Friday, September 09, 2011

5 Questions with Chip Wagner for Valuation Review Magazine

Give us an overview of your background. How did you get your start in the appraisal industry? What positions have you held? What is your current status?

Chip Wagner:  I am a third generation real estate appraiser, literally born into the industry.  I worked for my father in grammar school earning money to purchase comic books and baseball cards.  In those days, I was a jack of all trades - emptying waste baskets, copying reports, filing appraisals, transferring comparables from active to pending to closed categories in our office’s “pre-computer” system, going on appraisal inspections with my father and holding the dumb-end of the tape measure.  My favorite was assisting appraisers by drawing floor plans and plot plans on graph paper.  Eventually I was given the challenge to write appraisals, and long before licensing, I wrote my first appraisal on an old Green Hornet form before I had a driver’s license.  Real estate appraising was my summer job throughout high school and college.

Following graduation from Bradley University in 1990, I joined my father’s real estate appraisal firm and took it over in 2000 when he retired.  My grand uncle Percy Wagner, MAI, was the national president of the former American Institute of Real Estate Appraisers in 1960.  My father Alvin Wagner Jr., SRA, RM was one of the pioneers in corporate relocation appraising.  Both my father and grand uncle were always proactively involved in the appraisal industry and encouraged me to get involved.

I earned the SRA designation from the Appraisal Institute as well as the Worldwide ERC’s SCRP designation (Senior Certified Relocation Professional).  I am one of 11 appraisers in the nation who has earned the SCRP designation.  In 2011, I was inducted into the Worldwide ERC’s distinguished “Hall of Leaders.”  I have served as president of the Relocation Appraisers and Consultants (2004) and president of the Chicagoland Corporate Relocation Council (2001). 

Since 2006 I have served as the Worldwide ERC representative to The Appraisal Foundation Advisory Council (TAFAC) and currently serve as the 2011 President of the Chicago Chapter of the Appraisal Institute.

A. L. Wagner Appraisal Group is a residential fee appraisal business with a primary emphasis on corporate relocation appraisals servicing the Chicago metropolitan area.  I was one of the authors of the newly revised Worldwide ERC Summary Appraisal Report form, and developed a 7-hour continuing education seminar on Relocation Appraising which I taught throughout the Midwest and the Northeast during 2011.

Given everything the appraisal industry has gone through where do see the profession five to ten years from now? What will be the major changes? What will stay the same?

Chip Wagner:  Since I started in this profession, I have always strived to be the best that I could be, and have been proactively involved in the industry.  I had long believed that there would be a contraction of appraisers, with the best left standing after the dust settled.  I was right about the contraction, but the best have been leaving the business either through attrition, or unable to compete with the changes that have taken place.  Factors beyond our control have driven many good people out of business, and those same factors are preventing new appraisers to be attracted to the appraisal industry.

Diversification has been the “buzz word” for many years for the residential appraiser.  Those who have diversified away from lending work are surviving today.

The bottom line is real estate continues to be a significant investment for individuals, partnerships and corporations.  The appraiser is the only unbiased party that does not have a vested interest in the transfer of property or the value of the property.

Understanding how the professional appraiser will fit into the process in five or ten years from now is not clear.  Continued government intervention and their unintended consequences are reshaping the way we do business.  Those who are technologically savvy and are analysts (not form-fillers) will survive and thrive. 

What is your biggest appraisal-related challenge today? What are you doing to overcome it?

Chip Wagner:  For me, the greatest challenge I am facing today is the nuances in the marketplace.  It is more difficult than ever understanding what has happened, why it happened, and what the future trends might and/or will be.  The local markets have seen unprecedented declines in value and increases in inventory.  The distressed market competition has flooded many areas of the country, and their presence has lead to serious problems in many sub-markets across the country.  The discussion of the shadow inventory and its impact has yet to be seen.

To do my job correctly, my appraisals are taking significantly longer.  I spend an hour (or longer) per assignment, just in market analysis and comparable selection for confirmation of the data.  Understanding the terms of the sale on the comparables is critical.

Risk is obviously greater to our clients and users of appraisal services.  They are viewing our work with a microscope, leading to additional time on the back-end of the assignment, providing further clarification and sometimes even defending our work.

What has been your most unique appraisal experience? Whether it’s an experience at a property, a bizarre appraisal request or technology snafu that got you in a jam – anything that’s outside the norm.

Chip Wagner: I’ve appraised many unique residential properties, met unique people, and have had unique problems throughout my career.  It has gotten to the point after thousands and thousands of properties inspected that there are few surprises.  Historic properties, celebrity properties, and notorious properties are always a challenge yet enjoyable to do.  The ones that stand out are usually the ones where I learned something new.  But my greatest experiences as a practicing real estate appraiser are when I am instructing to fellow appraisers or clients, as I truly enjoy sharing my knowledge with others.

What advice would you give to future appraisers?

Chip Wagner:  I believe that it is more important than ever to be associated with a professional association to help you stay abreast of the rapid change our industry faces.  There are several credible ones, find the one most active in their area, one that fits their ideals and then get involved.  The appraisers that I have seen that are the most “lost” are the ones who have not invested in their future through education, diversification, and networking with peers.  Being an active member with a professional association is a good start. 

As a profession, Real Estate Appraisers must keep an open mind, be aware of the changes, and seek opportunities.  Embrace change, don’t fight it.