| ||||||||
|
Book Review of Appraising the Tough Ones : Creative Ways to Value Complex Residential Properties by Frank E. Harrison Paperback (May 1996) Appraisal Institute Published in the October, 1996 issue of Appraisal Today. Reviewed by Ann O'Rourke. Copyrighted. For reprint permission Contact Us. Click
here to order from Amazon.com.
Amazon.com Price: $35.00 Have you ever had to appraise a home with "no comps"? The one home with a huge addition in a tract of small homes? A home modified for handicap access? Or, a home with asbestos siding or an underground heating oil tank? In today’s changing residential appraisal business, taking non-typical, more difficult assignments is critical to your future. Have you ever turned down assignments such as a retrospective value (going back in time) or a life estate? They are actually fairly easy to do. New books about real property appraising have been pretty scarce until 1996, mostly just updates of books originally published many years ago, that rehash 50-plus year-old appraisal theories and techniques. When I first started reading the new book, Appraising the Tough Ones, Creative Ways to Value Complex Residential Properties, published by the Appraisal Institute, I encountered the usual academic, hard to read writing style and content in the introduction (i.e., the use of the word "elucidate"). I was pleasantly surprised to see a very different writing style in the remainder of the book: practical, "real world", and non-academic. The author, Frank Harrison, MAI, SRA has a refreshing, easy to read and understandable writing style. Even more surprising, the author really understands and addresses the practical part of real world, lender based, residential appraising. For example, on the first page in the first chapter, "Many complex residential assignments can be readily identified. An appraiser can easily spot a property that is different from the rest. The appraiser’s initial reaction may be a fervent hope that the property being observed is not the subject property; invariably, it is." Although I have been appraising all types of residential properties for almost 20 years, by the end of Chapter One, I had learned several new ways of approaching complex properties. Highest and best use analysis is often under-utilized by residential appraisers, probably because of lender work, where if the highest and best use is not the present use there is typically no loan made. One 13-page chapter is devoted to this extremely important topic. When confronted with a difficult complex residential assignment, the traditional applications of the three approaches often don’t help much. For the first time I have seen an appraisal book using the word "creativity" in a positive manner. "Complex residential assignments frequently require creativity. To find creative solutions to unusual problems, appraisers must often resort to techniques that are nontraditional, atypical, and sometimes almost revolutionary. There are no unsolvable problems, only appraisers who cannot or will not apply the techniques necessary to solve them." I was glad to see a discussion of non-market value assignments. Many residential appraisers only use the "Fannie Mae" definition of market value, and don’t even consider providing other types of values, such as insurable value, investment value, and liquidation value. In textbooks, matched paired sales sound great, but often aren’t practical, particularly for complex properties. Per the author, "In the real world, for every adjustment that can be supported by a matched pair, another matched pair can usually be found to contradict the adjustment." If you’ve ever worked in a market with declining values, you know the time adjustment can be tough to prove. The book explains how to use data such as changes in listing data, days on market, and comparison of rents. Most appraisers encounter nonconformances, typically caused by zoning changes over the years. Three types of nonconformances are discussed: activity (i.e., a beauty shop in a basement), design (i.e., historic districts), and standards (i.e., zoning). Special circumstances such as life estates, partial interests, easements, stigmatized properties, and historic homes are discussed. USPAP issues are included, such as pressure for low values (estates), competency and how to get it, appropriate data for retrospective appraisals, and reporting requirements. On the minus side, the book lacks a list of references, which would be really useful for specific property types and appraisal issues, particularly since some topics have only a brief discussion, such as life estates and environmental problems. The lack of an index is surprising, as desktop publishing programs make them a breeze to produce. This book is a "must have" for all residential appraisers. If you’re "only" a commercial appraiser, do you ever fee out residential work, ever wonder how to approach more difficult residential assignments, or just want to know more about residential appraising? If so, this book will give you some new ideas, plus give you a good picture of real world residential appraising. |
|
Home Questions?
Feedback? Send email to
info@appraisaltoday.com. |