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What does it take to grow a company in the mortgage business? It takes vision, which can be challenging to develop for yourself when the entire mission for your part of the industry was basically hard coded into legislation enacted after the financial crash. For appraisal management companies (AMCs) stuck between lenders that would rather handle the job in-house and appraisers that would rather not work through a middleman, creating a vision that can lead to stellar growth can be very challenging. But, it’s not impossible. For a case in point, look no further than Birmingham, Mich.-based Class Appraisal.
Class has doubled the size of its business over the last 12 months, making it one of the fastest growing AMCs in the industry. Currently employing about 85 professionals, the company expects to hire another 50 additional staffers over the next six months. The firm is currently serving eight of the nation’s top 10 wholesale lenders with appraisal orders placed nationwide, among them United Wholesale Mortgage (UWM), Finance of America and Freedom Mortgage.
I spoke with Jon Tallinger (pictured above), vice president of sales and marketing for Class Appraisal and one of the company’s first employees, about what it takes to be a leader in the AMC space today and what it takes to deliver excellence along with the real estate valuation reports its managing for America’s lenders.
It’s about culture
When Tallinger started with the company in 2009 Class wasn’t an industry leader. He admits that there were a lot of lessons learned in the early days. Over time, the management team matured and began fostering a culture that went beyond just connecting lenders and appraisers. Since then, Tallinger says, every single measurable metric, across the board, has improved.
“Our current leadership has fostered a very good culture,” Tallinger said. “Our people like working here and engaging our appraisers. We have built great relationships with these appraisers.”
Class Appraisal’s culture is built on the following factors, roughly in this order: Quality, rewarding employees for what they do and removing limitations most companies build into job descriptions. As Tallinger describes it, Class has found ways to provide incentives for just about any employee who wants to go above and beyond their job description. It removes barriers and it encourages employees to do what it takes to earn more money.
Tallinger isn’t looking for every employee to hit a home run every day, the game Class is playing is measured in inches.
“Even as our volume has increased, our performance metrics, have all improved,” Tallinger said. “It's a matter of gaining all those little inches, here and there.”
A good example can be found in the company’s work assignment timelines. When a new order comes in, the company tracks every metric that relates to that order. The first thing they check is the amount of time it takes to get the order out to the right appraiser partner in the field. There is a lot of technology behind making a compliant assignment, and the job isn’t done until the appraiser accepts the work. In the beginning, an order that came in at 9:00 p.m. would take about 14 hours to get assigned. Not anymore.
Today, Class can get a job—even one that is received late at night—out to the right appraiser, on average, in about nine hours.
“Saving that five hours on the 10,000-plus reports we’re generating each month is huge,” Tallinger points out. And that, he says, hits the bottom line.
Tallinger says Class has cut back the time it takes to complete jobs in every department. He credits this to better processes, better technology—much of which the company develops itself in-house—and empowering each employee to do the best possible job.
Permission to excel
While a company’s culture will have an impact on its processes, the technology it chooses and how it approaches the business from a strategic perspective. But by far the most significant impact of corporate culture is felt by its people.
At Class Appraisal, the culture gives its team members the opportunity to find their best fit and then do their best work. The approach is making a difference in its business. One place that difference is very apparent, to management and the company’s customers, is in the quality of the product they deliver.
“The most important part of managing our business is making sure that we're tracking the quality of the product we’re delivering,” Tallinger said. “Quality control can be a monotonous job, which makes this one of the most difficult departments, especially given the extremely low tolerance for error. But with the right incentives, we humans can do things we never thought we could.”
Out of the 85 or so people employed by Class Appraisal, 22 of them work in the Quality Assurance Department. It is, according to Tallinger, one of the most important operations the company provides for its clients.
“Our quality control department is very important,” Tallinger said. “Generally, we're looking for employees here to touch about 30 to 35 appraisals per day. We track the quality of every single report. Under a new program, if the employee wants to work harder and still meets or exceeds the quality threshold, the company will reward them for doing so.”
It should come as no surprise that Class Appraisal’s QC department employs some of the most productive employees in the firm. But for every employee that performs at twice the level of a peer, there is another who produces less. Tallinger says the company culture encourages going beyond without punishing those who deliver consistent quality at a slower pace.
“We lead people to give their best,” Tallinger said. “That’s not the same as driving people to the point of making errors. We can’t afford errors and neither can our customers. Our culture gives people permission to excel without forcing them beyond their ability to do a really, really good job.”
For some, success is just a matter of finding the right fit within the organization. Tallinger tells the story of one employee, call him Bill, who worked through three departments before finding that he was perfect for the QC department. He works there today and is doing a great job.
“That’s what it’s about for us, for any organization really,” Tallinger said. “It’s finding the right fit for people, where they find something they like doing, that they can be passionate about -- and then letting people know that they're valued there.”
In effect, Class Appraisal has taken the words “it’s not my job” out of the company’s lexicon. An excuse that holds back innovation in industries all across the nation is completely absent at Class. But it goes beyond telling employees they can work as hard as they want and extends to developing the technology that allows them work smarter, too.
Tallinger says that Class Appraisal has doubled down on its commitment to building proprietary technology. Having the right tools to allow Class to connect seamlessly with its lender clients’ nationwide streamlines operations, speeds up delivery of quality reports and improves customer satisfaction. It would not have been possible for Class to grow this quickly without the right technology. According to the company, technology has been a major reason that its metrics have improved in every department.
“Today, our metrics, nationwide, are flat out the best of any company in our space,” Tallinger said. “And that’s good, because word travels really, really fast in our industry.”
In a move that would leave many management teams backing away, Class Appraisal decided to build out a dashboard that would provide detailed information about where the company was receiving orders and how Class was performing across the entire country. Then, it gave access to the dashboard to its clients.
“With our proprietary, interactive dashboard, we can show clients and prospects exactly what we’re doing, in real time,” Tallinger said. “When we send that to lenders we’re not working with yet, we can almost hear their jaws hitting the floor. They’re blown away.”
But what about existing customers? What do they think of the new way Class Appraisal is delivering real estate property valuations? Tallinger says he’s glad I asked and points me to an e-mail he received that morning from a new customer.
“‘Good morning Jonathan,’” he reads to me over the phone. “‘You all have absolutely killed things for us. I'm very pleased with the service we've received. Everyone on your staff has exceeded expectations. Thank you for living up to your name.’ That's the kind of feedback we're getting from our clients.”
Tallinger tells me that this is the kind of results it’s possible to attain with the right company culture, when you get everyone rowing the boat in the same direction. “It’s a lot of fun working here, and that’s rubbing off on our clients,” he said. “It's also rubbing off on the appraisers we're working with. It's a very exciting time here right now, especially knowing that the best is still yet to come!”
Rick Grant is NMP special features editor for National Mortgage Professional Magazine. He may be reached by e-mail at [email protected].
This article originally appeared in the September 2016 print edition of National Mortgage Professional Magazine.