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Featured news — posted April 13, 2004
A new mortgage boom

Mortgage brokers' boom has busted, read a headline the April 10 edition of the Dallas Morning News. The premise of the story was that abating refinance activity was squeezing new brokers out of the profession, and slowing entry into the arena, so lucrative for two-plus years, to a trickle.

They didn't ask us. We could have told them that mortgage activity is in fact as high as it's ever been — right up there with the summer of 2003, widely regarded as the history-making peak of mortgage demand.

More than 1.8 million appraisal reports passed through our Mercury servers in the month of March, more than any other month except for July 2003, and it only missed the record by about 4,000, or 0.22 percent. 1,950 gigabytes' worth of files were routed back and forth between appraisers and their clients in March, the digital equivalent of all the x-ray films in a large technological hospital.

Back in July, when more transactions passed through our servers than any other time, housing starts hit a 19-year high, but new home sales have historically been around five times smaller than existing home resales. No other leading indicator out there would have told real estate professionals and economy watchers that new single family home sales would reach their 2003 peak in August, and existing home sales would set a record in September.

Naturally, we set our own records every month in terms of customers and lenders using our software and services, so we add to our server volume all the time by getting new people to use our servers. Even considering that adjustment, the majority of appraisals in the United States are completed using our software, and the lion's share of transaction volume is through our servers. (And anyway, we wouldn't hesitate to let you know if our customer base expanded by 48.4 percent in three months — it didn't, but our server volume did.)

Next time someone tells you the mortgage boom is fizzling, let them know it's not. And you're not basing that on mortgage application volume, because applications can be denied or withdrawn, or redundant applications can be made and the best deal chosen by the borrower. Nobody orders an appraisal till the deal is almost certainly done. The next few months should see historic real estate activity once again.

What will your website do for you?

Very soon we'll be announcing Professional and Enterprise level Appraiser XSites, which will add built-in merchant account/credit card order processing, advanced Themes and Flash intros, a logo builder, site statistics reports, and a built-in "marketing kit" that will help you do business — online and offline — more productively.

Why? A website is a website is a website, right? We already blow away everybody else selling websites. The answer is that we understand what you need a website to do and how like anything else — formfilling software, a backup service, a laser measuring device, a cell phone — if you're given the right tools, you'll make yourself more productive.

It sounds very tech-boom 90s-ish to say everybody needs a website. But it's certainly true. Appraisers generally don't market to the public, deal with customers who aren't the most technologically savvy themselves, and haven't had five minutes of free time to breathe in two and a half years, let alone set up a website. But even so, the question in recent years hasn't tended to be whether an appraiser needs a website at all, but what kind.

A site is successful if it's memorable, functional, and "sticky" — keeping people there and bringing them back.

Appraisers need websites to do certain things: save them time and provide tools for their clients. If appraisers' website needs weren't unique, we wouldn't build Appraiser XSites (and thousands of you wouldn't have bought them so far). But more broadly, professionals and small businesses of all stripes need websites for the following five reasons. Your mileage may vary, of course, but some combination of these is applicable to almost everybody:

  • Today, a website means credibility. Not having a website today is like not having a Yellow Pages ad years ago. And having a free, unprofessional looking website is like having an abbreviated, one-line business listing in the white pages instead. Why do you have business cards and a business phone number? That's the same reason that today you need a web address. All the better if you have a domain name (whatever.com) that's specific to your business. In short, when you have a website, you have credibility in today's economy. And the more professional, functional and unique your website, the more credibility you have.
  • A website gives you a leg up on your local competition. If your local competition does not have a website, having one will make you more accessible and customer- or client-friendly than they are. Having a website makes information about your business or services available to anybody with Internet access when they want it, even 3 a.m. on a Sunday. Of course, if your local competitors already have websites, then they enjoy that advantage over you, and you need to play catch up.
  • Websites act as a "base" for your overall marketing effort. If you use resources such as the Yellow Pages, flyers, advertisements, e-mail, direct (postal) mail, and telemarketing, you'll be able to refer people to your website over and over again. Referencing your website in print and other media also enables you to save money on those forms of marketing as you can buy fewer pages or smaller ads and simply refer potential clients or customers to your website for full information. Even if the people you reach through traditional marketing efforts don't visit the site (and most will), the mere fact of referring people to it will help make them take you seriously.
  • Cross-sell to a captive audience. Having a website can be a great way to showcase the quality and range of your products or services, something customers and clients often want to know about. For example, if you offer services other than home appraisals, your website is a great way to show potential customers your other services.
  • A website is a creative exercise. For many small businesses, creating a website is their first comprehensive marketing effort. If this is you, you'll find yourself really thinking through what you're doing and why people should do business with you, maybe for the first time since you started out. This effort can make you rethink and improve what you offer.

