Appraisers' Free Forum

Edd Gillespie · by **Edd Gillespie** on Sat Apr 12, 2008 10:53 am

The wreck n the context we are dealing with happens right here, "it doesn't appear to be presented in a professional manner."

Can we get a consensus on what that is? If so the cross examining attorney can go suck eggs. However, I hazard a guess we will never agree about what constitutes an acceptable "professional presentation" of a form appraisal or for that matter any apraisal what so ever. Therefore, it should not be made a criteria of quality in review.

So far as I know "it doesn't appear to be presented in a professional manner" is in the same box of tricks as "common sense." Everybody knows what it is, but can't describe it.

Otis · by **Otis** on Sat Apr 12, 2008 11:03 am

Edd Gillespie wrote:Everybody knows what it is, but can't describe it.

Uh Edd. Clinton knows what "it" is and can describe "it". :lol:

Edd Gillespie · by **Edd Gillespie** on Sat Apr 12, 2008 11:56 am

Let's keep it on topic or move it to the battlfield, Otis. This wasn't about Clinton or anything political until now. I thought it was a pretty good discussion of recurring issue. That of unfounded reviewer and underwriter preferences.

Jim Plante · by **Jim Plante** on Sat Apr 12, 2008 12:02 pm

But Edd, their preferences aren't unfounded. They're just preferences. If I were writing to WM's underwriter friend, I'd keep it strictly formal and factual. Same for Joanne. But I might use less formal language for a private client, estate, or divorce work where untrained people will be relying on the report.

What I've concluded from this discussion is the same as your own conclusion: Write to your audience. (What a concept!) The author of the report snip that I posted will be advised of this (and I may copy the thread to him.) But it won't be couched as a need for correction. Just advice, and the opinions of some damned good professionals. Thanks folks.

Stone · by **Stone** on Sat Apr 12, 2008 1:07 pm

Otis wrote:
Jim Plante wrote:Otis, something else just occurred to me. Saying "I don't like that house" is an indication of personal bias. What if you were on the witness stand with an otherwise perfect report. Do you think a good cross-counsel could use that "appearance of bias" to destroy your credibility?

That little thought makes ML's phrasing much more attractive.
You know as well as I do that any good attorney can tear down a defense or presentation in short order. However, I do believe that the use of the phrase the way you worded would just open the door to the attorney and get more mud slung on to a possible credible appraisal.
Stone wrote:The appraiser I'm referencing takes the reader through his thought process, and describes the subject and sales, better than most. But, if I hadn't read this particular appraiser's work, I probably would have a different take on that type of style. As it is, this is someone I know personally and call frequently when I have trouble or need assistance. Because I know him and respect his work to the degree I do, I got past it pretty quickly. That might not have been the case if it was simply some anonymous appraiser.

It is certainly more accepted, and I would think it is easier to appear to be a D3P, with a more formal writing style.
I'm not saying it's wrong Stone. Just that it doesn't appear to be presented in a professional manner. I'm sure the person you're referencing is more than likely writing narrative reports. In those cases, I can see where such an approach would work. But in form work, it tends to present a less than D3P appearance, IMO.

This seems to be a consistent topic that is brought up somewhat regularly. I don't think there is one correct way. But I do think the appearance of the report by a third party reader might want to be considered by the writer. Does the report sound as if it was prepared by a D3P or someone with a bias?

I get that. As I noted, if this hadn't been someone who I knew was as knowledgeable and good as he is, I very likely would have a different opinion on first read. Even knowing that I still found it oddly conversational. It doesn't, however, sound like it is biased when one gets past the style. It isn't mine, though, and it isn't something I intend to change to.

Edd Gillespie · by **Edd Gillespie** on Sat Apr 12, 2008 2:26 pm

Jim Plante wrote:But Edd, their preferences aren't unfounded. They're just preferences.

That is a pretty good observation and is probably the reason they should be aware of how and when they are expressed. They are every bit as personal as the other guy's style. I have little doubt that he would find fault with their manner of expression as well.

