed outliers (‘test’ orders that individuals sent to themselves for example), and any orders where the URAR wasn’t explicitly cited (no ‘other’ or ‘single family’ orders),” Biggers said. “Beyond that, we removed any orders with a variety of spurious characteristics as well. These are solid, real URAR-only orders.”

Because the data are for non-AMC ordered reports, they provide a useful benchmark for what is customary and reasonable in a market. “The only way that an AMC order could be in it would be if the AMC passed itself off as a lender, or if the appraiser indicated it was a lender,” Biggers said.

Low Bridge
According to the Working RE/OREP HVCC Talkback Survey, which now has nearly 5,000 respondents, 98 percent of appraisers say that in their experience working with AMCs, appraiser selection is based solely on obtaining the lowest fee at least some of the time (less than two percent answer that appraiser selection is “never” based solely on obtaining the lowest fee). To the question, “Are the fees offered by the AMCs you work with unrealistic given the nature and scope of the assignment?” 46.5 percent say “always,” 37 percent “often,” 14 percent “sometimes” and only 2.5 percent say that AMC fees are “never” unrealistically low given the nature and scope of the assignment.

The following comments were posted to our survey last week by a frustrated appraiser (posts are anonymous): “Parts of HVCC are important but the AMCs should not be allowed to take, in some cases, over 60 percent of my fee. I make less money now than I made 28 years ago when I started appraising residential real estate. Is that right? Why doesn’t my experience (over 10,000 residential appraisals in a single county in New Jersey) mean anything? He/she who charges the least, gets the work. I am just sick of this.”

The reasons for low fees vary, including an AMC business model in which their services are paid for from appraiser fees instead of by the lenders who elect to use their services. Whatever the reasons, the following is for anyone who still doubts the veracity of what appraisers are saying about low fees and a lack of concern for quality on the part of many AMCs. It is taken from a “requirements” section of a job posting for the position of Appraisal Coordinator at a national AMC. The job listing was found online in the public domain and has been widely circulated by outraged appraisers.

In the list of requirements:
• If an appraiser requests a higher fee or longer tat (turn around time), the PA (Processing Analyst) is expected to get a minimum of 2 other quotes (for a total of 3) in order to determine the best appraiser option for each order.
• Fees – Products have a standard flat fee regardless of what state the property is located in on all properties up to 1 million dollar or 1.5 million dollars dependent on business line. For this reason it is important for PAs to attempt to place the order to an appraiser with the lowest fee to maintain our profitability. On orders over 1 million dollars the PA is to obtain 3 fee quotes from 3 different offices before assigning the order. In situations where we must use a one time vendor or fee appraiser the PA will need to check as many options as possible to obtain the lowest fee.
• The use of fee appraisers should be limited unless determined to be the best option.

Median Fees Nationally
The report compiled by a la mode tells you, for instance, that in Muscogee County, Georgia, the median (non AMC) appraisal fee is $350. In Anchorage County, Alaska it is $550 and in Erie County, Pennsylvania $248. According to Biggers, on a macro basis, the national median fee for an independent URAR (non-AMC reports) is $350 and the average is $351. “The convergence of the two suggests a pretty reasonable distribution,” Biggers said. “The standard deviation is $91.60, so a random sample would suggest that roughly two thirds of all appraisal fees are between $259.40 and $442.60 (take the average and add or subtract one standard deviation). When you think about it, that makes sense in terms of what the market feels like across the country and with so many variances introduced by local versus urban micro markets.”

According to Biggers, the Appraisal Fee Reference™ report is a free product, part of a la mode’s Mercury “Industry Analytics” practice (see link below). “Our intent is to provide the industry- appraisers, lenders, AMCs, Realtors, and regulators- with objective data on what constitutes a ‘customary’ fee charged by local independent fee appraisers when engaged directly by lender clients across the U.S., so that marketing and management planning can be based on something other than ‘water cooler’ anecdotal discussions. For years, appraisers have been told it’s illegal to discuss fees, which isn’t the case, and so there’s been a black hole of accurate information on the subject.”

If appraisers are prohibited from discussing fees, it is not by USPAP, according to John S. Brenan, Director of Research and Technical Issues the Appraisal Foundation. According to Brenan, USPAP does not address the issue. “An appraiser’s USPAP obligations pertaining to fees are contained in the Management section of the ETHICS RULE, which is silent on this issue,” Brenan said.