Of course, not one of you will buy (or has bought) an Appraiser XSite unless it saves you time and makes you more productive. We work very hard to make sure they do just that, too.

ASC continues to accumulate a surplus

The Appraisal Subcommittee (ASC) took in $2,311,175 in fees from appraisers in 2003, and spent $2,030,382, including $791,317 in grant payments to the Appraisal Foundation. The information was released as part of the ASC's 2003 Annual Report, made available at the ASC's website March 31.

The General Accounting Office (GAO) noted in its comprehensive May 2003 report on the state of the federal appraiser regulatory scheme that the ASC's surplus was in the millions. “The Appraisal Subcommittee told us it did not have the current-year funds to fully meet the ASB’s and AQB’s grant requests over the past three years. However, the Appraisal Subcommittee had a $3.7 million surplus as of December, 2001,” the report said. “According to Appraisal Subcommittee officials, the surplus was built up in its early years of operation when its revenues exceeded its expenses and grants to the ASB and AQB. Subcommittee officials stated that in recent years its expenses have increased — primarily due to inflation and expenses associated with its monitoring activities — and that this in turn has limited the amount of funds available for grants.”

According to the financial statements included in the annual report, the ASC's surplus stood at just over $3.9 million at the end of 2003.

  
News briefs
Appraiser salaries stable in largest markets
Salary.com, a "provider of Web-based human capital management products," aggregates compensation data by market area and profession by polling businesses for the salaries, bonuses and benefits they give to certain job titles. Now, many real estate appraisers aren't employees — they're either employers, or independent contractors — but the site's data on real estate appraiser compensation is still worth a look.

Following are base salary ranges for the top 10 MSAs (according to the 2000 U.S. Census). The first number is the median salary — the number at which half of salaries in the market are higher, and half lower. The next number is the 75th percentile salary, and the third is the 25th percentile.

New York, NY $56,459
75th %ile $70,031
25th %ile $45,332
Los Angeles, CA $54,602
75th %ile $67,727
25th %ile $43,841
Chicago, IL $53,135
75th %ile $65,908
25th %ile $42,663
Washington, DC $51,864
75th %ile $64,331
25th %ile $41,643
San Francisco, CA $57,046
75th %ile $70,758
25th %ile $45,803
Philadelphia, PA $51,767
75th %ile $64,210
25th %ile $41,564
Boston, MA $53,184
75th %ile $65,968
25th %ile $42,702
Detroit, MI $53,673
75th %ile $66,575
25th %ile $43,095
Dallas, TX $49,958
75th %ile $61,966
25th %ile $40,112
Houston, TX $50,838
75th %ile $63,058
25th %ile $40,818

EEOC makes USPS pay depressed employee's appraisal fee
Finding the U.S. Postal Service liable for aggravating its employee's pre-existing depression, the Equal Employment Opportunity Commission (EEOC) awarded the employee $82,959.40 in damages. The employee was forced to stop working as a mechanic and eventually landed a clerk's job. "The complainant indicated the agency's actions caused him severe emotional distress, financial hardship and marital strain that eventually led to divorce, insomnia, embarrassment and depression," it was reported. "Ultimately, he attempted suicide."

Included in the damage award is reimbursement for fees and appraisal costs incurred when the employee was forced to take out a mortgage to cover living expenses when he was forced out of his mechanic's position.

Senate panel approves flood insurance program changes
A bill extending the National Flood Insurance Program, without which millions of mortgage loans cannot be closed, for five years passed the Senate Banking Committee by voice vote this month. Included in the bill is a change that would increase insurance premiums for homeowners in flood-prone areas who suffer flood damage but do not relocate or flood proof their rebuilt or repaired residence. Claimants' flood insurance rates would jump 50 percent after a second claim on the same location, and another 50 percent on a third claim.

The aim of the NFIP is to save net taxpayers' dollars by investing homeowners in the rebuilding of flood-damaged homes in flood-prone areas. John Stossel of ABC's 20/20 said, "That's government logic: Since we always mindlessly use taxpayer money to bail out every idiot who takes an expensive risk, let's get some money upfront by selling them insurance first."

Send tips and feedback to the editor: mattb@alamode.com.

e-Newsletter archives



e-Newsletter 4/6/04
IRS targeting number-hitters

e-Newsletter 3/31/04
Airing FIRREA's laundry on Capitol Hill

e-Newsletter 3/23/04
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