You can stress your upside even in a down market

John D. McIntyre, senior vice president and chief residential appraiser, The William Fall Group

As published in Scotsman Guide's Residential Edition, May 2010.

Many in the real estate finance industry have been asking themselves where the good times have gone. The residential mortgage market has not completely returned, and the commercial market is showing continued signs of stress. So what can you do to increase your market share and build your reputation in this upside-down market?

You can start by focusing on three areas: ensuring proper valuation-data analysis, marketing your closing ratios and helping investors.

The few deals that are coming together today are challenging to navigate through initial approval, the appraisal process and underwriting. With distressed properties accounting for 35 percent of all existing-home sales this past February, according to the most recent National Association of Realtors data as of press time, appraisal reports often will continue to reflect distressed-market conditions. Lenders that use automated-valuation-model data to review appraisals will be concerned about these low-price properties in the subject market area.

Make sure you know the process to rebut appraiser data or underwriting data if you feel they place too much emphasis on distressed sales or market conditions. Well-kept subject properties often should not be compared to real estate owned properties in mostly poor condition. Make your point known and demand proper analysis by all parties.

Another way to increase your market share is to show your expertise by marketing your percentage of successful loan closings. You can increase your closing-success rate by taking extra steps upfront to qualify your borrowers at origination. This can help avoid the hurdles in today’s underwriting environment. Ask borrowers about their properties to uncover any condition or atypical issues before they pop up in underwriting. A strong closing percentage can show your contacts you have the experience necessary to close their loans.

Investors are another huge opportunity for drumming up additional business. According to the National Association of Realtors, investors accounted for 19 percent of transactions this past February, up from 17 percent the month prior.

Get to know the investors in your market area. You can connect with investors through Realtors of their homes for sale.

Most investors will be purchasing their inventory with cash. But you can assist investors when they complete the renovations of their flip properties and need someone to finance the subsequent buyers of those properties.

Buyers purchasing renovated homes in good condition tend to brag about all parties that helped them get their new residence. Get on board and enjoy great word-of-mouth advertising.

If you plug into the market segments that are still moving and focus on these three areas, you will remain busy even while the market is slow. And when the market is back to normal, you will be positioned to be the expert that all real estate players seek for mortgage advice. 

John D. McIntyre, SRA, is a senior vice president and the chief residential appraiser of The William Fall Group, headquartered in Toledo, Ohio, with regional offices in 11 states and 33 markets. McIntyre is a graduate of The University of Toledo; a certified residential appraiser in Kentucky, Michigan and Ohio; and a designated member of the Appraisal Institute's Cardinal Ohio Chapter. Reach him at jmcintyre@williamfallgroup.com or (419) 255-9171, ext. 254, or via williamfallgroup.com.