Edd Gillespie · by **Edd Gillespie** on Sat Apr 12, 2008 2:32 pm

Jim Plante wrote:What I've concluded from this discussion is the same as your own conclusion: Write to your audience. (What a concept!)

Piece of cake if they let you know what they want before you start. This guy may need to be disqualified from completing assignments for the inflexible if he can't change his style.

Chris H · by **Chris H** on Sat Apr 12, 2008 3:06 pm

OK lets keep this going for a little weekend exercise.

Other Amenities: The subject has a metal-sided workshop on a slab, with an improvised roll-up door. How big is this workshop and does it have electrical power? Is it for storage of equipment typically found on small acreage farms? In my market they do have at least minimal value for storage of tillers, mowers, ATV's, snowmobiles, tack shed, etc. It also has some old farm fencing which might be valued in use, but I can show no market preference for farm fencing, nor any evidence that a buyer will pay more for a property that has it. What is "old farm fencing", barbed wire, cedar posts, 2x4 slats? What's its current functional use? There is also a small pond on the property which the owner said he just finished building. Again I ask whats its functional use, why was it built, is it a catch basin for excess water drainage? It looks like a mud hole at present. Really? I wonder what he would think of my garden area that just had the final snow melt off from the winter weather?It is far enough away from the main house not to detract from the house's value, and it will look better when the grass gets established on the banks this summer. So will my yard when the grass starts to green up again, it all looks kinda dead right now. I attribute no value to the pond (ugly) or to the fence (old) because of a lack of market or anecdotal evidence to support an adjustment. I don't think the appraiser like the subject property very much and maybe this whole paragraph should be in the functional obsolesces section.

Sale #1 has a similar workshop, and receives no adjustment.

Sale #2 has a small utility building and a swimming pool with a wood privacy fence. Market studies performed for other appraisals indicate that small swimming pools contribute only about $5,000 to value. This area has a lot of deciduous trees; in the fall, all the leaves head for the nearest swimming pool. That is a ridiculous child like statement that detracts from the professional expectation of most clients. Experienced owners dislike swimming pools unless they're moving here from Florida or California, and don't know about our trained trees. Obviously the appraiser has never seen or heard of a pool cover! Many local owners see pools as a liability issue as well. Not if your a buyer looking to buy a home with a pool, it's a completely different market mentality. I agree they may not add a great deal of value in some areas of the country because of there limited functional use season but to "assume" it because of leaves is just stupid reasoning. The -$5,000 adjustment is based on market studies, my judgment, and input from realty agents.

Sale #3 has only a 24' x 38' concrete slab, which is used as extra parking at present. It appears to me that this slab will one day be enclosed as a garage or carport, but right now it's just a slab. Why not just call it what it is, a parking pad? The subject's amenities contribute about $5,000 more in value in my opinion. A $5,000 parking pad? Cost of a 950 square foot parking pad new is about $5,000. And that's all this adjustment is based on—appraiser's judgment. There is no market evidence to support it or to prove me wrong. I don't think a buyer would pay significantly more to have a concrete slab in his yard; the subject's workshop, fence, and pond contribute about $5,000 to its value, so calling this sale $5,000 inferior is as close as I can come until more market evidence is available.

