Modeling Your Appraisal Report to
Meet Your Client's Needs in the
Commercial Marketplace
• Misa Zane, MAI
CW Financial Services
Austin, Texas
August, 5, 2014
• Nick Tillema, MAI, SRA , AI-GRS
Access Valuation, LLC
Modeling Your Appraisal Report…….
“Appraisal reports, due to their indication of market
value, are often used by clients to recycle the report’s
information. The panel will discuss the key areas in
which clients focus their attention while providing
insight as to how information on the subject property,
marketplace and the analysis are utilized to streamline
the client’s internal processes. The goal for this session
is for appraisers to recognize the importance of an
appraisal report in the capital marketplace.”
Modeling Your Appraisal Report…..
“If your only tool is a hammer,
everything starts to look like a nail”
Modeling Your Appraisal Report…..
What is expected?
An un-biased, independent, and objective estimate of value
(that is expected by your client, to further your client’s cause).
Your house as seen by you……
Your house as seen by your buyer……
Your house as seen by your mortgage lender…
Your house as seen by your appraiser……
Your house as seen by your tax assessor……
Modeling Your Appraisal Report…..
• Who Expects What?
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Lenders
Tax Appeal Clients
Eminent Domain Parties
Litigation
Non-Cash Charitable
Donations
– Government Entities
– Private Citizens
Modeling Your Appraisal Report…..
Lenders
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Value
USPAP
Secondary Market
Government Regulations
Market Information
All Three Approaches
Sales Adjustment Grid
Combination
Modeling Your Appraisal Report…..
Property Tax Appeal
• County Assessor versus
Property Owner
• Government Regulations
• Value Standard
• Mass Appraisal Techniques
versus the Three Approaches
• Market Information
• USPAP
Modeling Your Appraisal Report…..
Eminent Domain
• State (Government Entity)
versus Property Owner
• Government Regulations
• Value Standard
• Partial versus Full Taking
• Recognition of Severance
versus Consequential Damages
• Value not affected by current
works project
• USPAP
Modeling Your Appraisal Report…..
Litigation
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State (Government Entity) versus Property Owner
Government Regulations
Value Standard
Partial versus Full Taking
Recognition of Severance versus Consequential Damages
Value not affected by current works project
USPAP
Modeling Your Appraisal Report…..
Internal Revenue Service
• IRS versus private citizen?
• Non-Cash Charitable
Contribution
• Specific requirements
– Qualified Appraiser
– Qualified Appraisal
– Daubert
• USPAP
Government Entity
• Uniform Appraisal
Standards for Federal land
Acquisition (Yellow Book)
• Specific requirements
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Format
Definitions
Before / After
Full vs. Partial Acquisitions
Review
• Standard of Value
Modeling Your Appraisal Report…..
Private Citizens
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Purpose?
Format?
Three Approaches?
USPAP?
Modeling Your Appraisal Report…..
Why is there a difference?
• Because everyone has different interests.
• Because everyone has somebody looking over
their shoulder
• Because everyone is looking out for their own
best interest.
• Because everyone has a different perspective
of what an appraiser does.
Modeling Your Appraisal Report…..
What happens if you miss the mark?
Modeling Your Appraisal Report…..
What happens if you miss the mark?
– Turning the appraisal in two days before a trial with a value
the favors the opposing side.
– Realizing, after you submit the appraisal, that you
appraised the wrong property
– Providing the right answer to the wrong question.
– Providing the wrong answer to the right question.
– Recognize some clients don’t really know what they want.
But that doesn’t relieve you from your obligation to define
the problem and build a scope worthy of the problem.
Modeling Your Appraisal Report…..
How do you protect yourself?
Follow the Appraisal Process!
Modeling Your Appraisal Report…..
How do you protect yourself?
Define the problem
– Take as much time as necessary to understand
what the client wants.
– Delve into the background
– Understand the issues
– Check for conflicts of interest
– Write out your version of the client’s problem and
get the client to sign off.
Modeling Your Appraisal Report…..
How do you protect yourself?
Develop a scope for the defined problem
– Use the value methods best suited to the problem
– Fashion the market analysis for the issue
– Highest and Best Use concern
– Talk to others involved in the field
Modeling Your Appraisal Report…..
How do you protect yourself?
Intended Use and Intended User
– Reports are to be written so the Intended User
can understand them – go to the lowest common
denominator.
– Don’t try to be cute with double talk (Check out
AO 20).
– Are you talking to a judge or to a jury?
Underwriter or auditor?
Modeling Your Appraisal Report…..
How do you protect yourself?
Writing the report
– Explain everything – Logical explanations that are
wrong carry more weight than no explanation at
all.
– Create a synopsis of the problem and your answer
at the beginning of the report
– What to do when you’ve made a mistake?
– Drafts?
Modeling Your Appraisal Report…..
Questions
Nick A. Tillema, MAI, SRA, AI-GRS, CCIM
Access Valuation, LLC
(317) 571-8800
Nick@AccessValuation.com