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Why Don't You Know? You Are The Appraisal Expert!

by Administrator on Jul 11, 2017 Appraisal Ethics 288 Views

I often get calls from past or potential clients asking me about a specific property type or a specific area of town, they want to get some idea about the value of a property that I know absolutely nothing about.  I have found that the more that you know and tell them (in general terms) the less likely you are to get an appraisal assignment.  If they ask you about industrial properties in the Southwest and you tell them about the market, the property value range, the median value, the typical rental rate, etc. you will have put some of their issues to rest.  I have heard "I will think about ordering that appraisal and get back to you."

I'm not saying that you can't let people know that you are experienced or that you have market knowledge, I'm just saying that if you let them have too much information it may be your potential assignments undoing.

Like some other appraisers I have to move from one property type to another and sometimes I lose touch with a market segment simply because I am busy doing other property types.  I still update my property sales database so I see many sales of all types but I may not complete a multi-family residential appraisal assignment for example for a few months and then the market changes while I'm doing other property types like retail or offices.  What I'm working on is just the luck of the draw, if I get busy doing industrial properties I can't know about all of the land sales for example that have occurred on the north side of town over that last couple of months.

Yes, real estate markets / market segments can change in a relatively short period of time.  Sometimes a market has changed a little or not at all after a few months but appraisers just can't make that assumption, and you definitely don't want to communicate information about how the market was to a potential client.

So in my opinion an appraiser is better off just saying nothing, or saying that they have to do the market research and can't generalize since they also have not reviewed sales or viewed the subject property.  I have found that it's safer and more profitable to act like you have little or no market information than to volunteer what you know. 

It's my opinion that discovering property value through the analyses is just part of the appraisal process.  If you think you know the answer to the appraisal problem before you begin an assignment then something is lost.  You as the appraiser want to start with a clean slate and no assumptions or preconceived ideas.

If you keep in mind the fact that an appraiser expressing any kind of opinion, even oral, can be considered an appraisal report you will step back when the interrogations begin.  I have been quizzed by bankers and hard money lenders and all they want it to find out if they can influence you into a high or low valuation.  You don’t have to say much and they will be done with the conversation and moving on to the next appraiser on their list.

I don’t mind losing a client who comes to the table, or the phone, thinking that they can bias my opinion before I begin.  It’s just part of the appraisal business, many potential clients are searching for “low ball” or “high end” appraisal opinions for their estate valuation, lending or for litigation purposes.  It’s our job as appraisers to let them know that there really isn’t “wiggle room.”     

For more appraisal information contact Glenn J. Rigdon MA, MRICS, ASA is a Las Vegas / Henderson Nevada based appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas  (http://www.appraiserlasvegas.com), or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at http://www.linkedin.com/pub/glenn-rigdon-ma-mrics-asa/1a/30b/879/

Article source: http://www.appraisalarticles.com/General-Appraisal-Articles/General-Appraisal-Articles/Appraisal-Ethics//4658-Why-Dont-You-Know-You-Are-The-Appraisal-Expert.html

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