When a commercial fee appraiser gets a reviewer’s email, they say “Awesome!” No. Never.
The reviewer’s email is often met with the five stages of review: denial, anger, bargaining, depression and acceptance (DABDA).
This is a colossal waste of time.
We can do better.
Let’s focus on the productive risk management outcomes with effective reviews.
If Gandhi was a reviewer
Larry Sage, an appraiser with lots of letters (MAI, AI-GRS, CEA, ASA), puts the following statements in his review emails. The bold text is mine.
“The appraisal review process raises the level of professionalism among appraisers and encouraging appraisers to produce consistently high-quality reports. Appraisers should embrace the challenge of a thorough review because it gives valuable input about how an appraiser’s work measures up to peers.
Successful reviewers are fair and should give the appraiser the benefit of any doubt. This is especially true when an appraiser’s reputation and livelihood are at stake. At its worst, the review process can be slow, tedious, and difficult for both the reviewer and the field appraiser.
At its best, an appraisal review can be a smooth, satisfying process that improves client satisfaction and confidence and establishes a mutually rewarding professional relationship between the reviewer and the appraiser.”
Denial. As commercial appraisers, we work hard trying to get everything right. The problem is we’re bouncing around (page up page down times 1,000) a 120 page report looking for typos, valuation inconsistencies and word processing formatting. It’s exhausting.
Oftentimes, the review is catching low hanging fruit like missing insurable value, fee simple interest instead of leased fee interest. No FF&E allocated. You know the drill.
Without report writing software like DataComp Suite, it’s really easy to spend a ton of time putting together a report only to get that review. “On page 81, the Sales Comparison Approach value is $1.2 million but on page 107 its $1.25 million. Please revise.” Sad face.
Anger. This is an easy one. You’re probably already two to three reports deep and having to go back to something you did a week ago can be frustrating. Sometimes the source of anger is recognizing the reviewer’s comments are correct. You made a mistake.
This stage is largely about ego. Like the movie Frozen, “Let it go, Let it go.”
Dawdling for dollars
Bargaining. “I promise I’ll write perfect reports from here on out if I don’t have to respond to this review.” Some do mental bargaining. “Should I respond to this reviewer? Is it reasonable what they’re asking for? Maybe I can ignore it and it will go away. Maybe if I just glance at the email, it won’t seem that bad.”
This time investment is not productive for you or your client.
Channel your T. Swift: Shake it off
Depression. This can be defined as anger without enthusiasm. This is just anger in disguise. Another humongous time waster.
Starting line of productivity
Acceptance. This is the sweet spot of productivity. This is when you truly realize that the review process is not about you, your experience, or your expertise. It’s about process. Even the review gets reviewed.
It often comes down to old school typos. Missing stuff that was in the engagement letter. Happens daily.
With acceptance comes learning. With learning comes a better report. Over time, thinking like a beginner always results in the opposite of thinking you know everything. A lot of mistakes can come from autopilot, not giving reports your full attention.
It makes sense. Appraisal volume is at an all-time high. Mistakes, often through omission, will happen. It’s best to have documented procedures and software to minimize having to go through DABDA.
Relationships beyond the report
So, what perspective of reality needs to be changed? I would start with improving the relationship between commercial fee appraisers and their bank clients. Truly understanding the challenges each side faces can facilitate improved relationships, report quality and ironically increased productivity.
If you work in the appraisal department, reach out to your fee panel. You might be surprised to find out that there’s an issue. Perhaps the appraiser’s bidding is limited to a few property types or geographical area. Maybe you’ve pigeonholed them to do nothing but evals.
Tweak your appraisal ordering platform like YouConnect to put your vendors on the right seat on the bus. Grade your vendors but talk to them as humans.
Whatever the issue, invest in your relationships. Avoid DABDA.
Let it go.