Retrospective Appraisal Report Challenges

Appraisers are often offered real estate appraisal assignments related to probate, estate tax planning / reporting, civil litigation and condemnation that require a look back into the past.  At times the look back can be many years.  Often the appraisal is however only required to look back a year or two and for those assignments most of the data is still available.  A 2-year look back in time still requires a search that is more difficult than that required for a current market value report, but assessor sites, real estate sites and your recent appraisal work usually offer support.

Retrospective reports that have dates of value more than 2-years back in time generally take more time to complete than current reports and once you get 5-years back you really have to dig to find rent comparable and sales data.  If you are 10 years to 25 years back you may find no readily available data.  If you haven't been in the business for a very long time you may have to beg, borrow and steal as much as possible from old-timers.

Another great source for old data can be your work files.  If you have been in business for a while and your files are digital you may be able to look at the work you completed on similar property types and find relevant information.

I have completed some of these "way back" valuations.  You think the data will be easy to find but if you start looking even 10 years back the sources dry up.  Many Realtor organizations keep 2 to 5 years, some keep more but not many.  Some commercial sources like LoopNet.com keep many years of data but it's sketchy and often not complete.  Surprisingly I have found old data in reports saved by collectors and once I found data that had been saved by a library.

I don't mind paying for data that is difficult to acquire.  Current sales information can be found easily, or with some minor effort, but data that is historical evaporates from normal sources.  Is information on a sale worth $ 50 or more per comparable sale?  I guess the answer to that question has a lot to do with the purpose of the appraisal.  If it's Litigation and the details regarding the sales will be put under extreme scrutiny, then maybe the answer is yes.

Appraisal fees usually reflect the significant additional time that must be spent by an appraiser on a report beyond the time that they would have normally spent on a typical report.  Appraisers usually consider how many working hours they will need to spend in a day, a week, a month or a year on each project.  If you take assignments that pay you half of your desired rate you will have a tough time paying your bills much less making a profit.

It's also much more difficult to verify old transactions.  The parties move or they become less cooperative when you are looking back many years.  It just seems like people don't want to dredge up the past even for an appraiser.  You can tell them how important it is for you but for them it's not something they want to revisit.

As an appraiser who has been there I can tell you that you may want to wait to bid on a retrospective that has a “way back” date of value until you can gage what you are getting yourself into. 

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/Litigation-Expert-Witness/4640-Retrospective-Appraisal-Report-Challenges.html