Appraisers are Skeptics

Real estate appraiser are Skeptics because they simply don’t believe most of what they hear.  They are often bombarded by biased opinions, sometimes they are even supplied with sales information that favors a certain outcome.  As I have stated before, I am open to the review of any information, supplied by biased parties or not.  It doesn’t make me less of a skeptic because I accept and review the information.   

Thus, being a skeptic as an appraiser means that I don’t just take what other people supply without doing my own research.  Well supported evidence that I find and confirm is what I base my value opinions on, and it all goes into my work file.  I am always amazed when I find that an appraiser has not put into his or her work file the results of their initial research.  When I search I put at least the summary information that displays those results.  If I’m looking at land sales and the initial results display 100 properties, I download those search results and save them.

Research is part of the appraisal process and as an appraiser I want to be able to show my client, the courts, regulators or whoever if necessary that I didn’t just pick sales without having looked at all of the recent sales in the market and submarket area.

Most clients ask me “what is my property worth?” just after I arrive at a property or they ask me that question just after I complete my inspection.  For an appraiser it’s a difficult situation, I am representing myself to be a valuation expert so why can’t I answer that simple question?  Maybe they think I don’t really know anything about the value of the property that I am appraising, that’s what they may think.

My response is usually “I don’t conclude a value without doing all of the work, it’s what I get paid for, and expressing a value opinion beforehand is not something that I do.”  Then the question usually gets reformulated to something like “well then give me a ballpark estimate, surely you can do that?”  I usually follow up by saying something about the property type like, land sales in town range from $ 1.00 per square foot to $ 40.00 per square foot, but I can’t tell where this particular property will fall in that range without completing my appraisal.

Some of the most difficult appraisals are going-concern appraisals that rely on income and expense information supplied by an owner / operator.  When I find that the supplied information is at odds with market evidence I try to take a step back and I start asking some probing questions.  Often expenses are out of line with standard industry profiles because an owner may be paying for some atypical expenses, or income from a property may be much stronger than is typical because of its superior location.   

It’s my opinion that appraisers have to be skeptics, they must basically; defer their judgments in the beginning of the appraisal process, assert nothing before they complete their work, doubt the reliability of the evidence that they uncover and form their opinions and beliefs based on what they believe to be facts. 

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/Narrative-Report-Writing/4553-Appraisers-are-Skeptics.html