The FHA could not be reached for comment by press time on how it plans to regulate its “customary and reasonable” requirement regarding appraisal fees, given this new data and the apparent disparity between what were typical fees prior to HVCC and what appraisers are being paid today by AMCs. Stay tuned.

Biggers continues, “What struck me as interesting is the Midwest and rust belt area’s fees, which are low across the board. Decades ago, due to the emergence of several AMCs centered in Pennsylvania and certain software vendors located in that general area, we heard anecdotal evidence of fees being low there but we never had a way to independently verify it. Now we do, and we see that the conventional wisdom is correct, even on non-AMC orders. Those areas have mentally accepted low fees as a fact of life it appears, whereas other areas of the country have not.”

View the completed Appraisal Fee Reference™ report at mercuryvmp.com/analytics.

Customary and Reasonable Fee Blog
If you’d like a virtual meeting hall to share information and discuss strategy with your colleagues, we have created a “Customary and Reasonable Fee” category at appraisertalkback.com, (top left, under “Categories”).

Here you can share information and discuss strategy with your colleagues regarding “Customary and Reasonable” Fees.

By Bill Cobb

With the many challenges before the residential appraiser these days, it’s important to remain on the FHA Roster- the ticket that can provide 40 to 50 percent of your income going forward. Here’s one way to help improve the quality of your FHA work.

It’s no secret that 2010 could be a very challenging year for home appraisers due to less demand for appraisal orders. However, where certain sectors are diminishing under the current mortgage market conditions, FHA and USDA Rural Development (RD) appraisal orders are booming. RD appraisal assignments require FHA standards and inclusion on the FHA Roster. FHA work is expected to remain a large portion of mortgage lending into 2010.

A Coester AppraisalNewscast in late December last year stated that as much as 60 percent of home loans made in 2009 were FHA. A recent 2010 HousingWire Update email stated that four out of 10 home loans are FHA. Whether FHA lending makes up 40 or 60 percent of mortgage lending in 2010, it seems certain that it is a necessity for appraisers to remain on the FHA Roster.

FHA Cracking Down
Why is it important to “up your game” when it comes to FHA appraisals? It was reported in 2009 that, due to FHA loans defaults, FHA reserves dwindled below one percent, causing the Wall Street Journal and others to question FHA’s survivability. It’s my understanding that FHA is increasing scrutiny of appraisals in an effort to remain solvent. Recently, Bloomberg reported that: “U.S. Subpoenas 15 FHA Lenders with High Mortgage Defaults” (January 12, 2010). And, you can bet that FHA will look at who the appraisers are that possibly helped those 15 lenders earn their high default status.

FHA Appraiser Inspection Course, Checklist and eManual!
On Real Estate Appraiser Tips (my blog filled with tips for working harder on your business, rather than in your business), we try not to get bogged down in the news of the day but offer tips and solutions to get us beyond our challenges. After reading through the FHA Inspection Course, eManual and using the Checklist in the field, I’m convinced that the use of the Checklist will certainly aid in reminding us not to forget any inspection items while onsite and consequently, remaining on the FHA roster by not committing careless errors.

For instance, one item I repeatedly forget to take note of is how far the private sewer or water well is located from the home and to properly annotate the locations of such on the sketch. The Checklist reminds me to do this. Another reminder is to include photos of the crawl space, which is something I often forget to do. With the elimination of the old “VC Sheet” in 2005, FHA inspections may not be as thorough as needed simply because of a lack of a checklist to follow during inspections. This product solves that problem for appraisers.

A helpful feature of the eManual is the real life photo examples of possible FHA deficiencies with questions and discussion as to which answers are correct and why. FHA lessened some standards in 2005 after it lost so much mortgage market share but this resource answers the extent of “current” FHA standards concisely.

“This new FHA Appraiser Inspection Course, Checklist and eManual is designed to get you up to speed on FHA appraising,” said appraiser-author Lore DeAstra. “The course explains how to complete the two-page checklist line by line. The Checklist serves as a field guide for completing your reports. The eManual saves you time and money by summarizing and organizing the material you need to know. We reviewed more than 450 pages of HUD materials and spoke with several HUD officials to compile the FHA Appraiser Inspection Form, course materials, and eManual. It will save you time and money.” (No continuing education credit is available at this time).

If you have questions for Lore DeAstra regarding FHA appraising that you would like answered, please email them to subscription@workingre.com.

