Book 1 - Appraisal Institute of Canada

More documents

Recommendations

Info

Member profileResponding to arapidly changing marketplaceThe advent of Appraisal Management Companies (AMCs) is among the latest developments changing the marketplace in which today’s real estateappraisers must find a way to thrive. Over the years, the market for real property appraisal services has evolved with the introduction of newtechnologies including automated valuations and other risk assessment tools. Products such as mortgage and title insurance have reduced the needfor full appraisals. Appraisal management companies have flourished in Canada and in the United States. And then there is the economy – the downturn thatstarted in 2008 is still being felt coast to coast and it appears that recovery will be slow. The negative impact on AIC members has been significant.Kevin Fedynak, CRADave Cunningham, CRABarry Lebow, CRATake Kevin Fedynak, CRA, for example.Over the past 30 years, he built a trustedrelationship with the major banks. At onepoint, Halvorsen Fedynak & Company Inc.– of which Fedynak is a principal – receivedup to 150 requests per month for appraisalsin the Edmonton area from one majornational bank alone. Those days are goneand requests for appraisals have droppedsubstantially, primarily as a result of theeconomic slowdown. This has resulted in asignificant reduction in Halvorsen Fedynakstaff.This situation is certainly not unique toFedynak. In the Durham Region of Ontario,Dave Cunningham – a CRA since 1984– has also experienced a sharp reduction inhis mortgage appraisal work.Barry Lebow, CRA, has been in theappraisal profession for more than 40 years.He has always seen his work in the world ofOntario real estate valuation as a business,first and foremost. “We lose clients all thetime because it is the natural course ofbusiness,” he notes. For instance, in the1990s, Lebow and his partners built a largeclientele among Canada’s trust companies.When most of the trust companiesdisappeared, the firm’s revenue declinedfrom $1.5 million to $475,000 in one year.“So I went out and found another client,” says Lebow, adding that hegradually built a relationship with a developer specializing in buying andselling apartment buildings. “You have to continually go out and reinventyourself.”Over the years, Lebow has diversified into everything from estatesettlements to litigation work, insurance replacement valuations, divorcesettlements and expert witness appearances. “There is so much morefor an appraiser to do and with higher fees than the mortgage business,”he explains. In fact, today, his firm does anything but mortgage work,something in which Lebow sees no significant revenue.Similarly, Cunningham is now of looking at other options andopportunities. He has already started to do some work in litigation,relocation and power sales, although, he admits, not in any great volume.His attention has also turned towards distressed and contaminatedproperties, an area that is developing into a niche market. “I am looking atopportunities where I might need to reeducate myself and retrain myselfto do certain types of work. There are opportunities out there. Some ofthem are related to work I already do and that I am looking to expand. As aprofessional, I do not feel I have the skill sets yet, so I have been looking tosee what courses are available from the AIC or through other sources.”Lebow sees ongoing education and professional development asessential to maintaining an appraiser’s status as a professional. Continuouseducation is also a key component to attaining the highest level of businesspractice. Lebow divides the development of a business into four levels: i)unknown, ii) commodity, iii) secret expert, and iv) go-to expert.He notes that, after surpassing the entry level point of being anunknown, many appraisers are content to remain at the commodity levelproviding a specified, if often highly honed, service for a fee. However, theproblem with the commodity level is its vulnerability to market supply anddemand, bidding wars and undervaluing of service.14Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents
To avoid falling into this situation, appraisers can develop a relationshipwith a client whereby that client will rely exclusively on their ‘secret expert’for information and services. However, these clients may not have a sphereof influence in their workplace. When the contact is gone, the work dries up.Or, as in the case of AMCs, the client’s sphere of influence may not extend tomaking the final decision on how valuations are ultimately assigned.A solution to this dilemma, Lebow explains, is to evolve the business tothe next level and earn a reputation as a ‘go-to expert.’ When the commonconsensus is that particular appraisers are the only reliable resource toaddress a particular issue or need, existing clients will feel compelled toreturn and new clients will seek out their services.“The banks know that a quality job willbe done, we will always be honest withthem and it will be a true value.”Kevin FedynakAlthough education and professional development are obviously criticalto reaching this position as an authority, so, says Lebow, is marketing. Herecommends becoming an authority, not only by reading a wide variety ofprofessional journals and taking courses, but also by giving presentationsand writing articles.Over the years, Lebow has authored countless articles, text booksand courses. He is the guest speaker at many real estate seminars aswell as Ontario Real Estate Board meetings and is frequently quoted asan authority by the Toronto Star and other media. He has also served onnumerous boards, professional organizations and public task forces in thereal estate field.But even appraisers who are just starting out can quickly build theirreputation as an authority with effective marketing. He suggests that anyappraiser can build a thriving business by devoting half an hour twicea week to social media. Lebow himself uses blogs, Plaxo, Facebook andLinkedIn to effectively build his client base and nurture existing clientrelationships.“You have to continuallygo out and reinvent yourself.”Barry LebowDisseminating information does not have to be time consuming. Everytime he reads an article he finds interesting, he sends a copy to clients andcolleagues such as lawyers or insurance brokers. “The feedback is amazing,”he says. “I get business from it. It is becoming very important.”He points out that something as simple as adding a client’s e-mailaddress to his distribution list after performing an appraisal pays hugedividends in terms of building his business. “If I were starting over again,I would data base everybody,” he says.After all, he says, computers are only going to play an increasingly importantrole in the coming years. Some day, they may even become the only way in whichthe future generation obtains its information. Although many CRAs are focusingtheir attention on the AMCs, Lebow predicts that the sophisticated computergeneratedvaluation data and analysis will one day put the appraisal managementcompanies out of business. Until then, however, he sees some appraisers specializingin mortgage valuation as speeding their own demise by undercutting theircolleagues. “How can you do a good job if you are being underpaid?” he asks.“Those who are willing to be the lowest bidders are keeping the industry down.”But not all appraisers are taking this approach. Like Cunningham, Fedynakrefuses to lower his fees to undervalue the thorough professional mortgage“There are opportunities out there. Some ofthem are related to work I already do andthat I am looking to expand, so I have beenlooking to see what courses are availablefrom the AIC or through other sources.”Dave Cunninghamclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 15
Page 2 and 3: Get Started with CRAL2010CRAL2010 o
Page 4 and 5: Volume 54, Book 1, 2010Published by
Page 7 and 8: President’s MessageLe temps - Una
Page 9 and 10: The Institute and its members must
Page 11 and 12: • offrir soutien, conseils strat
Page 13: AIC’s 2010ConferenceCanada’s ga
Page 17 and 18: Legal news & viewsBy Ludmila Herbst
Page 19: into the mix, however, care must be
Page 22 and 23: Professional AffairsTaking ownershi
Page 24 and 25: InvestigatingBy Mike Schulkowsky, A
Page 26 and 27: AppealCandidates anduse of the term
Page 28 and 29: International Valuation StandardsBy
Page 30 and 31: Learning AdvisorySpotlight on Conti
Page 32 and 33: PGCV gradsenhance career opportunit
Page 34 and 35: Designations/Candidates/StudentsAIC
Page 36 and 37: NewsResearch and Development FundTh
Page 38 and 39: NewsON THE MOVEOlscamp promoted in
Page 40 and 41: “Given theprojected growthin the
Page 42 and 43: Strategic asset management (real pr
Page 44 and 45: the building (mould or asbestos), c
Page 46: Calendar of EventsAICBCAB2010 Appra

Book 1 - Appraisal Institute of Canada

Create successful ePaper yourself

Delete template?

Save as template?