TAKE THAT, FANNIE MAE!

We’re in very interesting times, friends. The whole world is in flux on a variety of fronts and it would seem that one of those fronts is the world of real estate. Realtors, lenders, appraisers, title, it’s all in flux here in March of 2023. The news from Fannie Mae recently that full appraisals will no longer be the default seems to have rocked the real estate world, and especially the appraiser community. Why they’re so surprised at this news, I completely understand, although it’s probably not for the reasons you’re thinking. Appraisers have had lots of forewarning over the years that progress will not be stopped on trying to make the whole process of buying and financing real estate more streamlined, easier, faster, and with fewer hassles. Why the majority of appraisers are shocked at this new initiative by Fannie Mae to waive the appraisal process on certain types of loans says more about their states of mind than it does about the reasons behind the changes.

A fundamental aspect of human nature is to always be on the search for homeostasis, or stability on the inside when there is perceived instability on the outside. This need for stability drives all of us to seeking the comfortable, the familiar, and the known. Habits are the byproduct of doing something a certain way, getting a result, and then doing that thing again and again until the neurons that are firing together eventually wire together and a habit is born. The habit allows us to create a shortcut in our brains so that decision making is shortened or eliminated altogether allowing our brain cells to be used for other tasks. 

Appraisers are, for the most part, shocked at Fannie Mae’s recent announcement for two primary reasons: their attitude of entitlement and their deep need for homeostasis. Entitlement in this instance means that somebody believes it is their right to be entitled to something. Appraisers believe it is their right to do an appraisal on every home being sold or refinanced in their markets. It’s almost as if there is an attitude amongst appraisers, and this attitude exists among Realtors to a degree as well, that they are a national utility and they have some kind of monopoly on the choices people have available to them to make their own decisions about how they spend their money. This attitude of entitlement has caused a lot of mental and emotional suffering that simply does no good.

What this entitlement attitude has also caused is a serious lack of growth and evolution, not only of the industry, but of individuals and their businesses. Let’s try to address this part first before we move on to some of the tips I have for dealing with these crazy times in this episode. The bottom line is that none of us is entitled to anything in business, ever. We’re not entitled to a certain number of orders, whether or not someone has to do business with us, how much we think we should be paid, how we’re treated, or whether or not we’re still in business tomorrow. Just as I’m not guaranteed to be alive tomorrow, none of us is guaranteed an income, a relationship, or a thriving business. The sooner you rid yourself of this horrible mind and personality virus, the better off you will be, the better off your business will be, and the more well off your bank account will likely be. The only thing this attitude of entitlement guarantees for you is emotional suffering and instability, not to mention a great loss of time screaming into the wind about things you have little control over.

Just go on to any of the most common social media watering holes for real estate appraisers and all you see is an orgy of entitlement and wailing about betraying the public trust and how they can’t wait for everyone to be screwed when the market changes and all the blasphemers are exposed for the horrible crime of not getting an appraisal.

Friends, we’re not entitled to anything in life or business, beyond what our fundamental and human rights might be within a society. The quicker you come to this realization, the quicker you’re able to adapt to changes and see opportunity in change. I don’t call out the attitude of entitlement as a slander, I call it out as somebody truly interested in your survival and growth. I confront entitlement as a business coach all the time as it’s one of the first things we often have to deal with because, until that personality trait is changed, almost nothing else can be changed. When somebody believes in their core that they’re entitled to a certain kind of business, or a certain amount, disappointment is always the end result. 

As appraisers, we’ve never been entitled to the appraisal orders we’ve received from banks over the years. We’ve always served at the pleasure of the market of buyers of appraisal services. You just happened to start your appraisal business because somebody in your market just happened to be paying for that product or service and you figured you could do it better than the company down the street. Why not step into that flow of business and take some of it from your competitors and earn some money in the process? I don’t blame you for thinking that way, that’s how most businesses start.

