More than Appraisers: Advocates and Partners for Life
Appraisal Nation’s Loyalty to Clients & the Industry Stands Out
by Carole VanSickle Ellis
Michael Tedesco and his partners founded Appraisal Nation in 2007, just in time for one of the worst housing corrections in history. It might sound like a terrible beginning, but Tedesco proudly notes it was the crisis that formed the cornerstone of Appraisal Nation.
“We lived through one of the worst housing recessions in history, and we built the number-one private lending appraisal management company (AMC) through that,” the CEO of Appraisal Nation recalled. “It was our process to focus on the needs of small-to-mid-sized lenders, even the individual brokers, which at that time was relatively unheard of for AMCs. Unfortunately, when the market did crash, it proved extremely difficult [for anyone] to get business.”
Tedesco and his partners were determined, however. Relentlessly, they went door-to-door in Raleigh, North Carolina, then expanded outward across the nation. “We made it through on persistence and a little stubbornness, introducing ourselves, and building our brand at a time when most AMCs focused only on the big banks,” Tedesco recalled. Today, Appraisal Nation works with more than 3,000 lenders around the country, boasts a nationwide panel of more than 20,000 appraisers, and completes more than 250,000 appraisals per year with some of the fastest turnaround times in the country.
Appraisal Nation has also been included on the Inc. 5,000 for the past five consecutive years. Inc. editor-in-chief James Ledbetter observed of the companies included on this list, “There is no single course you can follow or investment you can take that will guarantee this kind of spectacular growth, but what they have in common is persistence and seizing opportunities.”
John Tedesco, senior vice president of business development at the company, cites Appraisal Nation’s dedication to treating each client like an “anchor client” regardless of size or location as the source of said spectacular growth. “Most appraisal companies have one or two big anchor clients, but Appraisal Nation has deliberately cultivated a diverse portfolio of small- and mid-size lenders,” he explained. “This is an approach most AMCs cannot replicate because they are not built to service clients doing just a few appraisals a month. We give our clients the room to start small if that is what they need and also give them room to grow.”
Many of the company’s clients have been with Appraisal Nation since the very beginning, often starting out with monthly activity as low as five or ten appraisals a month. Now, these companies have a monthly volume in the thousands. “Our clients have a loyalty to us because we helped them from the beginning. We always wanted to treat every client as if they were a Chase or a Wells Fargo regardless of size,” he said.
Strength in Numbers
Because Appraisal Nation has such a large volume of clients and treats each client with the same attention to detail as big banks and lenders, it is imperative that the company have a streamlined process in place for keeping the thousands of orders for appraisals in order. That is where Al Ballard, executive vice president of operations, and his team come into the picture.
Ballard likes to describe his team, which consists of three primary departments, as running a relay race for each client order. A client order begins with the placement team, whose job it is to communicate with clients and appraisers to ensure that each order is assigned to an appraiser who understands what the client needs and how the assignment will work. That is the first leg of the race. “We like to get off the starting blocks clean, fast, and flawlessly,” Ballard said, noting that the placement team consists of individuals who have usually been with the company for years and are deeply familiar with client needs and different appraisers’ abilities themselves.
“We pride ourselves in developing top talent and promoting from within. All of my team leads and managers began in entry-level positions within the company and earned their promotions through hard work, education, experience, and an innate willingness to go above and beyond for our clients,” Ballard said. “We have developed some who are now in executive positions. Operationally, I’m very proud of the team we have built.”
Once the job and the appraiser have been connected, the client service team takes the baton for the second leg of the race. This team monitors the progress of the order, a crucial role that has always been important and has become even more vital during the COVID-19 pandemic. The client service team is in charge of keeping things running smoothly, tracking inspection dates and other appointments, keeping the client up-to-date, and making sure the order is completed and delivered by the due date. The result of this intense tracking speaks for itself: Appraisal times have lengthened dramatically during the COVID-19 pandemic, but Appraisal Nation has kept their turn-times in the single digits in almost every state.
