How to Start an Appraisal Business

Starting your own appraisal company can be fun and financially rewarding. You can work from home, set your own hours and decide how much work you want to do. One of the benefits of starting your own appraisal company is the fact that you can grow your business at your own pace. You can start out part-time, then grow to a full-time business if and when you’re ready.

Things You'll Need

• License(s)
• Office Equipment and Supplies
• Appraisal Software
• Marketing Materials
• Marketing Plan
• Laptop Computer
• Digital Camera
• Automobile

Instructions

1. Form a legal company. Your business entity can take many different forms, including a sole proprietorship, LLC, S-Corp, or C-Corp. Choose the form most suited to your needs. Contact your state for formation guidelines and regulations.

2. Develop a business plan. This will be your guide and road map to success. Put it on paper and refer to it often. Update your business plan at least once a year.

3. Set up your home office. You'll need a fax machine, laptop computer, printer, internet access, phone, and standard office supplies.

4. Get licensed. Each state has its own licensing requirements. Check with your state's commerce department or similar regulatory agency to find their specific licensing requirements.

5. Get software. Just about every client you’ll have will require their appraisal on the standardized form 1004, called the Uniform Residential Appraisal Report (URAP). Appraisal software automatically fills out the URAP and is widely available in today’s market.

6. Create your marketing materials. At the very least, you’ll need business cards, letterhead, and brochures or flyers. A website and branded email will contribute to your professional and competitive image. Make sure you highlight your strengths and professional differentiators throughout all your marketing materials.

7. Get customers. Your best source of business will be mortgage brokers, and small banks and credit unions. Real estate agents are also a good source of business. Larger companies tend to have in house appraisers, so they won’t be as open to your services.

8. Be persistent and positive. Be prepared to make a lot of phone calls and visits to your target market. Always be courteous and professional. Most of your business will come from word of mouth. Develop and maintain a solid reputation as a punctual, positive and professional partner.

Tips & Warnings

• Marketing is the key to your success. Always be looking for new clients.

• Depending on your clients’ needs, you may be doing a lot of faxing. If so, get a dedicated fax line.

• GPS will save you time. You’ll be doing a lot of driving. Printed maps can help, but with GPS you’ll never get lost.

• You won’t be hauling any big equipment, so a small car with good gas mileage will work fine and save you money.

• Mortgage brokers and real estate agents require extra attention and consistent follow up--be prepared to make many reassuring phone calls.

• Do not attempt to operate an appraisal company without all appropriate licenses.

• Always carry appropriate insurance.