Testimonials from other Users
“The eManual is written for the appraiser needing to know the latest FHA requirements. It is concise, yet contains all the newest appraisal requirements that are scattered throughout the volumes of FHA manuals, letters, etc. The included FHA Appraiser Inspection Checklist is a short two pages and still a reminder of those unusual situations not usually encountered. This will keep the appraiser from omitting required items and having to return to the subject property.” - C. Pierce. MAI, Appraiser +30 Yrs - Detroit, Michigan

“This material is for anyone learning the new FHA regulations and guidelines, even if they have been appraising for years. Utilizing the FHA Inspection Checklist and eManual are highly beneficial during the inspection and appraisal process. Very Well Done!” C. Fox, MSA, Real Estate Appraiser for +30 Years, Houston, Texas

Sidebar
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Author and appraiser Bill Cobb, a wizard at using blogging, social media and other “new stuff” to increase business, is offering to build a blog free for one lucky appraiser and provide training and tips on how to maintain it. You can view a sample of Bill’s appraisers’ blogs at Appraisersblogsample.info. (To learn more about why blogs can help you with your appraisal business, please read Using Blogs to Grow your Business.)

Everyone who purchases the FHA material reviewed by Bill above within the next two weeks will automatically be entered to win the free custom-built appraiser’s blog (regularly $150).

To Order: The price for the Inspection Course, Checklist and eManual is only $49 ($40 for OREP members). To purchase, please visit www.workingre.com/workingre/fha-course-checklist-emanual.html.

Contest Requirements
* Only individual appraisers are qualified to win. (Appraisal industry vendors and their employees are not eligible.)
* You will need to provide your own hosting and domain name.
* The deadline to purchase/enter is February 12th, 2010.

If you’ve already purchased the FHA material and would like to be entered to win, please email us at subscription@workingre.com.

by David Brauner, Editor

Given the fierce efforts to keep HVCC alive, it makes you wonder if AMC interests know something the rest of us don’t.

As federal legislation that would end the Home Valuation Code of Conduct (HVCC) moves closer to reality, appraisal management company (AMC) interests are blitzing the media with their message that overturning HVCC means a return to lender pressure/appraiser compliance and an environment that allowed the current real estate collapse.

Industry thought leaders have been saying for months that, no matter the fate of HVCC, the shotgun marriage between appraisers and AMCs is sealed: if appraisers want to do business, they will have to do business with AMCs on the terms dictated by these middle men or so goes the conventional wisdom.

Representatives from the Federal Housing Finance Agency (FHFA), Fannie Mae, Freddie Mac and others, tell appraisers that there will be no going back to business as it was prior to HVCC, no matter if the Code is allowed to sunset in November of this year or terminated before then (FHA, Fannie/Freddie Tell it Like it Is, WorkingRE.com, Current Edition). If this is the case, what is the AMC trade group TAVMA (Title/Appraisal Vendor Management Association) so worried about?

In recent weeks, TAVMA has published stories in the appraisal press and in other online real estate-related publications strongly defending HVCC’s role as a “firewall” protecting appraisal independence. TAVMA also recently published a widely circulated “AMC Standards of Good Practice in Appraisal Management,” in an apparent effort to head off the growing trend of AMC regulation by states (see WorkingRE.com, Sidebar for the AMC Standards of Good Practice in Appraisal Management). Such regulation, they argue, would create a confusing and expensive tangle of legislation that would drive smaller AMCs out of business and raise costs for consumers.

Safe Act
What may have rattled AMC cages is passage by the House late last year of the Financial and Mortgage Industry Reform Bill (find the Bill at WorkingRE.com, Sidbar: HR 4173). If signed into law, the Bill would establish a Consumer Financial Protection Agency and require lenders to compensate appraisers their full fees, rather than splitting them with management companies. There are also rules to assure appraisal independence. The bill gives the director of the new agency 60 days from the date of enactment of this legislation to establish such appraisal rules and calls for the HVCC to sunset at the time the new rules go into effect. The bill was referred to the Senate Committee on Banking, Housing and Urban Affairs earlier this week.

