Appraisal Referral Realities
You will find that the vast majority of Realtors and some other third parties won't recommend you for appraisals if you're too honest and too thorough. They won't recommend you because you may kill their deals by finding problems with the house or condo. If that happens, then they'll end up losing their commission, their fee, or their profit on the sale. People like that will only refer customers to you with strings attached. If you don't move the deal along by not telling the client about any problems in the house, then they get angry and won't recommend you again. Don't bother with these types of people. It'll be very hard to avoid them in business, so just try to ignore them. You can get more than enough business from honest people. You don't want to "sell your soul" just to make money, so who cares if they don't recommend you.
You will find the vast majority of Realtors won't recommend you for appraisals if you're too honest and too thorough.
Honest Realtors and third party people will recommend a good, thorough appraiser. They know that a good appraiser will satisfy the client that the estimated market value of the house or condo has been thoroughly evaluated. Unfortunately, you may find that the honest third party people who will recommend you if you're good, can be extremely outnumbered in some areas. And I'm not talking about your clients, because they'll always recommend you if you're good. You just want to do business with the honest third party people so you can sleep with a clear conscience at night.
The only way you're going to make big money on a steady basis in this business is to have satisfied clients who refer customers to you. If you have steady referrals from former clients, then you won't even have to advertise and your phone will ring off the hook for appraisal jobs. That's when you know you have a rock solid business that's going to make you a lot of money for a long, long time. And you want to be in this for the long term. The people that make the most money in this business, are the ones who have the most satisfied clients. Even in a recession, they still make money, because houses are still sold when the economy is bad. The only difference is that houses sell for less money, but they still need to be appraised.
There's a big difference between referrals from satisfied clients who you've done appraisals for, and referrals from Realtors who send customers to you just because you "move the deal along."
There's a big difference between referrals from satisfied clients who you've done appraisals for, and referrals from Realtors and third parties who send customers to you just because you "move the deal along." If you just move the deal along and don't do a thorough and professional appraisal, then the client is going to know that after the appraisal is over. They might not say anything to you, but they just won't recommend you to their friends or business associates. I've seen it before in some other appraisal companies. They get all of their business from dishonest Realtors because they don't tell the client about anything wrong with the house, nor give an accurate estimate of the market value, and they just move the deal along. These appraisers end up being owned by dishonest Realtors and other third parties because the third parties have control over their income. I don't know about you, but I don't like anybody having leverage over me.
They get all of their business from dishonest Realtors because they don't tell the client about anything wrong with the house, and they just "move the deal along." These appraisers end up being owned by the dishonest Realtors.
Let me explain how you will be "owned" by the dishonest Realtors if you get most of your business from their referrals because you move their deals along. With these types of referrals from dishonest Realtors and third parties, you can't tell the client about anything important being wrong with the house. The only thing they want you to tell the client is if some minor repairs are needed - but nothing else! Also, you have to "fudge the numbers" by slanting the market value estimate in your appraisal report so the deal closes and the Realtor gets their commission. If you do tell your client about important or costly repairs that are needed with the property, and it creates any problems or kills the deal, then the Realtor gets angry and will never recommend you to their clients again!! Regardless of the fact that you were being honest with the client, they still won't recommend you anymore.
Dishonest Realtors and third parties don't want you to say anything that will throw a monkey wrench into their deal! It doesn't matter how many other deals you moved along for the dishonest Realtor or other third party person. If you create problems with, or kill, just one of their deals; then that's it, you're cut off and they tell their clients not to hire you for appraisals anymore! And if the dishonest Realtors cut you off after you've been catering to them and kissing their ass for a long time just to get referral business from them, then you're really in trouble! You're in trouble because you don't have satisfied clients to refer you for future appraisals. Then your phone stops ringing and your appraisal income goes down to nothing. The reason you won't have satisfied clients recommending their friends to hire you for their appraisal needs, is because the clients will know after they hired you that you were "in bed" with the dishonest Realtor and you were just moving the deal along to satisfy the Realtor and NOT your client!! People aren't stupid. Your clients might not notice during your appraisal that you're compromising your morals and "hanging them out to dry" just to keep the Realtor that recommended you happy. However, your clients will notice they've been scammed after our appraisal and/or the deal closes. Especially when the problems that you should have told the client about start "coming out of the woodwork".
You don't believe me? I've heard quite a few war stories about appraisers who can't find any new business due to the poor quality of their work in the past. I've even seen it happen firsthand with a local home inspection company in my area. This home inspection company was run by an older man that just moved deals along for the Realtors. When the older inspector retired and a new inspector came in and started doing good, honest and thorough inspections, the phone stopped ringing! All of the dishonest Realtors and third parties stopped using the new inspector because he didn't cater to them and move the deals along like the older inspector had. The phone didn't ring from client referrals either. This is because none of the former clients would recommend anyone to this inspection company. They wouldn't recommend anyone because they knew the work was of such a poor quality from the older inspector. This created a terrible reflection on the company name, even after the older inspector retired. To make matters even worse, the only phone calls that did come in were from unhappy former clients of the old inspector. These people called to complain about the inspection services he did. They didn't call to refer more inspection business to them.
