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  #1  
Old 08-06-2010, 02:37 PM
recentlyflooded recentlyflooded is offline
 
Join Date: Aug 2010
State: Tennessee
Professional Status: General Public
Posts: 2
Default appraisal of flooded house for casualty loss claim

Hello, everyone,
we got flooded in TN in May 2010 and found out not long ago that we can file a casualty loss with IRS. For that we need to know the value of the house right before the flood (which we know, we had it on market and got it appraised) and the value of the house right after the flood before we fixed it so we can calculate what our loss in home value is. We have the pictures of the house right after the flood and we got full amount of grant from FEMA. The house is almost fixed now.
How can we calculate the value after flood? There are gotted homes in our area on market that people are trying to sell without fixing them but prices are soo different and none of them are sold? Where can we find an appraisor who works with flooded houses?
Thank you in advance for your help
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  #2  
Old 08-06-2010, 02:47 PM
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AnonApprsr AnonApprsr is offline
 
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State: Massachusetts
Professional Status: Certified Residential Appraiser
Posts: 6,285
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You may find an appraiser who mentions that they are "flood" experts but I doubt it. Just look for a local appraiser and call and speak with him about it. See if he seems competent.

Firstly though, who is the intended client? The insurance company or FEMA? The appraiser would likely have to confer with them regarding what they wanted.

http://appraiserusa.com/ <-- go here and use your zip code to find appraisers. Speak with 3 or 4 of them at least.
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  #3  
Old 08-06-2010, 04:04 PM
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PointerAppraisal PointerAppraisal is offline
 
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Location: Bath
State: Ohio
Professional Status: Certified General Appraiser
Posts: 111
Default Retrospective Appraisal meeting IRS protocol.

According to your post, you are only seeking one value opinion, the value of the house just following the date it was flooded. You would want the appraiser to consider the evidence you have pertaining to the condition as of the effective date of the value opinion. Look for someone who is experienced in appraising damaged or non-habitable property and has experience performing retrospective appraisals. A retrospective appraisal is an opinion as of a date in the past.

You will want to speak with a tax attorney regarding your situation and use of the appraisers opinions and report. You should also discuss with the attorney what the qualifications of the appraiser should be to meet IRS qualified appraiser requirements for the type of assignment you are engaging for. Additionally, the report format may have to meet the IRS engineering standards.

See IRS Appraisal: (We are updating the website, in a week this may not work, but you will be able to search the page at www.pointerappraisal.com)

http://www.pointerappraisal.com/IRSCompliantAppraisal


Russell Kitzberger, RAA
Pointer Appraisal Services LLC
  #4  
Old 08-06-2010, 07:03 PM
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Webbed Feet Webbed Feet is offline
 
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Location: City of Free Speech
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Professional Status: Certified Residential Appraiser
Posts: 12,168
Default

Quote:
Originally Posted by recentlyflooded View Post
Hello, everyone,
we got flooded in TN in May 2010 and found out not long ago that we can file a casualty loss with IRS. For that we need to know the value of the house right before the flood (which we know, we had it on market and got it appraised) and the value of the house right after the flood before we fixed it so we can calculate what our loss in home value is. We have the pictures of the house right after the flood and we got full amount of grant from FEMA. The house is almost fixed now.
How can we calculate the value after flood? There are gotted homes in our area on market that people are trying to sell without fixing them but prices are soo different and none of them are sold? Where can we find an appraisor who works with flooded houses?
Thank you in advance for your help
Unfortunately, you've made a tough job even more complex because you failed to hire an appraiser BEFORE allowing the repairs to be started and almost completed. You cannot calculate the loss in value because value is a concept regarding market reaction and value is an opinion, not a fact. Market reaction is how possible buyers would react based on market evidence, not a math formula.

Now an appraiser is forced to do a "Retrospective" analyses of a lot of damage that they have never seen. Your insurance agent should be fired for not advising you better if you had a home owner's insurance agent.
  #5  
Old 10-20-2010, 12:45 PM
recentlyflooded recentlyflooded is offline
 
Join Date: Aug 2010
State: Tennessee
Professional Status: General Public
Posts: 2
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Now a few month passed by and we have COMPS in our subdivision, the prices of sold houses (that were not fixed, just gutted) are $120,000 below the pre-flood prices. There are some that are not sold, but the asking price still $110,000-$120,000 below the pre-flood prices, and they are not getting sold. Can appraisor use these comps for our after-the-flood-not-fixed-house? Or can we send our casualty loss claim to the IRS without doing apprasal, just show $120,000 los on the house?
  #6  
Old 10-20-2010, 03:46 PM
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RSW RSW is offline
 
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State: Tennessee
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Default

I would have no problem in doing this type of appraisal as I used to work as a disaster housing inspector for with FEMA for several years. The only problem is, I don't do appraisals in Middle Tennessee.
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  #7  
Old 10-21-2010, 06:27 AM
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PointerAppraisal PointerAppraisal is offline
 
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Location: Bath
State: Ohio
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Default

Quote:
Now a few month passed by and we have COMPS in our subdivision, the prices of sold houses (that were not fixed, just gutted) are $120,000 below the pre-flood prices. There are some that are not sold, but the asking price still $110,000-$120,000 below the pre-flood prices, and they are not getting sold. Can appraisor use these comps for our after-the-flood-not-fixed-house?
If these repaired resales are the best and comparable then an appraiser may determine they provide an accurate portrait of the current market value of your property and utilized them in their analysis.

Quote:
Or can we send our casualty loss claim to the IRS without doing apprasal, just show $120,000 loss on the house?
That is definetely an IRS question, so you should ask a tax attorney that one.
  #8  
Old 10-21-2010, 07:57 AM
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Location: Central PA-Altoona-State College
State: Pennsylvania
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Posts: 3,862
Default

Quote:
and we got full amount of grant from FEMA.
Did you have flood insurance?
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  #9  
Old 10-21-2010, 09:05 AM
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David Wimpelberg David Wimpelberg is offline
 
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Location: Hamptons, NY
State: New York
Professional Status: Certified General Appraiser
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I've performed several appraisals like this for the IRS; not for fire damage in particular, but other types of damage. Basically, two appraisals need to be performed: before damage and after damage. The difference between the two is the number that is necessary for tax purposes.

You'll have to find an appraiser competent in these type of assignments. It's been my experience the General Certified appraisers tend to be more familiar with these types of assignments. This is because many other types of assignments that they perform use the same type of before-and-after methodology; e.g., determining the value of various property rights, easements, etc. If you call around and the appraiser does not understand what you are referring to right off the bat, you'll need to find another appraiser.
  #10  
Old 10-21-2010, 09:56 AM
Rich Heyn Rich Heyn is offline
 
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Location: Southwestern Michigan
State: Michigan
Professional Status: Certified General Appraiser
Posts: 2,607
Default

Quote:
Originally Posted by recentlyflooded View Post
Hello, everyone,
we got flooded in TN in May 2010 and found out not long ago that we can file a casualty loss with IRS. For that we need to know the value of the house right before the flood (which we know, we had it on market and got it appraised) and the value of the house right after the flood before we fixed it so we can calculate what our loss in home value is. We have the pictures of the house right after the flood and we got full amount of grant from FEMA. The house is almost fixed now.
How can we calculate the value after flood? There are gotted homes in our area on market that people are trying to sell without fixing them but prices are soo different and none of them are sold? Where can we find an appraisor who works with flooded houses?
Thank you in advance for your help
If you are in the Nashville area call Danny Wiley at the Wiley Group 615.463.2427. Danny is an excellent appraiser and a great guy with tons of experience.
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