The bill includes the following:
(1) shall not prohibit lenders, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation from accepting any appraisal report completed by an appraiser selected, retained, or compensated in any manner by a mortgage loan originator—(A) licensed or registered in accordance with section 1501 et seq. of the SAFE Mortgage Licensing Act of 2008; and
(B) subject to State or Federal laws that make it unlawful for a mortgage loan originator to make any payment, threat, or promise, directly or indirectly, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property, except that nothing in this section shall prohibit a person with an interest in a real estate transaction from asking an appraiser to—
(i) consider additional, appropriate property information;
(ii) provide further detail, substantiation, or explanation for the appraiser’s value conclusion; or
(iii) correct errors in the appraisal report; and
(2) shall include a requirement that lenders and their agents compensate appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised.
(c) SUNSET.—Effective on the date the appraisal independence requirements are promulgated pursuant to subsection (a), the Home Valuation Code of Conduct announced by the Federal Housing Finance Agency on December 23, 2008, shall have no force or effect.

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), requires state licensing of mortgage brokers, including coursework, testing and fingerprinting.

These developments and a flurry of state laws to regulate AMCs may be what has TAVMA fighting back. Quoted in HousingWire.com, TAVMA executive director Jeff Schurman said, “Turning back-the-clock, and letting parties who are compensated based on closed deals order and interact with appraisers will inevitably lead to pressure and inflated appraisals.” (Find the story at WorkingRE.com, Sidebar: TAVMA Opposes New Consumer Protection Bill.)

Reason to Believe- Speaking Up
Some appraisers have given up believing that their autonomy as businesspeople will ever be restored, since HVCC has cut them off from their mortgage broker clients. Indeed many have called it quits in recent months reporting that they can not earn adequate fees working with AMCs or generate sufficient orders to stay in business.

Passage of this Bill may be the light at the end of the tunnel. TAVMA and others are pushing hard to see that that light is turned off and that HVCC remains in place. If you are opposed to HVCC, this may be a good time to make your voice heard with your Senators.

Pressure Tested
According to the Working RE/OREP HVCC Appraiser Talkback Survey, with over 4,500 appraisers responding as of this writing, 92 percent of appraisers are not in favor of HVCC as written and 82 percent do not consider AMCs to be a legitimate business model. Fifty-three percent (53%) report that they experience pressure for value with the AMCs they work with at least some of the time (47 percent say they “never” experience this pressure). Over 55 percent say that, with the AMCs they work with, they are asked to re-examine reports with the intention of trying to “make the deal work” at least some of the time (44 percent say they are “never” asked). So despite TAVMA’s PR to the contrary, appraisers say pressure still exists.

Quality Not Job One
Survey and Blog results also support anecdotal evidence from appraisers that appraisal quality has diminished since HVCC, not improved. The reason, they say, is that many AMCs look primarily for the lowest bidder when selecting appraisers, not the most qualified professional. According to the survey, 98 percent say that, in their experience working with AMCs, appraiser selection is based solely on obtaining the lowest fee at least some of the time (less than two percent answer that appraiser selection is “never” based solely on obtaining the lowest fee).

Survey results clearly indicate that pressure for low fees and quick turn around also is hurting quality. To the question: “Do ‘low fee’ appraisals result in a product that is less reliable for the end user compared to a report where adequate fees have been paid, 45 percent answer that this is “never” the case (55 percent say it happens at least some of the time). To the question: “Does the time pressure (from AMCs) result in a product that is less reliable for the end user, compared to a report where adequate time has been allowed, 31 percent say this never happens (69 percent say it happens at least some of the time).

Freddie Mac, on the other hand, reports that an internal review indicates that appraisal quality has improved since HVCC and that complaints are down. (See FHA, Fannie/Freddie Tell it Like it Is, WorkingRE.com, Current Edition.)

FHA Fees- Customary and Reasonable?
An appraiser poll hosted by AppraiserSupport.com finds that today the majority of fees for FHA appraisals are under $250 nationwide. At issue is FHA’s new policy, which takes effect this week and mandates that appraiser fees be customary and reasonable. According to AppraiserSupport.com, “In 1986, FHA mandated the appraisal fee of $225 be paid to all FHA appraisers. FHA realized that a fair wage was required to produce quality appraisal reports. If you adjust the 1986 mandatory appraisal fee for inflation, a current appraisal fee would be $436, which was approximately the amount appraisers were charging prior to the HVCC. HUD has addressed the issue of ‘reasonable and customary’ appraisals fees. Their definition is that ‘customary and reasonable’ are reflective of those fees established and negotiated by an FHA-approved, self employed independent fee appraiser.’ However, we have evidence that, on average, AMCs are only paying 60 percent of the reasonable and customary appraisal fee.”