However, the gas station who believes they’re entitled to your business is an unhappy one, and probably one that does nothing different from their competitors to earn your business. The grocery store that believes they’re entitled to all of your grocery money simply for existing is likely one with no competitive drive or strategy. When you believe you’re entitled to something, you tend to not innovate, you tend to not go above and beyond, you tend to not try to differentiate yourself, and you tend to not think it will ever end. We seem to be seeing the natural end result of an entitlement attitude and I have to tell you how excited I am to be in this business at this point in time.

I’m excited to be here at this point in time because it’s signaling a few important things. One, those with the entitlement attitude are likely on their way out of this industry. It may take a bit, but they’re moving closer to the door. No industry needs that in their ranks as the attitude can spoil the whole bunch, especially the new entrants to an industry. If the new entrants come to believe that entitlement is the right attitude to have, well then, they either leave before they really get started, or you’ve just inspired another unhappy appraiser to start barking on Facebook about all that’s wrong with the world and everyone else around them. The quicker we get rid of the entitlement attitude in this industry, the quicker we change the perception of appraisers in the eyes of the market. 

By the way, a little side note, all of you wailing about the promoting the public trust, get over yourselves. It’s a sickening form of virtue signaling of just how much you care about something you’ve likely never cared about previously until it serves an entitlement attitude. There’s not one person listening to this show that wakes up in the morning excited to go out and uphold or promote the public trust. That’s just something that’s told to you when you first go through licensing classes and then you hear it every now and then from upset people when their entitlement attitude gets stung. Nobody got into this business to promote the public trust. You got into this business for selfish reasons. You heard it was a good business to make a living in and, so, why not give it a try. When something is taken off the table that was previously available to you, the best you have is to scream at quasi-government organizations about promoting the public trust? How boring and uncreative! 

If you’ve ever reviewed another appraiser’s work, you know that almost no appraiser even knows what it means to uphold or promote the public trust. If they did, there would be a lot more trust from the public around what good appraisers do. From what I’ve seen reviewing appraisals in my own business over the last 20 years, as well as working for a larger company over the past year or so, appraisers have a fundamental misunderstanding of what it truly means to promote the public trust. I’ve been reviewing appraisals for most of my career as an appraiser and I can tell you with full confidence that the appraisal profession has earned the hate it receives. There is, quite simply, a ton of extremely poor-quality appraisal work out there that does nothing to promote the public trust. Not to mention the attitudes of a large swath of appraisers toward their clients and how that has done nothing in the effort to promote the public trust.

If you want to promote the public trust, you have to be worthy of trust. If you want to be worthy of someone’s trust, you have to be authentic and capable of articulating your opinions in a friendly and considerate manner, as if there could also be other opinions allowed into the conversation. That tends not to be what appraisers do. Appraisers get paid to give their opinions and, therefore, their opinion must be the only correct one when often times it’s not.

I love it when somebody complains on a social forum about a revision request or a criticism about their work from a client and all the appraisers will come together to bad mouth the client and the complaint without ever considering if maybe the client was right, and the appraiser or that appraisal deserved the criticism. The only time you really ever see appraisers coming together to agree on something is when they’re bashing a client over something instead of questioning why the appraiser is even posting in the first place. Have you seen other appraiser’s work? Have you reviewed another appraiser’s appraisal before? Have you seen some of the conversations on social media forums where it’s quite obvious the vast majority of the people posting answers have little clue what they’re doing or talking about?

The default position shouldn’t be that the appraiser is always right, and the client is always wrong. Yes, there are a lot of abusive clients out there. We get it, dealing with AMCs can sometimes suck. Yes, the automated systems we’re dealing with today often issue revision requests because the computer doesn’t read the report and the comment they’re looking for is already in the report. There are lots of cons to almost every business and those are just a few of the ones in the appraisal business. But there is a reality to being in business and it’s that you either adapt to the way things are and make the most from the opportunities, or you whine, complain, and suffer emotionally while others swoop in and eat your lunch. How do you want it? Simple? Easy? no struggle? nobody questioning your opinion? nobody questioning your work? Everything done your way? For many of you, you’ve had it that way for a long time and you complained back then too!

