Build An AI Proof Business As An Appraiser

You know on this show we don't pull any punches. I try my best to say things that should be said, but likely won't be said by anyone else out of fear of being cancelled in some way or offending somebody. In fact, it’s true, I have offended lots of people over the years with things I say on this show and I hear from some of them via Facebook and email messages. But I also know that, if you’re offended by something I say, it’s almost always because I’ve touched a nerve that you were hoping I wouldn't touch. 

No human has the power to offend another human being, you only ever have the power to ‘be’ offended. If words or ideas make you uncomfortable, I will strongly encourage you to look inward and uncover what it is inside of you that got triggered by words or ideas. It’s likely something you’re trying to protect that doesn't want to be called out or something that needs to change, but you simply don't want to. 

We’ve been slowly creeping into an era where more and more people are being made unwillingly uncomfortable due to the speed and scale of change, not to mention the 24/7 streaming of it on social media. There are lots of things going on in the world that, if given a choice, most would choose not to experience. 

One of the things contributing to the speed and scale of change is, of course, AI (artificial intelligence), and what it’s currently doing, and what it is likely to do on a large scale to work as we know it. You're hearing it talked about a lot more for good reason. I’m talking about it more for good reason: it’s changing the way we view the world; it’s changing the way the world views you; it’s changing the way we might choose to work; and it's changing the way the work chooses us. 

Here’s a hard truth: you’re never going to outrun AI. It’s faster, cheaper, and has more data than you ever will. You’re not going to out AI the machine, so your strength must reside in how you out human the AI. There’s one thing the AI will never have, which is your lived experience, your voice, your human experience, and your human insight. This episode is about building a business that thrives because of AI, not in spite of it. It’s time to stop acting like a commodity and start becoming uncopyable.

If you have not yet begun to at least dabble with some of the AI tools that are available these days, you are behind. Chat GPT, Claude, Perplexity, Gemini; four of the most recognized and common AI tools out there at the moment and every single one of them with a free version you can start playing with. You don't have to be a master prompt engineer or developing sophisticated coding agents with AI to get an idea of the effect it's already having on the world and it’s basically in it's infancy, at least as it pertains to the average person utilizing it for their own purposes. 

I’ve talked in the last couple episode about AI and what I think it’s going to do a variety of industries, professions, and sectors of the economy, although my thoughts and feelings on all of it are completely unscientific and are based solely on my own use of AI tools over the past year or so, and, of course, lots and lots of immersion into all areas of AI thought leadership. 

While I am constantly amazed at what can be created and produced using some of the AI tools today, with only a year of use under my belt, I’m already seeing some of the cracks in what it can and can't do, at least not yet. 

However, by its very definition and nature, of all the things AI can and will be able to do at some point, one of the things it will never be is human. As much as it may want to be, and there are some definite signs in some of the testing of different AI programs that it would like to be, but, as its name implies, AI will always be artificial…and that’s the good news. 

We have a real opportunity in front of us that I hope people are catching on to. We have an opportunity, albeit a scary one, of embracing artificial intelligence and using it to enhance what we do, how we do it, and who we do it for. We also have an opportunity as AI expands and begins to reshape certain aspects of the work and business landscape to be something AI will never be, and that’s to be more human than the machine.  

I do believe AI is already reshaping how the world works and I think it will change exponentially faster as time goes on. When you just play around with some of the things it can already do, even if only moderately well right now, you start to get a sense that this is not going away and today is the worst it will ever be. I’m no soothsayer or fortune teller, but I like to think I’m fairly good at forecasting certain outcomes based on the past, the present, and the patterns we can see all around us and it's no stretch to think that AI will, at some point, be able to replace anything and everything that is repetitive, data driven, computer code based, and does not really need a human, or at least as many humans, to produce a certain result. 

But, in my opinion, therein lies the opportunity. For all the things that AI can potentially replace, it will never be more human than you. What I very strongly urge you to consider as you hear that, however, is not whether your value as an appraiser will be based on you smelling the cat pee in a house because AI will very easily help lenders build risk models and strategies that eliminate the need for a human to smell the cat pee (not to mention, houses with cat pee smell are a very small percentage of the lending scenarios). 