New FHA changes also stipulate that the fee for the actual completion of an FHA appraisal may not include a fee for management of the appraisal process or any activity other than the performance of the appraisal. (See Appraisers Talk, FHA Listens at WorkingRE.com, Current Edition.)

Side Notes: The Good, the Bad and Shangri-La (Montana)
Reaction to coverage of HVCC and AMCs in the current issue of Working RE magazine has been mixed, to say the least. Comments range from gushing praise to tirades that would make Senator John McCain blush. Here are two of many.

“I just read your latest article, it was very enlightening. I have been in the business for 23 years and sound very much like the appraiser at the end of your article. I worked very hard to build a reputation and good list of clients, just to have it all taken from me. I have to start all over again but this time it is not about my education or my designations. The only thing 95 percent of the AMCs ask for if my license, that in itself should indicate they are not interested in quality or education of any kind. The only requirement they have is the bare minimum and the lowest fee they can get. I have one exception, and that has been Landsafe. Landsafe is the only reason I am in business today, they have a staff that is knowledgeable and they actually look for quality work,” said Kevin Talbott, SRA.

And this from another appraiser: “So how much are AMCs paying you to help them? Give me an article that defends appraisers and criticizes our enemies.” (Name withheld.)

Also, several appraisers wrote us puzzled about what the acronym “HVCC” stands for- they had never heard of it! One of these appraisers, who lives in rural Montana, told us he has not been effected one way or the other by the Code.

Getting Out: Why I’m Leaving Residential Appraisal
A sometime contributor to WRE, appraiser Mike Read, sends us this letter:

I used to love appraising. Long before there was any appraiser regulation my clients came to me for valuation opinions because of my years of experience in real estate and their recognition of my accurate and reliable reports. Then came HVCC. Now my clients of 24 years are not allowed to contact me. They have to order appraisals through a third party appraisal management company (AMC) which takes up to 60 percent of my fee for their trouble.

I have signed up with about a half dozen AMCs. One went out of business owing me over $7,000. Three asked for all my exhibits and I’ve never heard from them again. One expected me to complete a URAR for $90. My most recent AMC has not sent me an assignment in months due to their lack of volume.

I recently testified before my state legislature in support of a bill to regulate AMCs. My first suggestion was to support the repeal HVCC at the federal level. Secondly to ensure that a certified appraiser is on staff at the AMC to do review work and third to require the AMC to have a surety bond of $500,000 to $1 million so payment to appraisers is assured if the AMC defaults. Others recommended that AMCs become regulated by the State Appraiser Licensing Board.

I have 24 years of appraising experience, am licensed in two states as a General Certified Real Estate Appraiser, have been HUD approved for the whole 24 years without any complaints and have completed hundreds of hours of special education. What good has that done for me?

What is driving this patchwork quilt of ineffective appraiser regulation? Have you heard of “The Golden Rule?” He who has the gold makes the rules! The greed of lenders is the source of the problem and always has been. They are the ones with the money to lend. They are the ones that establish the lending guidelines that have to be followed by everyone else in the lending chain. They are the ones with the “pipeline” to keep full and flowing. When they run out of borrowers with 20 percent down they reduce the requirements to encourage borrowers with 10 percent down. Keep that pipeline full. When they run out of borrowers with 10 percent down they reduce the requirements again to encourage borrowers with five percent down, then zero down, then “no doc loans.” Keep that pipeline full.
What about the increased risk? Well, they just pack the loans up and sell them off to someone else in a mortgage backed security that is so far removed from the valuation process no one can figure out the value any more…not even the sophisticated investors. (Nobody thought to ask the appraisers!)

Now it’s time for me to say goodbye to my clients and friends in the residential real estate and financial service fields. You’ve heard of the theory of “trickle down” economics? Well here is how my exit from the business will trickle down to you all.

Dear MLS provider, I will be canceling my subscription for data services at the end of my current period ($105/Q).

Dear title company, I will be canceling my subscription for data services at the end of my current period ($85/mo).

Dear software company, I will not be renewing my annual software maintenance agreement at the end of my current period ($399/yr).

Dear Board of Realtors, I will not be renewing my annual dues this year ($375/yr).

Dear Appraisal Institute, I will not be renewing my annual dues this year ($330/yr).