This attitude of entitlement has led to some of the weakest and least capable among us, so it’s no wonder that the world is changing around you and you didn’t notice. There have been signs of change every single year I have been in this business, which is going on 22 years at this point. However, I was in the mortgage business before that, and the real estate sales side of the house for years before that. If you think real estate sales and lending was the same 30 years ago as it is today, you’re simply mis or uninformed. Nothing stays the same! The only constant is change! All of those industries have been in a constant state of change since the very first day I got into them 30 years ago. 

Am I co-signing or agreeing with Fannie Mae’s decisions to move forward with their appraisal modernization plan? Well, for those of you ready to jump down my throat and start exclaiming that I’m part of the problem, I’ll share my thoughts with you about this, and here they are in three words: I don’t care. That’s right, friends, I don’t care what they do, I only care about how I’m going to respond to it, which I started doing 10 years ago, by the way. I don’t care what they do because I have no control over what they do, so why would I waste even one second of my emotional energy fretting about it. I have no control over what the car in front of me on the highway decides to do so why get upset when he or she decides to cut me off or do something erratic? Save that emotional energy and brain power for reacting and responding. In fact, the only way somebody can cut you off while driving is when you’re driving too close. If you drive defensively with multiple car lengths between you and the car in front, now it’s not a cutting off scenario, it’s merely a lane change scenario and you get to your destination safely and unperturbed. 

Friends, we all have options available to us when we’re calm, cool, collected, and ready to rock. If you are wasting your time worrying, whining, or wailing instead of winning, you’re simply wasting your valuable time and life energy. There are going to be opportunities in the changes for those with eyes and mindsets to see them. In fact, I can tell you one opportunity that has already come up since this announcement last week. Because I give so many talks and workshops to Realtors and lenders in my market, some of them have been calling to ask what it will mean for their clients. We’ve already seen what one of the benefits is going to be, and that’s that we will be getting a ton more private orders from agents and buyers on deals that qualify for a waiver or value verification. More orders from buyers who still want an appraisal on the home they’re buying, except now they’re paying us cash up front, the report will be done on a non-lending form without all the hassles of using the Fannie Mae forms, no revision requests, no underwriter scrutiny, no computers missing comments and questioning comps, and a potential new referral source and 5-star Google review. 

That’s just one of the great opportunities I see from this change. There are several others we’re seeing and optimizing for going forward. You see, I don’t have to like or agree with what’s going on, I just have to decide what I can do about it and one of those options for me is not to wail about it on social media. I’m not going to stomp my feet and fall on the floor like a 3-year-old throwing a tantrum. If you don’t like what you’re seeing, cool, leave the industry and find something you like better. Life is short and chaotic, might as well make the most of your time here and try to enjoy what’s in front of you. If you didn’t have the wherewithal to look up from your desk for 5 minutes to see what was coming down the pike, that’s simply on you. If you’re the CEO of your company, your job is to constantly assess your strengths, weaknesses, the threats to your business and your livelihood, and your opportunities. Heck, if you’ve been listening to me for the five years I’ve been putting out weekly content, you’ve at least had one person yelling at you that things are going to change, and here it is! 

We are living in times of rapid change in almost every area of our lives. I’ve talked in prior episodes about the number of processors on a computer chip in the 1970s versus today so I won’t bore you with that info again, just know that its unbelievably exponential growth. Just look around you at the technology that we all take for granted. In 15 short years since the iPhone was invented, carrying the power of a supercomputer in your pocket is a given. We don’t even think twice about the fact that the same power in the little device took up three whole rooms at NASA in the 60’s. The amount of data flying through the air at this very moment is astounding and was unthinkable even 10 years ago. What used to be done with a clunky tape measure and a clip board is now done with a laser and that same cell phone in real time. In a few short months, in fact, it will all be done with one device since Apple announced last year that they’ve already built into the newer IPhones the ability to measure and create floor plans with Lidar.

