2001 President's Message
It's no secret that the Appraisal Institute has an aging and declining membership. This is true of most major professional organizations. To survive as an organization, we must add affiliates, associates and designated members. The good news, is The Appraisal Institute has a pro-active strategic plan to lead both residential and commercial members into the future as a more consulting based services organization. If you "unbundled" an appraisal there are many valuable disciples we provide to our existing clients. "Value added services" is a clich term, but it 's what we are best at. We are fortunately in an industry that can shift with changes and move up what I call the "knowledge continuum" We used to go to courthouses, talk to contacts, research MLS & listing services and magically find data. We would merge this data into a value conclusion. It was a mystery to our clients. Now, the data costs a nickel and everyone has access to it on the Internet. The value we add now is to convert that raw data to knowledge based consulting solutions for our clients. This takes more thought, but it's also more rewarding. Data was the raw material we used to get paid for; we didn't do near as much analysis. We didn't have the tools.
We are very fortunate to be in an industry that we can shift with. New opportunities continue to open up as others close. It takes a step of faith however, to leap from our comfort zone into new territory. In the movie "Other Peoples Money" Danny DiVito states "The worst thing a company can do is get an increasing share of a decreasing market". The market for traditional appraisal services is decreasing. Proactive appraisers will retool and make something in addition to buggy whips. The buyers of traditional appraisal services are going other places for products we cannot or will not provide. Residential lenders and eventually commercial lenders are not going to have to buy as many appraisals. This is currently true of conduit lenders and REITS that control a huge amount of real estate. That's just the way it is. To go back to the "Other Peoples Money" analogy nobody needs buggy whips. We have to get over it and get on with business. Fortunately, we do have leadership and our leadership has a vision. It's in some way comforting to know that every industry has been affected by the same earthquake; the ground is shifting under everyone's feet. Every industry must change or give up. Some industries have already shifted with change. Accountants recognized that people could buy a $99 program to do their own taxes so they have offered value added service and in many cases, have offered Real Estate services on their menu.
The National AI leadership initiatives include a pro-active stance; they recognize there must be a National and indeed International outreach. To affiliate with AI, associates and members must see and believe that benefits do exist. Many view the alternative demo requirement as a dilution of the MAI designation. I in fact, felt that way also. However, after attending the National meeting last month, I have glimpsed the National organizations' focus to expand the AI to International markets. This could facilitate a huge addition to our membership and initiate a truly global perspective. Talks have been underway with Royal Chartered Surveyors to expand to Europe, as well as Asia. These markets are not as efficient in real estate transactions as America. Some changes in the "Appraisal Report" may be necessary.
The three work product report alternative will be altered to require each report to include grading requirements will be determined and published prior to a vote. These will be non-resubmittable reports. A method of making sure it is entirely the associates work product will be established. Experience and comprehensive requirements will stay the same. Many are concerned over this issue, and it will be a topic all year that I'm sure will be brought to an appropriate conclusion.
Our future business won't be based on the same business model we are all so comfortable with. Waiting by the fax machine or telephone for a request for proposals will go away. It will take thought and ingenuity, along with lots of hard work. But, necessity is the Mother of Invention. There will be room for those who will be responsible, thoughtful professionals. This group of real estate valuation and evaluation experts will seek and find opportunity and problems, develop solutions, apply those solutions and fill the need. It's a simple plan but it requires consciousness and thought. Frankly, that's the kind of professional organization I want to be involved with anyway.
We must build membership, but no one is going to join out of
pity. They will affiliate with AI in droves, like many of us did if they see
tangible benefit to membership. It's up to the entire membership to forge new
thought. To develop solutions to new real estate problems, AI is supportive and
is providing many pro-active programs like:
- Commercial database and a Web based appraisal management system
- Residential database
- Educational options with new courses & seminars, including 12 new on-line courses
- The Lum Library for research assistance
- The Wall Street initiative (to develop new products, REITS & the CMBS markets need)
- AI direct (portfolio bidding process)
- Networking opportunities at meetings and events
- E-appraiser providing Web exposure of AI member s & associates
- And the biggest reason most of us joined, the opportunity to be associated with an elite group of valuation experts and have the expertise to make more money.
The exciting International and domestic opportunities will certainly yield many valuation and evaluation problems that will require smart real estate solutions. Solutions that can be developed by enterprising valuation experts.
During my tenure as President my goals will hopefully move our Chapter along the continuum of change.
- Membership diminution must be addressed. Our declining membership has reached a critical level from a budget standpoint. National is focusing on a membership initiative and we must join in on a grass roots level.
- Either myself or a designee will recruit membership at each of the educational offerings
- We will provide membership materials and enumerate benefits of education, including the online courses.
- My goal will be to grow our Associate Membership by 35 members or about 10%
- I will encourage attendance at quarterly meetings by opening the meetings to all members and associates.
- A P.R. position will be established and charged with developing a strategic plan to both attract members and expose our organization to the market
- I will reduce delivery costs associated traditional newsletter and Chapter publications by offering this information on our Website. Each officer and candidate' guidance chair will author updates to the site quarterly as part of our meeting process. The calendar of events, budget information, and links will also be posted. Tomorrow at the Economic Seminar, we will continue to collect a more comprehensive list of e-mail addresses. We will broadcast monthly e-mail links to our Website similar to many news services.
Links can include our currently popular county website page, links to the Lum Library for educational and methodology requests and news articles.
I am excited and honored to be part of The Appraisal Institute. Many challenges face us and in the years to come, I will do my best in 2001 to face these with a proactive attitude.
Eric Belfrage, MAI, CRE