Dear E&O insurance company, I will not be renewing my policy at the renewal ($500/yr).

Dear state of Washington, I will not be renewing my appraiser license at the end of the biennium ($500).

Dear state of Oregon, I will not be renewing my appraiser license at the end of the biennium ($500).

Dear education provider, I will not be needing any more CE credits so will not need any more expensive classes ($500/yr).

Dear AMCs, goodbye.

Dear Consumer, you are the only one I feel sorry for. I will no longer be in a position to provide you with an independent valuation for your largest lifetime investment. Your lender does not want you to know who I am, how to contact me, how much I charge, what value opinion I reach, they just want you to pay for some conforming paperwork. If they receive any bad news they just shoot the messenger.

For more from Mike Read, including his entire farewell letter: http://appraisals4realestate.wordpress.com/.

Editor’s Note: Bill Cobb is a wizard at using blogging, social media and other “new stuff” to increase business. Here, he generously shares his expertise.

Using Blogs to Grow Your Business
By Bill Cobb

This may seem shocking to you but I don’t own an appraiser “website.” I don’t need one.

I am not an expert in SEO (search engine optimization). My sites are not “PR5”s to “PR8”s (Google page rank) but I have figured out how to grab the attention of Google for those searching for local appraisers. You may ask, “Why appraiser blogging?” and, “Is it worth my time?” These are excellent questions- the same ones I asked. Here are the answers.

In early 2006, my experience with appraiser blogging began out of major frustration. I was spending almost $1,000 a year for a fancy website with all the bells and whistles and around $1,500 a year for online appraiser directories that weren’t producing many appraisal orders.

About that same time, my friend, Wayne Pugh, MAI, owner of SFREP appraiser software, taught me how to set alerts for Google content. So on the particular website with which I was working, I spent time adding content and updating it. Still, not many additional orders were produced nor was there an increase in Google attention. Then, when a blogging feature was added to that website, I began adding my local content but still, no attention from Google.

Fortunately, a relative sent us a link to his new Blogger Blog (Blogger.com), a free blog from Google, with photos from his missionary trip to Russia. So I started my own free appraiser blog that weekend. I took content from my website blog and posted it to my Blogger Blog and within one week I began receiving alerts of my published content called “posts.” Shortly afterward, I began receiving calls from national lenders needing appraisals. When I asked them how they found me, they said they Googled my area and I appeared at the top of the list. Cha-ching! So, I setup a free Wordpress Blog as well as blogging on two other free blogs.

Unfortunately, within two months, both blogs were shutdown because they were about the self-promotion of my business- a violation of their Terms of Service (TOS). All of those hours invested into my blog posts just evaporated instantly. Gone.

I learned two lessons early on: Blogs built into websites do not generally index well and free blogs generally do not allow appraisers to promote their services due to violations of TOS.

High Returns
By mid 2006, I learned how to self-host Wordpress blogs for my appraisal business ($8/month) while using free Wordpress themes. I adopted my own TOS and self-promoted my appraisal business 24/7. Then I learned that Wordpress was evolving from just a blog to a very easy-to-use CMS (Content Management System). Today, many are choosing Wordpress verses traditional websites because a blog has a built in pinging feature which indexes in Google within minutes or hours of clicking the submit button. Traditional websites don’t have this feature and Google gets around to them only every so often. Everything I do online is built in Wordpress- i.e. the appraiser blog setups that I build nationally with online appraisal ordering, online video business cards, video landing pages. No websites!

Why do Properly Setup “Appraiser Blogs” Trump Traditional Websites?
When I take the market data from a recently completed appraisal report and publish it as a blog post, a chain of events takes place. Note that I set these features up in advance. First, the pinging feature alerts 25+ top directories, including Google and Yahoo, which indexes my content. Second, my blog post is automatically sent out as a tweet on Twitter which is a very powerful Google indexing free service. Third, my post becomes an online podcast into iTunes, which is indexed by Google. Fourth, with a few clicks, my post is bookmarked onto my Facebook plus 20 other social media pages, all indexed by Google. Fifth, my post automatically get posted to “My Page” on Appraiser’s Water Cooler (Appraiserswatercooler.com) and any other directory I feed the content to. Doing all of this might take five to 10 minutes after the proper setup.

Because my posts are syndicated as podcasts, the reader can listen to the post or article being read to them with a click of a button.

