Wednesday, November 29, 2023 | The Latest Buzz for the Appraisal Industry

Random Thoughts of an Appraiser – Part 6

Matt Simmons has been busy with his sixth edition of “Random Thoughts of an Appraiser!” There are plenty of times where appraisers have collectively had thoughts or concepts that can be communicated and/or questioned in a sentence and don’t need a dedicated article. We are pleased to have Matt Simmons, partner of Maxwell, Hendry & Simmons, offer a periodic collection of observations on what’s going on in the valuation world. Matt is a licensed appraiser and consults on both residential and commercial income-producing acquisitions. Matt’s random thoughts are strictly for your entertainment. Enjoy!

  • Oh, okay. You got me. I’ll use the good comps now.
  • Remember that group game when you were a kid called Telephone, or Pass the Message? The first kid would whisper a sentence to the second kid and it would go around the circle until the last kid got the message and announced it aloud – almost always to uproarious laughter as the group heard how jumbled the message had become along the way. I’m not anti-AMC. I just learned the lesson from the game.
  • As appraisers, we undercut our credibility as a profession more than anyone else. I can’t use that comp because it’s more than a year old. I can’t use it because it’s too far. The form won’t let me do it. The client won’t like it. The computer said, “No.” Aside from all of these being myths, you should realize what message that sends. We’re powerless as appraisers, stuck in a box, and don’t have the autonomy to do what might need to be done in a unique situation. Just remember, when you put off the ‘powerless appraiser’ aura, it becomes really difficult to then argue that lenders shouldn’t use algorithms to value properties. What use are you anyway? You’re stuck in a box?
  • Why won’t UAD allow a positive adjustment in sales/financing concessions line? There are transactions where that could be applicable.
  • Be careful not to impose an assignment condition (hypothetical or extraordinary) on an assignment when that won’t solve the appraisal problem. Sometimes we’re called upon to provide a value when something relevant to the value is ambiguous and is going to remain that way. It’s easy to end up changing the appraisal problem and imposing a condition when that wasn’t the problem you were asked to solve – all to give YOURSELF more solid ground. That’s self-serving. We shouldn’t change the definition of the problem we’ve been asked to solve just to make something easier on us. In real-life situations, there isn’t always solid ground. People have to make decisions pricing in the risk of uncertainty. If you always insist on assignment conditions so you’re “covered,” your appraisal is of no value in that situation.
  • Being an appraiser is like being a test taker who never gets the answers.
  • The UAD character limit for narrative on additional features in the cost approach is frustrating. Twenty characters when the allotted space often fits double that.
  • I really wish appraisers would stop saying, “this report is subject to…” – the REPORT is not subject to anything. The APPRAISAL is. One of the biggest problems in residential appraisal is that so many appraisers have been taught to understand the appraisal only in the context of a 1004 or 1073 form report. The report is not the appraisal. The language used tells the reader if you understand the distinction.
  • Thanks for asking. Now that you mention it, the private road renders this house completely unmarketable.
  • The CU 2.0 rating is really more of a rating of collateral conformity than of appraisal quality. The fact that comps aren’t homogenous, are geographically distant, and are from 18 months ago is almost always about the characteristics of the subject property. Many users of appraisal services have warped it into being a score of the appraisal itself. And then they wonder why no one on their panel will accept an assignment for a unique property.

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