Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
Where would you imagine that an attorney would focus with regard to your appraisal report and deposition? Most attorneys are only as good as their expertise in a specific area. You pick a real estate attorney for your personal injury case and while he may take your money and represent you he may not be able to do the best job for you, he just doesn’t have the experience that the “specialists” have. Yes, he may be able to work his way through the case, maybe get you a great settlement, but are you really getting the best deal for your money? How much focus there will be on the technical details of your appraisal report will likely hinge on the expertise of the opposing attorney. If they specialize in another area or areas and their in a condemnation case they are really at a disadvantage. They probably never heard of a “yellow book” and even if they hired a competent appraiser they likely still don’t know what he is doing or why. You can’t walk into someone else’s “house” and th
It’s an easy answer if you think about it, no. There are many reasons why the sale of a real property may be transacted above or below a price that it would normally have sold for. An appraiser assumes as part of their market value definition that there are willing buyers and a willing sellers and typical market conditions. If you find that a property considered for use as a “comparable” sold for substantially more than other properties there may be an atypical motivation on the part of the buyer. Thus the buyer may have paid more for a property because the buyer was trying to assemble a large site in fact they may already own the adjoining site. If a real property is sold below its expected market value, there could be atypical motivations on the part of the seller. Some sellers don’t want to wait for a typical marketing time they don’t want to wait for the right buyer to come along during a typical marketing time they just want to “cash out.” That type of motivation will
The government’s proposal to not require appraisals on loans below $ 400,000 sounds familiar to me, much like the Fannie Mae / Freddie Mac push to expand home ownership in 2005 to the not creditworthy masses. It sounds so ridiculous that you know it has to be about politics and profits and not about the safety of our banking system. I guess it’s also the latest run at solving the appraiser shortage “problem.” Not enough appraisers? It must be time to undermine the collateral that supports the banking system. Makes sense to me. Not. You don’t have to wonder for long about who benefits from a relaxation of the lending rules. It’s big banks, looking for another way to pull themselves out of their latest morass that only they could have created for themselves after years of bludgeoning their customers with outrageous fees.
Some value opinions can have an effective date of value that is in the future or as of a prospective date. Appraisals of this type are not unusual for buildings under construction because it’s important for lenders to know how much value a building will have when it’s completed. Commercial real property appraisers prefer not to step into the world of stock market financial analysts who regularly forecast stock market prices years into the future, even though most appraisers already employ discounted cash flow (DCF) models that have years of projected income streams in their Income Approaches (Yield Capitalization) portion of their appraisal reports.
The Internal Revenue Service (IRS) details their expectations for an appraisal of the fair market value (FMV) of donated property, including donated real property, in Publication 561. Appraisers must review the definitions and concerns detailed in the Publication or face the possibility of being significantly fined. Most of the FMV “problems” that the IRS lists in the Publication related to donated property are, for most appraisers, common sense in nature. The IRS discusses things like; the date of the contribution, unusual market conditions, sales price, the selection of comparable sales, future events, arm’s-length offers, the sales approach, the capitalization of income, replacement cost, business interests, predicting future earnings, property description, undivided interests and amenities.
How quickly can a parcel of vacant land change in value? I have tracked pre-development parcels of vacant land over relatively long periods of time (having been charged with appraising them over and over every 6 months or so). When the 2008 financial crisis hit Nevada commercial properties that were valued over $ 1 million an acre dropped in value like they had fallen off a cliff. During that time changes (decreases in value) were not typical of the real estate cycle and value decreases were more like skydiving off a cliff than rolling down a hill. Vacant land value increases can be just as dramatic as decreases when something important about a property or even an area is changing. Owners can be caught off-guard by changes even if they have periodic appraisals. One side of an Interstate highway for example may be significantly developed with high prices while the opposite side of the highway has little or no development and much lower values. Bridging the highway can however
The following list of appraiser business expense ratios, see the table, was compiled based on a number of independently researched data sources. No guarantees are however made by the author regarding accuracy or acceptability. The Internal Revenue Service (IRS) may allow or may not allow any of the items listed herein as deductions. The listed items are general categories into which many actual appraiser expenses fall. Of course there is also a great deal of variability in some categories like; the vehicle / travel miles category since appraisers in the city generally don’t put in the miles that the rural appraisers do, the contract labor category can vary significantly because some appraisal offices pay a number of appraisers, the legal and professional service category and the rent category since some appraisers work out of their homes.