Where I believe the opportunity is at this very moment, and will only be enhanced as AI expands into more and more professions and industries, is to be the human authority in the process. What AI is already having an effect on is the amount of humans needed to accomplish a task. Where something took 10 people to complete last week, AI is making it so that only 2 humans are needed to complete the same task, but exponentially faster and at scale. 

So, let’s talk about some of the areas of opportunity for appraisers as we move into an increasingly AI world. 

One of the first things we started doing years ago in an effort to become recognized as the ‘go-to’ appraiser in our market was to offer what we called our ‘consulting  ladder’. Our consulting ladder is simply a range of services we offer that go beyond the form, so to speak. We do Zoom calls with clients, second opinions, divorce appraisal reviews, asset reviews, local market reports, legal case consults, and a few other proprietary services that set us apart from almost every other appraiser in our market. 

I’ve mentioned on this show in the past that we created something many years ago for our legal type appraisals called an ‘appraisal review brief’, which is simply a screen capture video of the completed appraisal whereby we highlight seven key areas of the appraisal that are most likely to be attacked by opposing counsel if an appraisal ever ends up in court. In essence, we’re telling our client what to look for, what we did, and why we did it, along with some key points that would likely be attacked if we were the attorneys for the other side. We’re essentially giving our client the other team’s attack plans before they try anything, which allows them (and us) to prepare a defense long before it's ever needed. 

Again, this was long before AI came on the scene, but we created it for similar reasons: we wanted to be the easy choice for as many people as possible when it comes to valuation services. Something as simple to us as leveraging already existing technology like screen capture software helped us get our voice, our experience, and our insights out into the world in a more compelling manner than what a boring, black and white appraisal document does. We wanted to put a human into the process in such a way that an appraisal looked and felt like the human was there all the way through to the end and beyond. 

As the process currently exists, and how the vast majority of appraisers address it, looking at a completed appraisal would not give the reader of an appraisal any indication that a human was part of the process. Appraisals look like they can and are produced by machines. It's essentially a spreadsheet with pictures, which any computer can spit out today with very minimal human input. 

If you want to create an AI proof business, you can’t try to out machine the machine, you’re going to have to be more human than the machine. That’s really bad news for many of you. I really wish this wasn't as easy as it is because then so many of you would have an excuse to keep things complicated. What AI is doing, and will only amplify moving forward, is exposing what humans aren't that good at and also what they are really good at. 

If you aren't good at being an outstanding human being and you’ve been hiding behind a process based in compliance and regulations, and a form, you’re in what we would call an ‘AI Kill Zone’, which is one of the areas of work that can fairly easily be replaced by a machine. I’m sorry friends, but much of what we all do can be done by a machine. Whether or not the machine can do it as well as you, or better than you, might be debatable at the moment. But, 95+% of what an appraiser does can be done using various technologies. 

The problem with delving into this argument is that it's tempting to bring up Zillow losing $500MM using an algorithm, and how AVMs get it wrong all the time. All of that is absolutely true, but so do the humans. Bringing up the Zillow scenario and AVMs is a particular type of glitch in logical thinking called recency bias and survivorship bias. It's a blatant focus on the most recent information carrying more weight than older data, and it's where we tend to only count the data or information that works in our favor or for our particular argument while deliberately forgetting the other parts of the data. 

Yes, Zillow lost $500MM dollars only partly because they relied an algorithm to guess at market values, but the story is a bit more nuanced than that. The algorithm and market values weren't necessarily the big flaw in their model. It was the algorithm coupled with mismanagement of repair and upgrade costs to homes; coupled with a rapidly changing market; coupled with an overly aggressive buying strategy that didn't really care that they were over-paying for properties. The algorithm was telling them that they were overpaying for homes, they didn't care. 

Not sure if you’re picking up what I’m laying down. The algorithm worked as it was supposed to. The flaw in their system with that particular iBuyer program was the humans, not the computer. If you read the story and think the algorithm got it wrong, you’ll take away a completely different lesson, and a completely misguided level of hubris that could be the cause of your very own demise. The humans in that system were constantly overriding what the algorithm was telling them because they wanted to beat their competitors and they were counting on the market growing at the same rate it had been growing historically. Again, they knew they were overpaying for homes and they didn't care. 

