Appraisal Articles 2018 Free Appraisal Articles for Appraisers and the Public
Do some real estate agents / brokers have unreasonable appraisal expectations? If the agent / broker starts your conversation by saying “I already have an appraisal but it’s too high” or they say “it’s too low” you are headed for problems. My last assignment the agent had a high appraisal, he didn’t disclose the value to me and I didn’t ask, but he couldn’t put the deal together so called me and asked for another appraisal. My appraisal was “too low” for him so he asked his money back. I have refunded appraisal fees, not many over 40 years, but if there is a valid reason I will consider it. The value being “too low” is not a valid reason.
The following graphic, based on Greater Las Vegas Association of Realtor data, says it all. The number of sales (in purple) are falling while the average price of a home (in green) is rising. As I discussed in a previous article this change in market conditions is playing havoc with the market and it has since 2015. For sellers, they want to increase the sales price of their homes in keeping with the trend. For buyers they are having to bid higher and higher to purchase the home that they want.
The initial reaction of most appraisers to that comment is to ask “are you buying the real property, the business entity or both?” It’s amazing when at times you discover that a buyer doesn’t even know what he or she is wanting or trying to buy. For appraisers the assignment is dramatically different if it’s just a real property appraisal versus a business appraisal that includes the real property. Most qualified real property appraisers wouldn’t have a problem completing an appraisal of the real property. If the party needs a business-only appraisal most real property appraisers would pass the client along to someone who appraises businesses. An assignment can however swerve quickly if it has to include both the real property and intangible assets like licenses and business income and it’s then described by the client as a “going-concern” appraisal including the real property. That usually means that it’s not just a real property appraisal that’s needed, it’s real property
Downtown Las Vegas has been adding a significant number of apartment units and condo units over the last few years and this year (2018) it’s adding several hundred new units due to the construction of properties like; 901 N. Fremont Street, 353 E. Bonneville Avenue, 1501 S. 3rd Street and others. While the jury is still out, early reports indicate that the apartment / condo units that have been on the market are finding a strong market and units are being absorbed even though the new properties have relatively high asking prices and rental rates. Hi-Rise condos, many of which are just off the Las Vegas Strip, still create a market on their own that is strongly influenced by national and international visitors to Las Vegas while Downtown demand has more to do with locals. That’s why hi-rise condo prices on and near the Las Vegas Strip generally fall between $ 220 per SF of gross living area (GLA) and $ 700 per SF GLA, some with significant monthly fees.