This week, the Federal Reserve lowered its benchmark interest rate by 0.5% to 4.8%, following over a year of steady increases aimed at curbing inflation. After peaking at 9.1% in mid-2022, inflation has now dropped to 2.5% in August. For the past 14 months, the rate had been held at 5.3% as part of the effort to stabilize the economy. Although the Fed doesn’t directly control long-term rates, its policies and market expectations play a crucial role in influencing them.
This is welcome news for the real estate market, and it could bring a much-needed boost for appraisers, especially those focused on lending work. The past few years have been tough for appraisers reliant on mortgage lending, with volume drying up considerably. Lower rates will increase housing affordability, likely driving more purchase transactions. Additionally, borrowers with higher interest rates will now have opportunities to refinance, especially for debt consolidation, which could result in more refinance volume.
In my business, about 20% of my work is in lending. I enjoy working with select AMCs and direct lenders because of the convenience—you’re on rotation, and the assignments land right in your inbox. What’s not to like about that? The fees are on par with private assignments, and in many cases, there’s less hassle. Submit the report, and you’re done, unless there’s a QC issue. It’s often simpler than private work.
While I welcome the increased volume that lower rates may bring, I caution fellow appraisers not to get complacent. I’ve already seen posts in forums celebrating the potential uptick in business from rate cuts, but if you’ve survived this slowdown, take it as a lesson for the rest of your career. Make changes now to ensure you never experience another dry spell like this again. The key to that is diversification into private work.
Private work includes appraisals for real estate agents (pre-listing, home measurements, cash buyers, stale listings), attorneys (estate work, date-of-death appraisals), and CPAs (cost basis appraisals). There’s also divorce and partition cases, tax appeals, guardianship, bankruptcy, immigration appraisals, and more. The opportunities are vast, and competition is lower compared to lender work. The demand is there and continues to grow.
Now is the time to start building the non-lender side of your business. Get out there—network, create a website, write a blog, set up a Google Business Page, engage in email marketing, social posting, or even paid advertising. The effort you put in now will pay dividends later.
If you’re unsure where to start, learn from other appraisers who have already diversified. Follow their blogs, join their coaching programs, or even reach out to them directly for advice. Other appraisers aren’t your competition—they’re a valuable resource. I certainly don’t claim to know everything about private work, but I do know what has worked for me and my business.
At ReferAppraisals.com, we offer micro-lessons—quick, 10-minute insights on real-world strategies. These aren’t CE courses; they’re practical lessons from actual experiences, designed to help you grow your non-lender business. You can learn about different types of non-lender assignments and the most effective ways to market and network.
My advice: Don’t forget this slowdown. Make it a priority to ensure it never happens again. Take time to diversify and market your business, and you’ll avoid the feast-or-famine cycle. Start making the necessary changes today to secure your future in this industry.
Dan Lindeman
Appraisal Referral Network
ReferAppraisals.com