The humans got it wrong, the computer got it right. The humans didn't listen to the data because they were greedy. The humans took the data and made their own decisions with it gambling that they were right and the computer was wrong. And if you have ever reviewed another appraiser’s work, you’ll probably be forced to agree with me that there are a fair amount of appraisers working today that shouldn't be appraisers. Appraisers get it wrong every single day! 

What’s my point? My point is that the profession we are in relies on data and then human interpretation of that data. If the human doesn't understand the language of data, their interpretation of that data eventually becomes an opinion of value that so many of you will stick your necks out to defend without ever knowing that particular appraiser or seeing their work. You’ll defend a whole profession based on your own biases and your own desire to not have it eroded by the machines when, in fact, it could be one of the best things that ever happens to it, at least from a quality and reliability standpoint. 

Sorry friends, I know that may hurt and seem like I’ve got it in for the whole profession, but we have to be honest if we want to grow. The appraisal profession gets better with advances in technology, software, and advances in data gathering and interpretation. It may not make your little business in Lunchmeat, South Dakota any better, but the whole premise of appraising is built on data, interpretation of that data, and developing an opinion based on that data. The more sophisticated the tools available to make that happen, the more you’re freed up to apply your professional experience and local knowledge to the interpretation part. 

The better the computers get, the more the human matters. It’s that simple. Stop fighting the machines, they aren't going away. We are at an inflection point in history where the human element is going to be highlighted. The more human you are, the more your opinions are backed by data and information, the more you leverage technology on your behalf and to enhance your humanness, the more you win. Build your humanness into your processes with a consulting ladder, an appraisal review brief, a screen capture video highlighting the 5, 7, or 10 key points of your work and you win. 

The next suggestion for building an AI proof business is to partner with the enemy, so to speak. I say this partly in jest because I know many who see the advancements in AI to be the enemy, and they’re not necessarily wrong, depending on what we’re talking about. However, if your paradigm of the world is that AI is your enemy, the only good and noble thing to do is resistance against the enemy. 

However, in the instance where the downside to resistance is greater than any upside, my advice is usually to lean into the upside which, in this case, is to create AI enhanced content and be transparent about it. 

As an appraiser, I don't think there is anything wrong with utilizing AI to create better commentary, analyze large amounts of data, and utilize it to make an appraisal more credible and more reliable. After all, that's what AI is getting better and better at. Why would you resist that? 

If building an AI proof business is something you strive to do, ‘partnering’ with it to make you more efficient, more articulate, and more data capable is also just as noble and good as resistance, although one of those options has massive upside potential while the other has almost zero potential for a positive outcome. Resisting something that appears to be inevitable has almost zero upside. 

Another suggestion for building an AI proof business is to become the local go-to for teaching other real estate professionals how to practically and ethically utilize AI. It goes without saying that this angle also fulfills another one of the principles I’ve been coaching on for many years, which is to become a key person of influence in your market. 

If you’ve been looking for something interesting to teach to agents, lenders, attorneys, or CPAs, why not learn everything you can about AI LLMs and how they might enhance their own businesses through it's use? 

One of the things that AI has helped my coaching company out a lot with over the last year or so is creating and teaching our frameworks. What’s a framework, you ask? A framework is an easy way to teach a concept, an idea, or a process. It's typically presented as an acronym where each letter of the acronym represents a step in the process, and the acronym then becomes an easy way for people to remember the process. 

An example of a framework is in last week’s podcast called the V.A.L.U.E. framework™  where the letters in VALUE each stood for a principle and an action for building a killer non-lender appraisal business. The ‘V’ stand for visibility, the ‘A’ for authority, the ‘L’ stands for leads, the ‘U’ for unique or uncommon positioning, and the ‘E’ stands for experimenting and expansion. If you want to know more about that framework, go back and listen to that episode. You can also go to www.CoachBlaine.com/value and download the VALUE Framework™ cheat sheet that lays out what each letter stands for along with some things to do at each step. 

I had already come up with the framework, but AI helped me organize it, enhance it, beautify it, and then create some assets like PDFs, presentation materials, and worksheets that have in the past taken me a week or two to create on my own. That's the kind of stuff AI is pretty decent at right now. 

Use AI to come up with your own signature frameworks that help you separate yourself in a noisy and crowded marketplace. Use AI to help you develop unique acronyms for the different types of appraisal work that you might want to specialize in and then enhance it so that it becomes unique. 

