Appraisers' Free Forum

Actually if both appraisers were competent and both defended their appraisal well, then the real question would be how unique was the property.

I can certainly see this happening in a commercial property. I find out assessor commonly assesses manufacturing plants at double or triple the price that they actually sell for.

In appraising oil and gas properties, again, I find valuations that are commonly a huge distance apart.

Ranches with multiple utilities. Say 5000 acres with 2 dwellings, a coal mine on the surface, 10 gas wells, water rights to a trout stream, and a 4 lane running thru the middle with a truckstop owned by the ranch to capture the tourist trade... Also great antelope country so you have hunting leases too....appraise that. How many states will you hit to find "comps"????'

BTW that was an example given by John Widdoss, instructor, of a ranch that he once appraised. After hearing the fee the banker decided he could settle for something less than "fee simple"...merely the commercial property and the ranch land.

Seems a big range.

If both have been done by compatent qualified appraisers with similar evidence and under similar instructions then perhaps one is too conservative and the other optimistic?

Ah what the heck just split the differance!

If both have been done by compatent qualified appraisers with similar evidence and under similar instructions then perhaps one is too conservative and the other optimistic?

Ah what the heck just split the differance!

Let me give you an example of wide ranges where I was privy to 2 other appraisals on a property. This was several years ago.

This is about 12000 SF manufacturing building in a town of 1200 people and only one other manufacturing plant (the other plant is a poultry processor. The building sit on a small (too small) site of less than 2 acres but had a good highway location.

There was a small manufacturer who built widgets for the other plant (a tool manufacturing plant). An appraiser (and USPAP instructor) appraised it for $750,000 when the company attempted to refinance. When they lost the contract, they folded a few months later and the bank sought an appraisal from an industrial appraiser / broker who valued the property at $650,000 which included about $200,000 of equipment. It sit and sit. They asked me to appraise it and I appraised it for $250,000 ml. sans equipment.... It sold for $300,000 with the equipment. That lasted only 1 year and the equipment was mostly sold, and a local buyer bought it for $210,000. He is making a repair/ sales shop for trailers that he manufactures on his farm near town, and the office space is going to be a Pizza place. I don't think you can make the case that anyone was "wrong" or "right" on the appraisal. Infungible complex properties are not easy to value.

If both have been done by compatent qualified appraisers with similar evidence and under similar instructions then perhaps one is too conservative and the other optimistic?

Ah what the heck just split the differance!

Let me give you an example of wide ranges where I was privy to 2 other appraisals on a property. This was several years ago.

This is about 12000 SF manufacturing building in a town of 1200 people and only one other manufacturing plant (the other plant is a poultry processor. The building sit on a small (too small) site of less than 2 acres but had a good highway location.

There was a small manufacturer who built widgets for the other plant (a tool manufacturing plant). An appraiser (and USPAP instructor) appraised it for $750,000 when the company attempted to refinance. When they lost the contract, they folded a few months later and the bank sought an appraisal from an industrial appraiser / broker who valued the property at $650,000 which included about $200,000 of equipment. It sit and sit. They asked me to appraise it and I appraised it for $250,000 ml. sans equipment.... It sold for $300,000 with the equipment. That lasted only 1 year and the equipment was mostly sold, and a local buyer bought it for $210,000. He is making a repair/ sales shop for trailers that he manufactures on his farm near town, and the office space is going to be a Pizza place. I don't think you can make the case that anyone was "wrong" or "right" on the appraisal. Infungible complex properties are not easy to value.