With the real estate market in the doldrums in recent years, demand for home appraisers has waned from the boom years.
Yet George K. Demopulos and George T. Panichas Jr., principals of Lincoln Appraisal and Settlement Services LLC, say their company has made double-digit gains annually through the lean times, even hiring a dozen people last year while the state’s unemployment rate steadily rose to historic heights.
How did they do it?
Although the company got its start doing the home appraisals itself, North Providence-based Lincoln Appraisal has transitioned over the years to an appraisal-management company, a firm hired by lenders or mortgage companies to find qualified appraisers in regions across the country. Then the appraisal-management company – known in the industry as an AMC – ensures the work is done on time and correctly.
And Lincoln Appraisal has only been boosted by new federal rules aimed at preventing home-appraisal fraud in the wake of the subprime meltdown. Governmental regulations prohibit lenders from choosing appraisers in mortgage deals that will be sold to government-sponsored Freddie Mac and Fannie Mae so they won’t have influence over the final valuation.
Instead, the Home Valuation Code of Conduct – which has been very unpopular in some banking circles – has required financial institutions to hire a third party to make the appraiser selection.
“That was a big help to us because we are the middle guy,” said Panichas.
Now Lincoln Appraisal has a stable of thousands of qualified appraisers it can call upon in all 50 states.
Both Panichas, Lincoln Appraisal’s chairman and CEO, and Demopulos, the company president, acknowledge AMCs aren’t favorites of many appraisers because they split fees, but they’ve attempted to counteract that by treating both the appraisers and the lenders fairly.
When the financial-market implosion in 2008 and 2009 forced the closure of hundreds of mortgage lenders and brokers, Lincoln Appraisal’s defunct clients left behind unpaid invoices totaling in the six figures for appraisals that were already completed.
Lincoln Appraisal paid the appraisers for the work just the same.
Panichas and Demopulos have come a long way since starting the business in 1998 in Demopulos’ mother’s basement.
Demopulos had been working for a national appraisal company since 1991 and wanted to branch out on his own. He joined forces with Panichas, a friend since childhood. Panichas was not an appraiser, but brought his experience as a business broker to help develop the company.
“We figured we could make it work if we could do five appraisals a week,” Demopulos said.
Pawtucket Credit Union was the first institution that agreed to put Lincoln Appraisal on its rotation of property appraisers for residential mortgages. Then Navigant Credit Union – then known as Credit Union Central Falls – and other local institutions followed.
The timing couldn’t have been better. Lincoln Appraisal launched at the dawn of the real estate boom, and soon the two owners were looking to grow business outside the state as a hedge against a cooling off of the Rhode Island real estate market that was sure to come.
They turned to the lenders and brokers they were working with to find out where the hot markets were. “We asked them where they were going [to originate mortgages], and then we followed,” Panichas said.
Soon Lincoln Appraisal was hired to find qualified appraisers in Florida, Arizona, Nevada and California. Lincoln would ensure the appraisal was done on time, and then would double check the quality of the work before the report was passed to the lender.
There are about a half-dozen large AMCs nationwide that soak up a lot of the work, and Lincoln Appraisal hopes that it will reach that level soon.
Lincoln Appraisal now has 25 employees and a new location on Mineral Spring Avenue in North Providence.
The company oversees thousands of appraisals each month. Although the majority are for home purchases, a growing percentage are related to foreclosure proceedings or lingering subprime issues.
Now Panichas and Demopulos are looking to grow the business in other ways. They say they’re close to inking a deal with a title company that will allow Lincoln Appraisal to offer more services to lender clients, such as credit checks, title searches, closing documents and floodplain checks.
Few companies offer such comprehensive services, according to Panichas.
“I think we’re a little bit ahead of the curve on this,” he said. •COMPANY PROFILE
Lincoln Appraisal and Settlement Services LLC
OWNERS: George T. Panichas Jr.,
chairman and CEO; George K. Demopulos, president
TYPE OF BUSINESS: Appraisal-
management company
LOCATION: 1057 Mineral Spring Ave., North Providence
EMPLOYEES: 25
YEAR ESTABLISHED: 1998
ANNUAL SALES: WND