The ‘U’ in the VALUE framework stands for unique positioning, which is exactly what I’m suggesting you use AI to help with. Just like we came up with the ‘ARB’, or ‘appraisal review brief’, which was our simple screen capture video product where we highlight the seven key points of the appraisal for the client. Name it, promote it, and eventually it becomes your very own thing; your signature framework and process. 

Some ideas for you could be the ‘5C Divorce Appraisal Process’ (clean, clear, credible, conflict free, and court defensible), the ‘Bulletproof Listing Prep System’, or the ‘APEX Appraisal Process’, where APEX stands for Accuracy, Proof, Evidence based, and Expert. You name it, you own it, you promote it, you become known for it, and you stand out because of it. While everyone else is just quoting a typical appraisal fee, you’re out there solving problems like a true professional and getting paid for your expertise and authority instead of your ability to fill out a form. 

With that being said, you can also use AI to help you come up with all kinds of helpful topics to teach agents and lenders who might not be as advanced in their understanding and use of some of the AI tools. Basically, use AI to defeat AI. Use what it's probably much better at than you and teach some of the people you want to have in your network how they might be able to use those tools as well. 

The next thing I might suggest doing to build an AI proof business is to develop what I will call an interpretation framework. You could name it something like the ‘LENS’ framework, which could stand for ‘logical evaluation of nuanced scenarios’, and you can create a whole workshop for agents and lenders showing how AVMs, Zillow, and AI in general quite often get it wrong when it comes to edge cases, some of the bias inherent in the data, and the nuanced scenarios we all come across on a daily basis. 

Essentially, everything I’m suggesting you do if you want to AI proof your business is to productize and packagize your business. You've heard me say many times that income is downstream from assets, and there are many forms of assets that can produce income for you. 

Most appraisers see themselves as the main asset in their business, which is fine, until it's not. When you are the main asset and income producer in your business, not only do you have massive ‘key person’ risk (what happens when you can't work?), you’re also dependent on the one resource that doesn't scale, and that’s your time. Intellectual property can be considered intellectual capital and it scales, where trading your time for dollars does not. When you come up with signature frameworks, toolkits, cheat sheets, digital products, and ‘how to’ guides, you're creating assets that can scale while you sleep. 

I’ve been saying this for longer than I’ve been coaching appraisers and it's only becoming more important in an increasingly digital world and it's this: if you aren't building some sort of local media ecosystem, not only are you not taking advantage of the technology that is making you irrelevant, you’re not taking advantage of the technology that we all literally have in our back pockets, purses, and handbags. 

Your smartphone now has more computing power than all of the NASA mainframe computers had in the 1960’s. You have more image, video, and audio power in that same device than all of the NBC production staff had in 1980. You have more editing capability than Pixar Studios had when it was founded in 1986. It is time to build your media ecosystem. 

AI will never be able to host an event, but you can. AI will never be able to shake a hand or hug a long time client, but you can. AI is getting really good at video and audio and lots of people are taking advantage of it's ability to create podcasts and YouTube content, which is the very reason to do those things yourself. Having a real, human opinion along with a teachable point of view is becoming more and more valued and valuable as AI advances. Become the face, the voice, and the opinion people seek out for the type of expertise you have. 

The last suggestion I have in this episode for building an AI proof business is to start hosting an AI enhanced mastermind group in your area. It could be open to anyone, it could be open to entrepreneurs and business owners only, or it could be solely for people in the appraisal, real estate, and/or lending professions. Whatever direction you might decide to take something like this, being the one to create it, curate some of the information and content, and then build that community puts you out in front and only enhances your reputation as an authority. 

Friends, we talk about all of this stuff much deeper in the Appraiser Increase Academy, which is a growing community of like-minded appraisers absolutely hell bent on building very busy and extremely profitable appraisal businesses. If you're tired of doing it all alone and know just how important it is to be surrounded by people potentially doing more, what are you waiting for?

You can try the AIA out completely risk free for a full month to see if there is something valuable there for you. One idea could skyrocket your income. One tip or strategy could add 4 or 5 more zeros to your personal income. For less than $1 per day, if you get one idea, strategy, or mindset shift that adds even $10,000 to your bank account, what is stopping you from making that investment. Just go to www.coachblaine.com/freemonth and give it a try.