Reconciliation of the Sales:
Sale #1 is a fair-quality house that looks like it was built by someone who couldn't find a property to flip. Corners have been cut everywhere that's visible, so I assume that corners may have been cut in the structure and foundation as well. I don't like this house, and don't consider it a very reliable indicator of the subject's value. Sale #2 is a solid house in a good neighborhood. It has been totally remodeled on the inside, and the exterior is very well maintained. Its age and location, however, keep it from being a primary indicator of value. Sale #3 provides a house that is most like the subject in quality and finish. It's not as well situated as the subject (further from town), but offers the privacy and land area that many rural buyers seek. Cost of land situated further from town is what? Is the land value the same? I place most emphasis on Sale #3, with support from Sale #2. I would discard Sale #1 from analysis altogether, but I would have to use a golf course related property on Blanton Road instead. Sale #1, with all its faults, offers a better comparison and fewer adjustments. Well now that makes total sense, not! There is the least information about comparable #1 and it's similarities. I would hope there are a lot of photos so I wouldn't have to trespass to see the workshop, fencing and ugly pond. The report raises more questions than it answers and I would rate it well below average in being clear, concise and unbiased. But then I'm projecting my knowledge and expertise in my market area. It may not apply in the area this report was written and thats where the local competency rule would be the overriding factor.

I'll let ya'all land a few punches because I just had to spark more discussion on this unusual reporting approach.

Edd Gillespie · by **Edd Gillespie** on Sat Apr 12, 2008 9:53 pm

Apparently nobody really likes the way this guy writes, but until now I didn't really see anything much to complain about. On this read I see we are told initially that the itemized subject amenities are of no value, but then we get to Comp two and they are worth $5K. I think that is a problem that may negate USPAP credibility or at least put a dent it.

Why don't one of you critics take what the guy gave you and rewrite it the way that it should be. His facts, his conclusions, your rewrite. Might educate us all. I can't speak for everyone, but I'll take any of you who try, seriously.

I'm not particularly a critic, but I'll try it my way.

Edd Gillespie · by **Edd Gillespie** on Sat Apr 12, 2008 10:19 pm

Other Amenities: The subject has a metal-sided workshop on a slab, with an improvised roll-up door. It also has some old farm fencing which might be valued in use, but there is no market evidence that buyers will pay a premium for a property that has it. There is small pond on the property which has just been completed. The pond resembles a mud hole on the day of inspection, but is far enough away from the main house that it does not detract from the house's value. I attribute no value to the pond or to the fence.

Sale #1 has a similar workshop, and receives no adjustment.

Sale #2 has a small utility building and a swimming pool with a wood privacy fence. Agent input and market studies performed for other appraisals indicate that small swimming pools contribute only about $5,000 to value.

Sale #3 has only a 24' x 38' concrete slab, which is used as extra parking at present. In my judgment the slab adds no market value. (I cannot support the $5K positive adjustment to comp 3 based on the narrative. There must be an error.)

Reconciliation of the Sales:
Sale #1 is a fair-quality house. Patent construction flaws lead me to the reasonable assumption that there may be corresponding latent defects in construction as well. Sale #2 is a well constructed house in a competing neighborhood that has been totally remodeled on the inside, and the exterior is very well maintained. However, its age disqualifies it as a primary indicator of value. Sale #3 is a house that is most like the subject in quality and finish. It's not as well situated as the subject (further from town), but offers the privacy and land area that many rural buyers seek. For those reasons I place most emphasis on Sale #3, with support from Sale #2.
Sale #1 was used in this appraisal because it is preferable to any other recent sales.

Rip it up, but try to offer alternatives that are preferable if you do.

Chris H · by **Chris H** on Sun Apr 13, 2008 10:23 am

From the information provided you did an excellent job! :tumbsup:

Edd Gillespie · by **Edd Gillespie** on Sun Apr 13, 2008 11:14 am

Wheree I am the amount of info provided by the appraiseer is ample. Some of the local peers make up other stuff for the underwriters, but if we are looking for the kind of stuff an an SFR mortgage appraiser can afford to research, analyze and include in the report, that is about it. Its a cheaper-faster thing too.

Otis · by **Otis** on Sun Apr 13, 2008 1:09 pm

Chris H wrote:I'll let ya'all land a few punches because I just had to spark more discussion on this unusual reporting approach.

Now why would we attempt to do more than what you already posted? It seems that you posted what some of thought all along but never exactly put into words.

BTW, Jim started a thread, http://appraisers.freeforums.org/person ... t2498.html , which is associated with this, or should now be formally done.

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