Celebrating 20 Years in Business
Did you know the average business in the United States lasts 8.5 years? By 5 years, 50% of businesses have failed. By 20 years, only 20% of businesses survive. I have persevered through cycles of growth and crash in the real estate market and am proud to have accomplished this milestone of being in business for 20 years.
My Journey Through Appraising Over the Last 20 Years
A common question I’m asked is, “how did you get into the appraisal business?” After graduating from college with a major in marketing, I obtained a job in business development with a company in New York City. I quickly learned that they wanted me to cold call all day, and I didn’t work hard in college to perform that task. I decided to look for an opportunity elsewhere, and then 9/11 happened. The job market plummeted.
I had an interest in investing in real estate, and my mother knew an appraiser in a nearby town. She said, “it may be a good idea to learn how to value real estate if you want to invest in it.” That made sense to me, so I took the necessary courses. My first job ended up being in commercial appraising. It was appraising a lot of farmland and large corporate buildings. I didn’t connect with it and lasted 8 months. I then decided to try residential.
In appraising, one needs to be an apprentice under a supervisor for a couple of years. In 2001-2003, I learned the basics of appraising, and by the end of 2003, I fulfilled my requirements and passed the exam to become licensed. The first level of licensure allows an appraiser to value properties up to one million dollars.
In 2005, after more classes and hours in the field, I passed the next level exam to become certified licensed. This licensure does not have a limit on the value to be appraised on the residential side. Once I obtained that level, I started American Realty Appraisals.
Business was going smoothly and growing for the next few years. I built relationships with loan officers from banks and mortgage companies. I would get called all the time from loan officers asking for “comp checks.” “If the comparable sales are selling in this ballpark, I’ll give you the order.” I always stated that I could never guarantee a value or hit a number. It was a royal pain to deal with them.
Then the market crashed in 2008. The type of work changed from a lot of purchases and refinancing to foreclosure work.
Many people obtained 3-year adjustable-rate mortgages at low rates, which began to climb, making the payment significantly higher.
In addition, they could not refinance because the property values started declining, turning their mortgage upside down. In 2010, the Dodd-Frank Act was passed.
“The Dodd–Frank Wall Street Reform and Consumer Protection Act is a US federal law that was passed in 2010. It was created to prevent the risky financial activities that led to the 2007–2008 financial crisis. The law aims to protect consumers and taxpayers from predatory lending practices.”
– Investopedia
This had both a positive and negative impact on my business. As a result of Dodd-Frank, Appraisal Management Companies (AMCs) formed. The AMCs are an independent third party that eliminated communication between the loan officer and appraiser.
The negative impact was that the relationships I had cultivated for the past 5 years were eliminated overnight. Plus, the AMCs take a piece of the appraisal fee.
The positive impact was that appraisers were no longer pressured by the loan officers to meet a certain value, which was a main point of Dodd-Frank. By signing up with AMCs, I was able to receive appraisal orders from various lenders, which was also positive.
In 2010, I had enough experience to team up with a tax appeal attorney and start performing tax appeals. This was a new ball game, and I got my proverbial butt kicked in the beginning. It took a few years of getting my reports scrutinized by the town assessor, town attorney, and hired appraiser to learn the craft of much stronger and more defensible appraisal reports and expert testimony. Without getting knocked down a bunch of times, I would not be as strong as an appraiser as I am today.
During the next handful of years, tax appeals were quite successful as the market depreciated and there was enough evidence to warrant a reduction in property taxes. In 2017, technology improved, and I embraced increasing my efficiency process. I switched from using a clipboard with paper and pen to an iPad with appraisal software. I also changed how I measure homes. It originally started out with a 50’ tape measure, in which I had to wind back up after every wall I measured. A big improvement came when I switched to a measuring wheel. In 2017, I changed to a laser measurer, which has Bluetooth capabilities to the iPad. This made the inspection and office time a little quicker.
In addition, once back at the office, I pay for two software services. One imports data from the MLS and tax records into my appraisal software, and the other uses market data to show support for some of the monetary adjustments I make in the report. This all allows me to turn the reports around to the client faster and make the report stronger.
