Appraisal Matters

The ability to verify data is becoming harder and harder.  As appraisers, we must verify sale, capitalization rates and comparable rentals with one of the market participants.  This is becoming harder every day for many reasons:

• Since many transactions are represented by Realtors, we rely upon them for data.  Many who were in the business have now left.  This puts their sales/rental file in limbo.  When we call into a company, they now have a skeleton staff who are so stretched and stressed they are unable to help us.
• The Realtor Companies are cutting back on their advertisements in Loopnet and Costar leaving many of the transactions a mystery.
• Many of the buyers no longer wish to cooperate because their properties are now losing value and they are embarrassed.
• More and more transactions are now private.  These have always been the hardest to follow up with and often finding the phone number of a participant is impossible.
• The number of transactions is very low.  It is difficult to get a handle on a market with such a small pool of data.

We’re finding after years of being spoiled by TOO much data, we now have to expand on our research to find meaningful comparable data.  This trend is worse in the small commercial market than the larger investment grade market.

Eileen Simpson