There's another drawback to getting all of your referrals from dishonest third parties. What happens is, the client buys the house or makes the loan and then finds out after the fact, that there are some problems. The client decides that the appraiser should've noticed these problems during the appraisal and told the client about them. Or possibly the market value estimate was way off base. So what does the client do? He gets angry because he knows the appraiser wasn't thorough or professional, and he sicks his attorney on the appraiser and files a lawsuit. Real estate appraisers like that end up being sued out of business.
So you see, the only way to make it in this, or any other business, is to do good, honest and professional work. If you "sell your soul" then your income and your reputation are going to pay dearly for it.
So you see, the only way to make it in this, or any other business, is to do good, honest and professional work. If you "sell your soul " then your income and your reputation are going to pay dearly for it. And you won't even sleep well at night. I've found that some people have an amazing ability to rationalize their actions, no matter how bad they are. So let the dishonest Realtors and other third parties sell their souls. Just don't ever compromise your own integrity. Too many people compromise their integrity for money. I think that money is like a truth serum. It brings out the true character of a person, deep down inside, whether they're good or bad. There's an awful lot of "white collar crime" that goes unnoticed and unpunished because people rationalize their actions. They deliberately hide problems from the clients. Then they kid themselves thinking that there's nothing wrong with burying things underneath a blanket of deception.
I've had many Realtors and sellers complain because my home inspections take three or four hours. They also complain because of the amount of research and time I spend on my appraisals. They don't want you to be too thorough or to spend too much time in the house, or on writing the report. My clients never complain because I spend three or four hours inspecting a house they're planning to buy. So why do Realtors and sellers complain about it? They seem to forget, that my fiduciary responsibility is to my client and not to any Realtors or third parties. However, if they ere buying the house, well then, it would be a totally different story. I'll talk more about hypocrites later.
I'm certainly not being a hypocrite myself or talking out of ignorance. I let my track record and integrity speak for itself: Less than one percent of my clients have ever called me up to say that they were unhappy with my services. I've even turned away business by being honest with people. There are many dishonest Realtors whose business I have turned away. I told these Realtors that I didn't want their referrals for clients. The reason for this is that I knew they would complain if I did a thorough home inspection or appraisal. Other examples are, I've done appraisals and inspections on houses that were taken back in foreclosures, or the houses were part of estate sales after someone had died. These houses had all of the utilities turned off at the time I arrived to do the inspection. You can't do a proper appraisal and/or home inspection on a house without any utilities turned on! The reason for this is that you won't be able to test any of the operating systems. I would be up-front and honest with my clients. I'd tell them that rather than go ahead with the inspection, they'd be better off waiting until the utilities were turned on. If they delay the inspection, I wouldn't have to charge them a fee for a limited home inspection. Sometimes these deals would fall through because another buyer would come along before he utilities were turned on, or some other reason. Therefore, as a result of being up-front and honest, I would lose money. However, I'd rather lose the money, then do the inspection and not feel good about it. I hope that's the way you run your business also.
An educated home buyer or seller is a dishonest Realtor's worst nightmare!!
If you go into this business, then you're going to come across many dishonest Realtors and other third parties who will try to get you to "move their deals along. " I'm letting you know ahead of time that's it's going to happen, so don't say I didn't warn you about this. Often what dishonest Realtors will do is try to butter you up when you first show up at the subject property. Sometimes they'll even call you up before you go out to the site and try to butter you up. What they say to you is, "Oh, can I have one of your business cards. Our office is always looking for new appraisers to recommend to our clients. " They lie to you by saying this to make you think that they're going to refer their future clients to you for appraisal or home inspection work. However, it's the same old con game that they're playing. If you don't "move their deal along," then your business cards will end up in their garbage can as soon as the Realtors get back to their office. (I have an awful lot of business cards and brochures that have ended up in dishonest Realtor's garbage cans. My cards ended up in their garbage because I was too honest and thorough with my clients Remember, an educated home buyer or seller is a dishonest Realtor's worst nightmare!!!)
So remember, don't let any Realtors or other third parties butter you up on an appraisal. Be on your guard when they ask you for your business card so they can supposedly refer other clients to you. Translated into English, what they're really saying to you is, "Don't tell the buyer that anything's wrong with the house and we'll give you some referral business. This way the both of us can cheat and deceive people and line our pockets with dirty money."
You'll also come across another offshoot for this type of Realtor and third party dishonesty if you go into this business. Dishonest Realtors will sometimes say to you, "It's not what you say to the client, it's how you say it that matters. " Translated into English, what they really mean by saying this to you is, "Don't tell the buyer that something, such as the heating system is old and can die at anytime. Just tell them that it's working properly now because that's all they need to know. Don't mention anything to them about getting estimates to replace it."
They want you to "sugarcoat" everything so it all sounds fine and dandy in greedy Realtor fairytale land. Basically, dishonest and greedy Realtors ONLY ant you to mention if some minor maintenance and repairs are needed on the property - and that's it!