In 2018, lender work slowed, and I took courses in estate work and divorce appraising. I also started networking with attorneys. Having the tax appeal and lender work experience really helped me to excel in this type of work. Fast forward a couple of years, and the pandemic hit. While the pandemic was tragic in many ways, the real estate field flourished. In 2020 and 2021, these were the busiest years of my career. Many people from the NYC and JC/Hoboken area wanted to move out to the suburbs, and interest rates were 2-3%. It was hard to keep up with how fast the market was appreciating. We had record years of 20%+ appreciation annually.
It was common to see more than 20 bids on a home. Contracts 20-30% over the list price were also common. Contracts often stated that the buyer would cover the difference between the appraised value and contract price. It was a frenzy for two years. When the pandemic ended in 2022, the market came to a screeching halt. Mortgage rates rose to 8%, and inventory dried up. In fact, inventory has been problematic in the real estate field since 2022.
One thing that came out of the pandemic was the rise of divorce. Apparently, many couples who were forced to spend significant time together on lockdown unfortunately did not work out. Having spent time and effort networking with attorneys and realtors really paid off once the pandemic ended. Networking has enabled me to remain busy with divorce, estate, pre-listing/pre-purchase, and PMI removal work. Especially because there has been a lack of business from banks and lenders, and tax appeals are hard to prove when the market has been rapidly appreciating.
Another benefit of the tax appeal experience and being hypercritical of my own work is that I have developed skills to review other appraisals. This has proved to be beneficial in multiple ways. I have appraisers on my team and review all the appraisal reports that come through my office. Now, I have divorce attorneys reach out for me to review and scrutinize the opposing side’s appraisal. I have drafted consulting letters as well as performed formal appraisal reviews.
As things slowed in the past few years with lender orders, I shifted to be able to accept more work. I expanded my coverage area and added appraisers to my team. Each appraiser specializes in a few counties. This way, they can develop geographic competency versus one appraiser trying to cover the entire state. I also accepted more challenging work. I surely would have passed on these jobs when it was so busy completing standard work during the pandemic. The positive side is that it has sharpened my skills and expanded my horizons on appraising. I had to once again step outside my comfort zone to competently value these properties.
Monthly 12-Month Inflation Rate in the United States from February 2020 to February 2024
In 2022, I teamed up with a commercial appraiser named Tom Lenahan.
He earned his MAI from the Appraisal Institute, which is the highest designation on the commercial side of appraising. Being able to consult with Tom proved extremely helpful with some of these challenging appraisals. Furthermore, we are now able to complete commercial appraisals, which has been especially helpful when someone has an estate with both residential and commercial properties.
Interesting and Challenging Appraisals in the Past Few Years
Governor Carteret’s House
I appraised a very interesting and challenging house in Bound Brook. This was the first governor of New Jersey’s house, Governor Carteret (as an English proprietary colony). Its original foundation is from 1670 and has been expanded several times. It is now 7,000 sq. ft. on 5.75 acres. Needless to say, there are no comparables in the immediate area, so I searched all of Somerset County and even some nearby towns in Middlesex County. The highest sale in Bound Brook in the past year was $785,000. This was valued well above it.
The Watcher House
You may have heard of this house in the national news. They even made a Netflix series about it. This was an interesting appraisal because I needed to determine the value incorporating the current stigma. Fortunately, I had some data to work with because this property sold in 2014 at market value. The letters arrived shortly after. They tried to sell the house in 2015 and on and off for the next four years. It ultimately sold in 2019 at a discount. I was able to formulate the market-appreciated value minus the sale price to find the percentage value of the stigma. This discount was then applied to the current market value.
Saquon Barkley’s House
If you are a football fan, I recently had the privilege of appraising Saquon Barkley’s home — the former running back for the NY Giants who signed with the Eagles and is now moving to Philadelphia. After completing the report, his management team was pleased and asked me to appraise the house he was looking to purchase in Philadelphia. Unfortunately, I am only licensed in New Jersey, so I had to turn down that job. It was fun to see a pro athlete’s massive home gym, though.
