Commercial Grade is a weekly post by John Cicero, MAI who provides commentary on issues affecting real estate appraisers, with specific focus on commercial valuation. This week, after a winter slumber, John looks at client traffic patterns and explains why sharing information is not a one way street.
Disclosure: John is a partner of mine in our commercial real estate valuation concern Miller Cicero, LLC and he is,
on Thursdays on Fridays, one of the smartest guys I know. …Jonathan Miller
I am on the list of approved appraisers for a major national bank. I’ve submitted dozens and dozens of bids over the past year, and was not awarded even one assignment. It is this lender’s written policy that they must select the lowest fee and, as I’ve said on my Soapbox before, I never aspired to be the lowest feeonly the best appraiser. (However, in the interest in developing a relationship, I have in my opinion submitted quite aggressive fee proposals)
What, then, to do about the frequent phone calls that I get from this bank’s loan officers who are looking for market data for their underwriting? This has been a real dilemma for me. My regular clients know that I will do back-flips for them when they need somethingbut I am not sure how to respond to these particular requests.
I presume that I get these calls because they know I have good market data. My firm keeps abreast of the condo market and, with our Miller Samuel affiliation, probably have the best condo database in the City. Sodo I continue to send out this data to the underwriters, who will then turn around and hire another appraiser? Do I trip over myself, gushing that I’d be happy to supply them with valuable market data in the hopes that maybejust maybethis time they’ll pick me from the field of appraisers that they’ve sent bid requests to? Do I tell them I have just what they need but I am not going to help them, and risk being taken off the list.
Or do I just get their email address and send them a link to this Soapbox post?
For a while I’ve explained to the callers that I am happy to help them, but they need to remember that it’s a two-way street. But nothing has changed and I am still grappling with an appropriate response.
I would appreciate any feedback and advice from Soapbox readers.
Tags: Soapbox Blog, Appraisal Fees, Commercial Grade
My company often finds itself in the exact same situation. We have a sterling reputation but cannot compete with the lowest common denominator appraisers who get the vast majority of work from some particular lenders. As a result, we rarely even bother to submit bids to the lenders who seek only the lowest fee.
In your post, you noted that the loan officers frequently call you in search of market information, which you then provide for free. I don’t know who is in charge of awarding assignments for that particular lender, but it is possible that the loan officers are not even aware that you aren’t getting assignments. It that were the case, you could ask the loan officers if they can use any influence they might have to ensure that you receive some assignments in cases where you have submitted a reasonably competitive bid. If, however, the lender will not provide you with any assignments, then why on earth would you provide them with free information, perhaps enabling your competitors at the same time? That behavior seems naive in the extreme.
A quick aside: what is the value of being on a lender’s approved list if you never receive even one assignment? As far as I can tell from your post, only the lender is benefiting from your inclusion on their approved list. That is not a business relationship.
John-either you are being too elliptical with the these guys or they do not understand the FACTS OF LIFE. DO NOT BE EMBARASSED to explain it to them and if they still have the stupidity to call you for data when they have not given you the assignment they are not worth getting aggravated about.
While I am not opposed to lower fee work, I personally do not work for free. I am probably not the best source for opinion given the fact that I work mainly in the residential side of the business, but “comp checks”, “verbals” and “market data inquiries” are not part of my firm’s list of products and services. I would say unless the lender is willing to work WITH you, they should not be given the opportunity to mooch (for lack of a better word) off of your expertise. It’s like asking a lawyer to give a detailed opinion of a client’s chance to win a case, and then hiring another lawyer to take the case. I wouldn’t give up though. If you can talk to the right people, I think the lender will be happy to keep your valuable services within their firm.