[10iron]

Hi,
In 2007 our HOA got an appraisal required by our insurance company for our 24 building town home complex. Each building consists of a 4 unit combination one and two story town homes.
We just got another appraisal, Aug. 2009, from a different company. The second appraisal came in much lower and if we use the new numbers, our insurance will drop dramatically. The second company said the lower numbers are due to the first companys' measurements being much higher. 9000 sq.ft/6000 sq.ft. If we use the second companys' numbers and submit this, there is a chance that we will be under insured and that might come back to bite us in the future. The second company said that they will stand by their numbers. If we wanted to take action against the first company for the inflated numbers, we feel we need a third party to verify who is actually correct. Who would you get to verify who is actually right.
Any suggestions??

[Ken B]

The cheap way...measure the buildings yourself. If each building has an identical footprint and unit configuration, it should be a simple process. Do the recorded condo docs report building and unit measurements? Most do. How does that information compare to your calculations and the information reported in the appraisal? Consider that minor differences in calculated areas are typical due to rounding and other factors.

[Jay Emmar]

Originally Posted by 10iron

Hi,
In 2007 our HOA got an appraisal required by our insurance company for our 24 building town home complex. Each building consists of a 4 unit combination one and two story town homes.
We just got another appraisal, Aug. 2009, from a different company. The second appraisal came in much lower and if we use the new numbers, our insurance will drop dramatically. The second company said the lower numbers are due to the first companys' measurements being much higher. 9000 sq.ft/6000 sq.ft. If we use the second companys' numbers and submit this, there is a chance that we will be under insured and that might come back to bite us in the future. The second company said that they will stand by their numbers. If we wanted to take action against the first company for the inflated numbers, we feel we need a third party to verify who is actually correct. Who would you get to verify who is actually right.
Any suggestions??

Hire an independent, qualified appraiser for this type of work and don't give him any details as to the current discrepancy, in order to preserve impartiality. Then compare the three reports.

You are in need of the services of a Certified "General" appraiser, not a residential appraiser, be sure to seek the correct designation. The Appraisal Institute, the National Association of Independent Fee Appraisers, and/or the American Society of Appraisers can provide you with a qualified person in your area.

[Denis DeSaix]

Originally Posted by 10iron

Any suggestions??

The difference you cite (9,000 vs. 6,000) is significant (I'm assuming that is the measurement of each building). Either the first was high by 50% or the second is low by 33%. I would think a layman could measure the buildings and determine which one is closer to what exists?

I'd also want to know what is being measured? Is it the building shell (which may include garage areas, hallways/covered areas, and living space) or is it the individual units' living area only?

Compare the two documents to ensure each is using the same defined area for the measurement calculations.

If, after the above, you still cannot reconcile which one is the accurate measurement for the insurance requirements, then I'd hire a third appraisal firm to help me determine what is what. I'd give the third firm both reports and tell them what the situation is so they can evaluate both reports. Although this type of measurement should be within the competency of most appraisers, I think I'd hire a commercial appraiser/appraisal firm who has experience with insurance valuation appraisals.

Unless there is incompetence involved in one of the two reports you have, my presumption at this stage is that each report measured different areas to arrive at its calculation.

Good luck!

[Pamela Crowley (Florida)]

DENNIS J. BLACK, IFAS
D. J. Black & Company
941-743-8613

[BRCJR]

Originally Posted by Jay Emmar

Hire an independent, qualified appraiser for this type of work and don't give him any details as to the current discrepancy, in order to preserve impartiality. Then compare the three reports.

You are in need of the services of a Certified "General" appraiser, not a residential appraiser, be sure to seek the correct designation. The Appraisal Institute, the National Association of Independent Fee Appraisers, and/or the American Society of Appraisers can provide you with a qualified person in your area.

Why are they in "need" of a CG?
Depends on the SOW, I think.
Someone correct me if I am incorrect on this, please.

[Michigan CG]

Originally Posted by BRCJR

Why are they in "need" of a CG?
Depends on the SOW, I think.
Someone correct me if I am incorrect on this, please.

..........24 building town home complex..............

The potential of the Scope of Work would make it prudent to hire a CG appraiser.

-Reviewing two commercial reports.
-Possible testimony for litigation.
-Possible opinion of value.

Might as well hire one horse that could cover all possibilities instead of having to hire a different one mid race.

[Pamela Crowley (Florida)]

Originally Posted by Timothy Evans

The potential of the Scope of Work would make it prudent to hire a CG appraiser.

-Reviewing two commercial reports.
-Possible testimony for litigation.
-Possible opinion of value.

Might as well hire one horse that could cover all possibilities instead of having to hire a different one mid race.

For all those qualifications and more:

DENNIS J. BLACK, IFAS
D. J. Black & Company
941-743-8613

[Mountain Man]

Don't you have a builder or contractor in your neighborhood? Including myself we've got 5 contractors in our 'hood, and we've only got a total of 30 homes. If the mistake was that significant, we'd get together to pull our own measurements and try to figure out who was wrong.

[Jay Emmar]

Originally Posted by BRCJR

Why are they in "need" of a CG?
Depends on the SOW, I think.
Someone correct me if I am incorrect on this, please.

24-unit complex = CG, IMO. Also seeking out a CG might keep them from using someone who may not have a clue.