The Addams Family House
Did you know Charles Addams grew up in Westfield and based the Addams Family house on a house in that area? It’s on Elm Street, just up the road from Trader Joe’s. I didn’t appraise this house, but I appraised his friend’s house on East Dudley Ave a few years ago. On the second story of the detached garage, I took a photo of a drawing Charles created as a teen (around 1928).
Non-Buildable Waterfront Lot on Lake Hopatcong
This was one of the most challenging appraisals because this waterfront lot had a dock with a great view; however, the lot was too narrow to build a house. The chance of the town granting a variance to build was very low. What is someone willing to pay for an unbuildable waterfront lot on NJ’s largest lake? There were also no comparables of unbuildable waterfront lots. A part of this estate was a second lot behind the road of the waterfront lot. It was 2 acres that could be subdivided into 1-acre lots. After consulting with a knowledgeable local realtor, it was advised that one of the 1-acre lots should be sold together with this lot so the buyer could have direct access to the water. This would give the lot purpose and make it more valuable as a combined purchase.
Montgomery House Built in 1795 – Ice House
I enjoy seeing both historic homes as well as the latest technology in residences. Next to this house built in 1795 was a small ice house made from fieldstone. According to the realtor, who was also a historian in the area, the ceiling was made from an upside-down boat hull, which I found fascinating.
Sometimes I see fun things on an appraisal inspection. One homeowner collected vehicles from movies. This included the actual car from Ghostbusters 2. He also had replicas of two Batmobiles, a DeLorean from Back to the Future, and the Flintstones’ car. Of course, personal property is not included in the value of real estate appraisals.
This past year, I appraised a property in East Hanover that was originally built in the 1700s and rebuilt in 1935. Inside was a pre-Civil War map of New Jersey, which I found pretty interesting. Some observations:
No Union County yet, it is all Essex (the Union hadn’t won yet).
No Warren County yet, it is all Sussex.
No Passaic County yet, it is all Morris.
No Mercer County yet, it is all Hunterdon.
No Ocean County yet, it is all Monmouth.
Scotch Plains, Westfield, Elizabeth, and Springfield are zoomed in and shown to be in Essex County.
This is not the actual house; it is a similar house as the litigation is in process.
Litigation
A client reached out to me and asked if I could develop the current fair market value of a two-family house. In 2020, he told his realtor to submit an offer for this house. His realtor decided that he liked the house, did not submit my client’s offer, and submitted his own offer instead. So, my client sued his realtor, who still owns the house. It has taken the legal system this long for everything to move forward.
Over the years, I have appraised homes ranging from a $23,000 row house in Trenton to $7,000,000 houses in both Short Hills and Mendham. I’ve appraised residential land from a 2,500 sq. ft. vacant lot to a 30-acre hobby horse farm. I’ve had the honor to be an expert panelist to attorneys about tax appeals and divorce appraisals, as well as perform presentations to multiple realtor offices.
If you are in need of an appraisal or have any questions about the market, please feel free to reach out at 908-233-1337.
Testimonials
“Evan was quick to respond, accommodating with the timeframe I required, and was prompt, efficient, and simply professional. I knew I was in good hands with Evan from start to finish, and I would recommend him to anyone who is looking for quality, dependability, and accuracy.”
“Evan was calm, knowledgeable, courteous, professional, and appropriately friendly. He did his work efficiently, and his on-site work was done in a half hour as promised. He completed the final report and delivered it 4 days ahead of the stated turnaround time, which was also greatly appreciated. I would definitely recommend this business and will use them again in the future when the need arises.”
“Evan provided excellent service on a recent engagement. He was timely, responsive, and delivered a thorough report that met my family’s needs. I appreciated his professionalism and attention to detail. Highly recommend!”
“Evan delivered outstanding service during my appraisal evaluation. He was highly professional, taking the time to clearly and thoroughly explain his decisions and ensure I understood every detail. His transparency and expertise were truly commendable. I highly recommend Evan for his exceptional service!”