If you want to lessen the pain and suffering of change, you have to first accept that change is the only constant in life. Right after acceptance comes the celebration. When you can celebrate how far we’ve come in a few relatively short years, you can see opportunity all around. Just look at how easy it is to book air travel on your cell phone. I meet with people from all around the world on a daily basis via video in real time with no lag or interruption thanks to progress. I can buy stocks, bonds, mutual funds, and crypto in real time on my phone in 5 seconds. I have the capability to trade like a professional stock trader in real time on my cell phone, which is something people used to get paid to do just 20 years ago. Now I can make the equivalent of that floor traders’ income myself by doing what he used to do for a fee. You can now sign contracts on your phone, share photos with the person next to you with just a tap, talk to somebody a world away in real time because a digitized signal is sent from your phone up to somewhere between 12,000 and 22,000 miles into space to a satellite, which then sends it 5000 miles away to Poland, or Germany, or Japan literally in milliseconds, and we’re crying about an organization wanting to use data to make different decisions? Like it or not, friends, but change is not slowing down for you because you’re upset about it. 

Whether or not I’m happy or unhappy about it plays no role whatsoever in how I plan to respond to the changes and, rest assured, I will be taking advantage on a variety of fronts. If you don’t want to take part, don’t take part. However, I would strongly recommend you start looking at where the opportunity exists in all of this and how you will adapt your business and lifestyle to make the most of it. After accepting and celebrating progress and change, I recommend using this opportunity to eliminate old and archaic practices and systems that may have served you years ago, but simply aren’t going to get you to the next level. What got you here, won’t get you there. 

After eliminating all of your outdated processes and systems, it’s time to start stretching and getting flexible. Yes, I’m referring to your physical body as much as I’m referring to your mindset. As we age, not only do we lose lean muscle mass, we also lose flexibility. Our lack of physical flexibility leads to a reduction in mental and emotional flexibility. The less flexible you are mentally and emotionally, the more likely you are to freeze in fear when something threatens your comfort and familiarity with your surroundings. The more flexible you are mentally and emotionally, the better you are at seeing and seizing on opportunities. Some of the greatest business success stories come out of pivots when something wasn’t working or when change forced them to find a better or different way. 

I’ve used this phrase ever since I heard it years ago and it applies in this situation: sometimes you’re losing so slowly, you think you’re winning. Many of you have been losing ground slowly over the years, yet thought you were the champ. There is still time to adapt and create opportunity for those with a flexible mindset and the emotional strength to undertake the challenge. Seth Godin said that ‘Its war that makes generals’, which is a way to say that it’s the challenges and struggles in life that makes us strong and give us opportunity. The great thing is that we always get to choose how we’re going to respond to the change. We don’t always get to dictate where or when the fight will occur, we only get to dictate how we will react and respond to it. We also know that people often won’t change until something painful makes them change. If this is the pain you need to make positive change, bless it, don’t blame it.

Whether the change means it’s time to move on to something else, or the change means it’s time to adapt and create something even better, you get to decide. If the change means it’s time to diversify your business into another area, don’t wait, do it now! ‘But Blaine, that’s what everyone is going to do now!’ Again, an entitlement attitude making you weak and ineffective. Are you saying you’ll only go into areas where there is no competition? If so, what have you been doing for the past 10 or 20 years? You’ve been competing against everyone else offering what you offer. Yes, lots of people will start going after the non-lender business, but that doesn’t mean there’s no opportunity there, it just means you’re going to have to do some work and be the best option for people. If you’re afraid of that kind of effort, your path is clear: get out! This industry needs lots of fresh energy and new mindsets going forward. If yours isn’t up for the challenge in changing and adapting, it might be time to find something else.

If you are looking to diversify your appraisal business, I’ve recorded an hour and twenty-minute video training free for you as a listener of the show. You can download it at www.coachblaine.com/diversify if that’s something you’re thinking of doing. If you want to be around people who think about opportunity and growth, instead of whining and complaining, it might be time to join one of our coaching communities. www.Coachblaine.com, see if our level 1 community is for you, or maybe you want to step it up and become part of one of our black belt teams. What I will tell you now so that you’re not disappointed later, something I learned a long time ago is that if you want to be around people who think bigger than you, you always have to pay for it in some way. Whether that’s with your dollars, your time, or some other resource, if you’re looking for real growth for free, best of luck! Anything of real value will always cost you something. You must invest in your growth if you want to get some value from it. If you’re ready to invest in your growth, you know where to find us. Until then, and until next week, I’m out…