Becoming a Trust Agent
Another appraiser experiencing success with Wordpress is Ryan Lundquist in Sacramento, California (Lundquist Appraisal Blog and Twitter@SacAppraiser). Ryan has come a long way in a short period of time generating 8,391 visitors in 2009 based on his “hit counter.” His is a testimony to how easy Wordpress is to use. Ryan has incorporated both local photos and short videos to make his posts very interesting. The philosophy that Ryan and I share is that our sites are where locals find out what’s really taking place in their uncertain housing market. Where else are locals going to get trustworthy news about their housing market? This is an appraiser’s opportunity to shine and become a “trust agent” within their local community. Has this effort paid off for Ryan? Yes, in the form of multiple tax appeal appraisal assignments (non-HVCC compliant appraising).

What is Appraiser Blogging?
Appraiser blogging is simply taking information or 1004MC research data from your local market and quickly publishing it to your blog and adding a photo, aerial image or charting to make it appealing to your local and national readers. An appraiser can also take a published article from his local news or business report, tell his public about this news article and offer his expert commentary on what’s been reported. An appraiser can also engage his readers with polls about their market. Appraiser Blogging has replaced my traditional appraiser websites.

Why do Appraiser Blogs get Google’s Attention for Online Searches?
Google loves to index blogs with fresh content, images and video. Wordpress Blogs have superior built-in pinging features that automatically syndicate your post to the search engines. In other words, when an appraiser in Birmingham, Alabama adds a blog post with the title, “Birmingham Alabama Real Estate Appraisers Offer Pre-Listing Appraisals,” that appraiser will be indexed in Google for national online search for those keywords. When a local homeowner wants to sell a For Sale by Owner (FSBO) and needs an appraiser to price their home, they Google similar keywords and that appraiser is found and gets the assignment. This works similarly for FHA work. Properly tagged images also help you get found– just do a Google image search for “Baton Rouge Real Estate Appraisers” and see what I’m talking about. Adding your own YouTube appraiser channel helps one dominate their markets for local real estate video search. Then, adding video content to your blogs further engages your visitors. Offering an email update allows your readers to receive emails when you post updates to your blog.

Measuring Time and Effort
I take my 1004MC research data, a photo of the subdivision entrance sign and a trends graph and report that information on my blog. Since I’m already doing the work for my appraisal research, I’m not adding much time. Using free software, it might take me five extra minutes to format the post and click submit. At a minimum, two blog post per week are optimal, which adds about 10 minutes a week. And, when one begins to see how effective this is for Google Searches, it won’t take long to realize the reward for your time.

Michael Gerber, in his now famous “E-Myth” philosophy, spoke of working harder on your business rather than in your business. Gerber reminded us that “technicians,” like appraisers, especially have this challenge because we are so busy “doing it, doing it, doing it” or getting out appraisals. Consequently, we often fail to work on our businesses. For me, appraiser blogging has been my opportunity to work on my business and reap the rewards of being found online.

Giving Credit Where Credit is Due
I didn’t start this appraiser blogging trend and I acknowledge that appraiser Brian Davis, with Appraisal Scoop, was very inspirational and helpful in my start. Brian was the first to publish my “Appraiser Liability – Dodging The Bullet!” content nationally and took the time to professionally format the article in Typepad. Other inspirational appraiser bloggers are: OREP/Working RE Magazine’s Appraiser Talkback Blog, Jonathan Miller’s Matrix Blog and Frank Gregoire’s Appraiser Active Blog. And, to Danny Wiley in Tennesse, for introducing me to “Snagit” screen capture, which has changed the professional side of my life.

It’s 2010. Blogs, video, and the “Big 3” in social media (Facebook , YouTube and Twitter) are making it very easy to be indexed by Google. With 76% of real estate agents on Facebook, as per the National Association of Realtors, it’s time for appraisers to catch up! Appraisers who are taking control of their online marketing are seeing the fruits of their marketing labor and are saving time and money by spending more effort on their businesses instead of in them.

About the Author
Bill Cobb is a full-time residential appraiser in Baton Rouge. You can find him on Twitter@appraiservideos. Bill builds “appraiser video blogs” with online ordering capability, teaches appraisers how to “blog to be found” on local online searches, how to use the new social media and video marketing to increase business. Visit: Appraisersblogsample.info. Bill also teaches “Appraiser Video Marketing” at AppraiserVideoMarketing.com.