“The ‘secret’ is just streamlining the process,” explained David Roberts, senior vice president of strategic partnerships. “We are always focused on making our process more efficient for every client.”
The final leg of Ballard’s relay, the quality control team, is crucial to that ongoing refinement of the appraisal process. “They deliver the report to the client and, in the process, make sure that report meets or exceeds client expectations in quality,” Ballard said. “They are the gatekeepers, and we all take a lot of pride in these professionals.”
Interestingly, Ballard’s quality control team is made up of both appraisal experts and experts in other areas of real estate. This is deliberate, intended to keep client needs front and center rather than permitting an internal, industry focus to dominate the quality evaluation. Appraisal Nation believes a team of real estate professionals with a diverse range of expertise can best serve a client in terms of making sure the client’s needs are met and, when necessary, that expectations are managed appropriately.
“With the ongoing pandemic and the current real estate boom, it is essential that we are all on the same page when it comes to communicating about the market, the needs of our appraisers, and the needs of our clients,” Ballard said.
Taking Attention to Detail to the Next Level
One of the reasons Appraisal Nation has been so successful in working with its target client population of small- and mid-size lenders is that company leadership expects and requires a determined dedication to client success from the top down. The entire company is laser-focused on not just understanding what clients want and need, but helping clients understand how best to achieve their desired results. This often means taking time to talk with clients about how to help appraisers understand the end goal of a project, such as when a borrower is hoping to get a loan in order to convert a single-family property to a multifamily one.
“If you are adding 1,000 square feet to a property but you fail to explain how your budget applies to this project, then the appraiser does not have a visual to work with in terms of what you are going to put in the property,” Ballard explained. “If the appraiser does not have all the information, your odds of getting an appraisal that meets your needs (and gets you a loan) go down.” Appraisal Nation works closely with both appraisers and clients to make sure that appraisers are getting all the information—such as details on how a $75,000 rehab budget will be spent rather than just the final number—and that clients are providing details that will help get them to the closing table.
“Of course, it is the lender’s job to decide whether they are going to make a loan or not, but a quality appraisal helps them make the best decision,” Ballard said. “We know that if you do not provide that detailed rehab budget or lay out all the information, you are less likely to get a report that reflects the true value of what the property is going to look like when the project is complete.”
To help with this part of the communications process, Appraisal Nation has developed a number of tools to help clients clearly explain to appraisers what work will be done on a property. “When a client understands what the appraiser needs to see and how they need to see it in order to really understand the vision for the project, that is when they start to get the results they want on the lending side,” explained Bethany Thompson, senior vice president of client relations.
Thompson noted that real estate investors often have more trouble than traditional homeowners when it comes to getting appraisals and, ultimately, loans for their projects simply because not every appraiser is familiar with real estate investment strategies. This, she said, is where Appraisal Nation’s diverse population of appraisers and dedication to educating its own staff really bears fruit.
“Every real estate professional at Appraisal Nation understands the market, and our appraisers also understand how our products and tools work,” she said. “It is a great benefit to our clients because it helps them get successful results on appraisals for everything from rehabs on rentals to property conversions to flips.”
This has been particularly important during the COVID-19 pandemic, when face-to-face interactions were extremely limited and the ability to communicate clearly about a project without being on-site at the same time was crucial for lenders, borrowers, and appraisers all hoping to get deals done without in-person interactions. “We already had tools available to our clients that would help them obtain valuations even if they were not comfortable with an appraiser coming into their home,” Thompson explained. “There are so many different, unique valuations you can use, and our appraisers were already familiar with them before the pandemic. That gave our clients a huge advantage.”
One of those tools is an app called HomeLink, which enables borrowers to take inspection photos according to all key guidelines, geo-code and timestamp those photos, and then send them directly to appraisers. In states where appraisers were not classified as essential workers, this app helped keep Appraisal Nation’s appraisers working during lockdown and enabled clients to continue doing business with confidence that they still had all the information needed to make loans.
“At its root, the appraisal industry exists because we help supply a fundamental need, housing support,” Michael Tedesco observed. “If you are not doing what is needed to help your clients make good decisions about closing loans, the industry itself does not exist. Tools like HomeLink are an additional resource we developed to keep lenders lending, support brokers, and provide confidence to our clients.”
