PERSON OF THE WEEK: The debate rages on: Is there really an “appraiser shortage” as some claim? And will technology and automation one day replace human appraisers?
Jeff Sandman, co-founder of national appraisal management company Pendo Management Group, based in Lee’s Summit, Mo., tells MortgageOrb in a recent interview that he is mostly definitely seeing attrition in the appraiser space, but he doesn’t see technology eliminating appraisers’ jobs anytime soon.
Pendo, which Sandman founded with partner Mike Peck in 2009, differentiates itself through its client and vendor relations programs, proprietary operational processes and monthly client scorecard – a performance based report that rates the AMC’s monthly activity according to factors such as turn times, returned appraisals and quality.
The growing AMC recently announced a strategic partnership with The Mortgage Collaborative to provide appraisal management services to the organization’s 112 lender members.
What follows are excerpts from our interview.
Q: You didn’t have appraisal or mortgage experience when you co-founded Pendo. What brought you to the industry?
Sandman: Opportunity. Mike Peck, my co-founder, and I both came from the tech space, and throughout our years we’ve been fortunate to have seen and been a part of some major shifts and big steps forward. We’ve experienced the amazing things that can happen when you have a dedicated team focused on advancement.
When we looked at standard business practices among AMCs, we immediately identified an opportunity to elevate not only the process, but also the experience for everyone who is touched by the appraisal process, from the borrower to the appraiser to the employees working for the AMC and the lender. We weren’t – and still aren’t – looking to change the industry for the sake of changing an industry. We want to contribute. We want to improve the appraisal practice; make it more efficient, user friendly and adaptable, and ultimately, create a more inviting work environment for the people who work in this industry.
Q: A lot of people are talking about attrition among appraisers. What can the industry do about that?
Sandman: That’s going to take a concerted effort on the macro and micro levels. In the most basic of terms, combatting appraiser attrition would involve either keeping more of the appraisers we have working in the industry, attracting more appraisers to the industry, or both.
So, the question is, how do we do that? A lot has been said about lowering the barriers to entry to attract more talent. I’ve heard things like reducing the time required before someone can get work as an appraiser and allowing trainees the ability to earn while they learn. I agree. On a macro level, yes, we do need to rethink the current path to becoming a full-fledged appraiser and start making changes that will make the profession more attractive and accessible to the younger generations.
In the interim, we need to start doing something today, while those issues with training, certification and eligibility are hopefully getting sorted out. The industry could make progress if AMCs and lenders would implement some of the methods we’ve adopted here at Pendo.
At our firm, we do a lot to foster great relationships with our appraisers. A lot. And not to brag about it, but it’s worked out so well for us that I can’t help but wonder what would happen to the industry if more companies implemented some of the changes we’ve made.
Our appraisers really enjoy working with us. This is no small issue. It makes a huge difference in the service and turn times that we provide to our clients, and that ultimately translates into hard bottom line numbers for us. The truth is, we give better service to our appraisers, so we get better service in return. That allows us to give better service to our clients. In fact, recently, we even landed a new client based on appraiser referrals. I imagine there aren’t many AMCs that can say that. If appraisers were treated better both as individuals and as an industry, I imagine the profession would become more attractive to potential appraisers. Several of our appraisers have told us about contentious relationships they have experienced with other AMCs. That has to take its toll. Appraisers are the key component to the appraisal segment. If we want to solve the attrition issue, we need to prioritize enhanced relations with them.
Q: You said that having positive appraiser relationships is a key factor in providing better service to your clients. Can you explain how that works?
Sandman: Sure. As simple as it sounds, a lot of appraisers are willing to go the extra mile for us because they know we appreciate them. It’s no secret that there has been some tension between appraisers and AMCs. A lot of that tension is due to a simple lack of courtesy and appreciation. We decided to do something to change it, and we were thrilled with the results.
Every AMC experiences times when they need an appraiser to do something on a quick turn around. Maybe it’s an appraisal, maybe some corrections. I’m proud to say that when we need a special favor, we usually get it.
Our appraisers are very responsive to us. The reason for this is that we’ve cultivated relationships with them. We get to know them as people and as appraisers. When an appraiser goes above and beyond – and many of them do – we don’t let that slip by unnoticed. We let them know we appreciate them. We write thank you notes. We send cookies. We tell them – and show them – how much they’ve helped us and how grateful we are that they did.
A lot of AMCs rule through fear. Kind of a “do this or we won’t work with you” kind of mentality. We don’t use those types of old-school management techniques. At Pendo, our client success team builds relationships with our appraisers. No one is treated like a number. Our appraisers are important partners to us. Our employees know that, and so do our appraisers.
Q: As a technologist, what do you see as the future of the appraisal industry? Will technology replace the appraiser?
Sandman: I see a lot more technological advancements in the appraisal space, ranging from more analytics on the evaluation end to more customizable workflow technology, and better use of analytics for AMCs, lenders and appraisers to evaluate their partners. I also think we’re going to see more proprietary technologies for AMCs. The appraisal sector has not traditionally leveraged technology quite as well as other segments, and I think that’s about to change.
That said, I do not see technology advancing to the point of replacing the appraiser, not for the foreseeable future. Appraisers are local specialists who are experienced and trained on what to look for, according to what is relevant to certain specific areas. That’s something that technology can’t provide. Rather, I think we’ll start seeing technology that enhances the “high touch” part of the business – technologies that automate processes to free up more time for high touch interaction, or technologies that use data and analytics to provide a better high touch experience.