Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
Appraisers are certainly familiar with blacklists, and the fact that there is always someone out there trying to find a reason to put you on one and exclude you from receiving business. It often happens because of someone else's bias against you. Often, it's a bank, appraisal management company (AMC), attorney, a government agency or an accountant that decides for one reason or another that they don't want to use you and thus no one should want to use you. It's Appraisal 101, learning about what business you can actually do versus what business exists, its two different things.
On the other side of the equation appraisers decide which assignments they want to accept based on the assignments that they are offered. Some appraisers are less discriminating about the assignments that they take than others. The choice not to "prequalify" or investigate a potential client can turn into an appraiser’s worst nightmare. Appraisers can immediately accept an assignment and soon afterward find they are dealing with the devil or one of his close relatives.
When you can’t get a dime from someone who signed an engagement letter that stated that they would you are off to a fine start. Every day that I spend doing work on an assignment with a promised payment is one less day that I can spend working with a paying customer. So I can’t afford to keep working on something without compensation, and its likely that you can’t afford to do it for long.
If there is any one give-away that your assignment is has turned the corner for the worst it's when your client lets you know that he need a specific number. He failed to mention that before you cashed the check that paid your rent but now he wants you to know that for his “deal to fly” he needs a specific result. That is a good time to put the fee that you spent all or part of on your credit card, cancel the deal and return his funds. The problem that most of us encounter however is that the client doesn’t tell you he has “needs” until after you have completed the assignment. Then he discovers that there is a big problem with your results.
I have heard of situations where the appraiser completes an assignment with emphasis given to the income approach and then discovered that the above-market rental rates exist because the tenants are really the owner using different DBA names.
Another give-away is when a potential client has development drawings or profit estimates, you get to see them, and they are not realistic. The subject property can potentially be developed and your client, the buyer, thinks there is are millions of dollars in potential profit. He explains that the appraisal just has to “hit his number” so that he can borrow enough to purchase it. If there are millions of dollars of potential profit doesn’t it occur to him that someone who has money would have just written a check for the property?
If a property has been on the market and anyone with money could have purchased in and reaped the huge rewards some time ago by buying it why would you be trying to buy it with financing? Buyers can’t really think that properties that have a potential for millions of dollars in profit are peddled on the street by their brokers? The fact is that in those rare situations the brokers buy the property, or form a partnership to buy it or the broker get one of their best customers to buy it. They never get to the open market, it just doesn’t happen.
The fact is that potential clients and sometimes actual clients always have a myriad of reasons for wanting high or low appraisal results. "I just need to file my taxes and the value has to be under $ 2 million." Potential clients make these kinds of statements to appraisers and then like there is no problem for the appraiser to just fabricate a value. "You have a lot of flexibility with regard to which comparable sales are chosen." Again, some potential clients really believe that nonsense.
Then there are those who call and want an appraiser to analyze a property like an unfinished Billion-dollar plus Las Vegas property, with or without the gaming, for a few thousand dollars. Where do these people come from? Do they really think that if it could be done by a single appraiser and that he wouldn't need months of his time to get a credible result? How much is two months or more of full-time work by an commercial appraiser worth? Anyone who is qualified to work on a property like that had better be making at least $ 10,000 to $ 15,000 a month and that’s a $ 20,000 to a $ 30,000 fee.
Once you have gone down this road of dealing with marginal clients a few times you will wish that there was an Internet website or a third-party source who you could check with before you spend any time on an assignment. If there are other appraisers who have already had a bad experience with someone, wouldn’t you want to know?
The real estate board will keep every scrap of information on you if someone simply makes a complaint but where is an appraiser’s early warning system? Wouldn’t you want to know if your latest client has been trying to influence other appraisers, making baseless complaints about them or sued one or more appraisers? Wouldn’t you want to know that before you accept his assignment? I would, and that’s why I think an Internet site or area that allows appraisers to post this information would be valuable.
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/
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