Tedesco himself was a bank manager and a loan officer before co-founding Appraisal Nation, a perspective he believes has been invaluable in building a company that sees the appraisal process from multiple perspectives. “My partner, Anthony Mattia, sees things from an appraiser’s view, whereas my partner Brian McSheehy, a 30-year veteran in the AMC space, sees things from a different perspective. My lending pedigree gives a third opinion which really allows Appraisal Nation to look at every issue with a well-rounded approach,” Tedesco explained. “It really is a huge advantage because most agencies do not have all the perspectives in leadership. We look at the process with many different sets of eyes to make certain our clients are receiving the best possible experience while maintaining compliance.”
Understanding & Advocating for the Real Estate Community
Just as a good appraisal represents a solution to the question of whether a lender should make a loan, Appraisal Nation considers itself a provider of solutions to the lending and real estate communities. Sometimes, those solutions may be as simple as filling out a form with more and better details; other times, the solutions could be creating tools and resources now available to everyone in the appraisal industry.
“When you think of a valuation company, you probably just think, ‘Oh, that is the company that does my appraisals,’ but we are so much more than that for our clients and lenders,” Michael Tedesco said proudly. “We are advocates. We are constantly looking for partnership opportunities to help each other and really give back in ways that our clients might not even think of. We provide more value than anyone else because we are always looking for solutions and, even better, we think of ourselves as a partner for life.”
Sidebar 1:
Creating Solutions for Growth, Partnerships for Life
Every investor knows the frustration of receiving an appraisal that does not reflect the true value of a property. What you might not realize, however, is that such an appraisal may have been equally frustrating for the appraiser who created it. This is such a pervasive issue throughout the real estate and appraisal industries that Appraisal Nation developed a tool specifically to help resolve the problem, and their solution is now available to every appraiser in the United States.
That solution is a simple form called a Supplemental Value Addendum (SVA) form that contains both an “as is” and an “as repaired” value. Using a rehab list, the appraiser can adjust fields in a grid format so that condition, quality, square footage, room count, etc. may be adjusted to reflect both present and future conditions.
“Typically, a private lender [working with an investor] needs to know both the value of the property now and the value of the property subject to improvements,” Appraisal Nation executive vice president of operations Al Ballard explained. “The subject-to value has historically been very hard to convey in this industry because the changes made to a property can be so dramatic.”
After developing the form, Appraisal Nation ultimately decided to make it available industrywide. “Any appraiser in the United States can use it,” Ballard said proudly. “Today, that form is inside appraisal software throughout the United States.”
Sidebar 2:
Looking Down the Pipeline into 2022 and Beyond
Despite working in an industry heavily reliant on data from the past, Appraisal Nation experts are uniquely positioned to make observations about the future. After all, this is the company that invented a form to help appraisers, investors, and lenders communicate about the value of renovations and property conversions scheduled but not yet completed.
“I think the most important thing is that interest rates can only stay so low for so long,” David Roberts, senior vice president of strategic partnerships at Appraisal Nation, said. “That means that most people who could refinance into a lower rate probably already have, but as values keep rising, more people are becoming eligible to refinance when they did not qualify even just late last year. So, things are not yet leveled out, although they are beginning to.”
Roberts predicted that the consumer side of lending will likely ease up in the coming winter due, in large part, to a lack of inventory. This could be good news for real estate investors and their lenders because the competition for appraisers’ time might ease a little. “Right now, it can be tricky on the investment side to get appraisals back quickly,” he noted, although Appraisal Nation still boasts average turnaround times of about six business days.
Bethany Thompson, senior vice president of client relations at the company, is also watching developments in the pipeline closely. “We are seeing a lot of innovation coming down the pipeline right now when it comes to how we gather data and value properties,” she said. “We are already seeing certain new products, like Appraisal Nation’s HomeLink, available for even standard mortgage refinances that are going to change how the industry operates for the better.”
