Appraisal Matters

Like my blogs on ceiling height and sprinkler adjustments, appraisers frequently misjudge how to adjust for refrigeration in industrial buildings.  In demonstration appraisal reports for the Appraisal Institute’s MAI designation, I’ve seen it treated as a super adequacy.  This is considered more the rule than the exception, yet appraisers run the risk of appraising by [...]

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Key 8 – Pre-Trial Preparation

Regardless of what level you will be discussing your case, your team members should, at the very least, know each other and develop a comfort level. Pre-trial preparation is where cases are won or lost. Most pre-trial preparation activities involve an appraiser. Your attorney or tax appeal personnel should provide [...]

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Key 7 – Determine Your Return on Investment

There’s a limit to what someone can spend to win a tax appeal. It can be difficult to gauge the cost when you do not know whether the case will be settled at the board level, State Court or higher. Further, when you do not know the [...]

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Like my prior post on ceiling height, sprinkler adjustments should not be done by rote.  Here’s why:

Most brokers I’ve met say that sprinklers do not matter.  Developers only put them in when they have to because they do not get extra rent for them; why incur the cost?
Sprinklers are now generally required by code and [...]

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Key 6 – Use the Right Tool for the Right Job

Based on the type of opposition you will face above, you need to make sure you have the right professionals on your team. Although property owners can appear in front of local boards, almost all commercial tax appeals have attorneys or tax [...]

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I’m a consumer so I understand that commercial appraisals are expensive for many people. We are generally the most expensive item for a loan and certainly expensive for many estates.  It is a great leap of faith for someone to order an appraisal and not know if a "value will be made."
Again, like the last [...]

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This is not scientific, but I do all the bids for our company.  In March, April and May commercial appraisal orders for lenders were WAY down.  Some weeks we got none, which was unusual given the last few years.  We are always very high in search engines so we get a lot of Broker requests.  [...]

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Key 5 – Know the Opposition

Some jurisdictions use Assessors at the state level, some at the county level, some at the local level, and others hire independent appraisers to defend property values. Your strategy will vary among these four types of Assessors.

State level Assessors have case loads that tend to be [...]

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Key 4 – Always get the Assessor’s worksheet

The Assessor’s worksheet is a document that shows how the Assessor arrived at the market value of a property. Many times, the addresses of the comparable sales are included and sometimes operating expense comparables and capitalization rate comparables are shown. It goes without [...]

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Too many times, appraisers adjust by rote, which in the case of ceiling height, can be incorrect.  The following needs to be considered before applying a ceiling height adjustment to a comparable sale:

Differences in ceiling height may not be functional obsolescence.  If the subject is in a small industrial building manufacturing market, lower ceiling heights [...]

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Key 3 – Know Your Market and Submarkets

Although you may not be an expert, you can call upon experts to learn about your market. Brokers have their fingers on the pulse of the market and they are often more than happy to provide you with truly comparable properties for comparison, if they [...]

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Key 2 - Avoid “Protective” Appeals

In the last few years, it has become more common for clients to file protective tax appeals on all owned properties. This is a practice that can severely backfire. Many tax appeal consultants use this tactic not only as a marketing tool, touting the advantages [...]

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Key 1 – Know the Rules Before You Play
Although this may seem cliché, not knowing the jurisdiction’s tax assessment and appeals rules can derail a tax appeal well before it even has a chance to be heard. It is important to get a copy of the law and recent court cases to [...]

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With the current well-publicized real estate problems, tax appeals have become more viable for commercial property owners.  The bottom line is a lower property value, yet real estate tax assessments have not been reduced accordingly.

The Problem

Assessors throughout the country have a daunting task. They have to value a large number of properties [...]

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So if the transaction amount is materially greater than the market value as shown by comparables or via another approach to value, is the seller and buyer just wrong about market value or do they know something that the market or the appraiser does not?  What exactly is the difference between the higher transactional value [...]

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A property where supply is so low yet demand always seems to remain high has no downside, right? Guess again.
Ironically, unless they are trophy properties, they are frequently more difficult to sell.  Conventional financing vehicles, which often represent the vast majority of potential financing available, do not work because the properties usually don’t "appraise" for [...]

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As appraisers, we apply a market condition in our appraisals when property values go up and down. But does that mean the adjustments apply to an entire class of properties and that there are no exceptions?
T    Thinking back to Economics 101, price is set at the intersection of the supply and demand curves. [...]

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Some jurisdictions require the petitioner in a tax appeal case to prove that a property is unfairly assessed in relation to other properties . We appraisers call this tax comparable analysis and it’s done on a price per square foot basis.
There are many problems with tax comps. It is not uncommon for one or [...]

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Too often, market participants rely on assessments as reflective of a commercial property’s market value. What could be easier than relying on the assessment as market value? The problem is too few market participants do not understand what is not included in the assessed value. Here are some of the most obvious and important omissions:

Assessments [...]

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Appraisers, lenders and brokers have an unfortunate tendency to focus on price per slip as the unit of measure for marinas. Instead of simply getting cap rates from sales, too many appraisers do a full sales comparison approach and use nebulous, mere guesswork adjustments to derive a uniform price per slip range.
Here are the [...]

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We use MRIS, a large regional multiple listing service. Here are our rules for using the system; they also apply to other MLS systems:

Consider the source - brokers don’t always report a property type correctly. For instance, is a converted home residential or commercial? Is an industrial condominium that is used/converted to [...]

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At first glance, the skill sets between residential and commercial appraisers seem very similar. They share property inspection, building measurement, comparable selection, sales comparison adjustment, building description, site description and sketching skills. Shouldn’t it be easy to transition? Well, just like Apple and Intel are both in the computer industry and [...]

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One of the things that I have noticed in working for two commercial appraisers as an executive assistant/mother hen and also being trained as an apprentice appraiser is that for such a dynamic field as this, organization is key. Until I get my apprentice certification, I’ve been doing all of the initial grunt work, pulling [...]

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We just started taking credit cards. Why? Because private individuals are desperate for appraisals, but don’t have the money to purchase one, we started to take credit cards so we could actually book private people.
We have a lot of partnership breakups, divorces and even hard money lenders who really need a loan, but [...]

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We had a fire, had to move our office. This of course was MUCH harder than anticipated with telephone transfer issues, computer problems and just the hassle of moving too quick. We’re back now and doing OK. Staying on top of things was hard but life comes at you in circles. [...]

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