Cost Appraoch Insanity!

[Mark to market]

If the total market is down, its a decline in values ... not attributable to some External influence ... it is the market. External Obsolescence, in the typical sense, affects one or a few properties by something outside the property boundaries. If values are declining across the board, it may very well be economic, but against what are you applying it to, past values? Values today are values today and there is nothing externally that is affecting the value today .. it is what it is. The market has declined, .

Per the 12th edition;

External obsolescence can be either temporary (e.g. an oversupplied market) or permanent (e.g. proximity to an evnviromental disaster.

 

[Mr Rex]

Dave, I have made a conscientious effort to avoid piling on, but you are wrong in your analysis, but insist on asking for advice and comments and then getting peed when the folly of your argument is pointed out. Why not take your ball and go home, or just as usual alert the moderators that someone stole you lunch money and gave you a wedgy?

 

[PropertyEconomics]

If the total market is down, its a decline in values ... not attributable to some External influence ... it is the market. External Obsolescence, in the typical sense, affects one or a few properties by something outside the property boundaries. If values are declining across the board, it may very well be economic, but against what are you applying it to, past values? Values today are values today and there is nothing externally that is affecting the value today .. it is what it is. The market has declined, .

Per the 12th edition;

External obsolescence can be either temporary (e.g. an oversupplied market) or permanent (e.g. proximity to an evnviromental disaster.

Thank you Mr Raney .. as I stated ... to what would you apply the external obsolescence to? Old costs? Wouldnt new costs including land values show current conditions? Doesnt the market reflect all forms of obsolescence? Exactly what would you reflect as external obsolescence?

 

[Lee Lansford]

I'm happy that I did not join this thread earlier!

What I conclude:

a) External Obsolescence is present.

b) Most likely, the Cost Approach is not necessary in order to communicate a credible appraisal. Thus...why bother?

 

[PropertyEconomics]

Dave, I have made a conscientious effort to avoid piling on, but you are wrong in your analysis, but insist on asking for advice and comments and then getting peed when the folly of your argument is pointed out. Why not take your ball and go home, or just as usual alert the moderators that someone stole your lunch money and gave you a wedgy?

NOW THAT .. is FUNNY!!!

Laugh a little Dave .. you are gonna be old before your time. No one was angry at you, or was fighting with you. If you have no thicker skin than to have a few disagree or criticize your posts .. how do you run a $1,000,000 company?

Commercial guys and most residential guys look at appraising through different eyes. Its not to criticize most residential appraisers its just a fact. Our thought processes are different because of how we are taught appraising. Commercial guys live by few rules and can go back as far as needed, go out as far as needed, do different types of analysis that are not slammed by some underwriter but which result in a value conclusion based upon market evidence.

You admitted you were speculating ... that remains a bad idea ....

 

[xmtpedprl]

Rex, McNamara, and anyone else,

My analysis is wrong? I am submitting that at the present no conclusive analysis can even be done. I know that just seems impossible by the standards of some here, yet as of the 'Effective Date' of our report perhaps quite possible.

This thread was doing just fine until the 'usual suspects' came along, and everyone reading it knows it. You guys really don't know what effect you have on those who sit by and silently read, do you...?

Dave...

 

[TJSum]

Free land available in Baltimore City, these three homes were purchased for $1 each, and when buying all three not only did the seller pay all closing cost, but kicked in a $1,000 "reward". I wonder what the commission was for the listing agent for these three sales, 18 cents ?

1816 ETTING ST, BALTIMORE, MD 21217ML#: LP: $1Status: SOLDDOMM/DOMP: 223/223Adv Sub: WEST BALTIMOREOwnership: Ground Rent, SaleTotal Taxes: $232Contract Date: 08-Nov-1999Close Date: 13-Dec-1999Close Price: $1 Seller Subsidy: $666Date Avail: Ground Rent:$120Type: Attach/Row HseArea: N/AStyle: OtherMap Coord: BABR/FB/HB: 2/1/Tot Fin Sqft: Lot AC/SF: .020 / 840HOA/CC Fee: .00/Model: Yr Blt: 1900Lvls/Fpl: 2/0Vacation Y/N: NoConstruction: BrickBasement: Yes, UnfinishedParking: Street# Gar/Cpt/Assgn: //Heat/Cool: Natural Gas/Forced Air/None/NoneWater/Swr: Public/Public SewerList Date: 30-Mar-1999Update Date: 27-Jul-2005Showing Information: Call Office, All Days, - Company: Bernett & Jackson Realty Sales, Inc.Office/Fax: (410) 542-8118 / (410) 542-7449List Agent: Bernie JacksonHome/Office: (410) 653-1716 / (410) 542-8118Showing: BERNIE JACKSONHome: (410) 488-6908
Remarks: 2 story brick row house. SELLER WILL PAY ALL CLOSING COST including any liens SELLER WILL PAY 1000.00 to buyer of 1816,1818,1827 ETTING if bought as a package. Amount to buyer is negotiable.
Directions:

1818 ETTING ST, BALTIMORE, MD 21217ML#:LP: $1Status: SOLDDOMM/DOMP: 223/223Adv Sub: WEST BALTIMOREOwnership: Ground Rent, SaleTotal Taxes: $232Contract Date: 08-Nov-1999Close Date: 13-Dec-1999Close Price: $1 Seller Subsidy: $666Date Avail: Ground Rent:$120Type: Attach/Row HseArea: N/AStyle: OtherMap Coord: BABR/FB/HB: 2/1/Tot Fin Sqft: Lot AC/SF: .020 / 840HOA/CC Fee: .00/Model: Yr Blt: 1900Lvls/Fpl: 2/0Vacation Y/N: NoConstruction: BrickBasement: Yes, UnfinishedParking: Street# Gar/Cpt/Assgn: //Heat/Cool: Natural Gas/Forced Air/None/NoneWater/Swr: Public/Public SewerList Date: 30-Mar-1999Update Date: 27-Jul-2005Showing Information: Call Office, , - Company: Bernett & Jackson Realty Sales, Inc.Office/Fax: (410) 542-8118 / (410) 542-7449List Agent: Bernie JacksonHome/Office: (410) 653-1716 / (410) 542-8118Showing: BERNIE JACKSONHome: (410) 488-6908
Remarks: 2 story brick row needs work. SELLER WILL PAY CLOSING COST and any liens SELLER WILL PAY 1000.00 to buyer of package of all three properties 1816,1818,1827 ETTING St
Directions:

1827 ETTING ST, BALTIMORE, MD 21217ML#: LP: $1Status: SOLDDOMM/DOMP: 223/223Adv Sub: WEST BALTIMOREOwnership: Ground Rent, SaleTotal Taxes: $232Contract Date: 08-Nov-1999Close Date: 13-Dec-1999Close Price: $1 Seller Subsidy: $666Date Avail: Ground Rent:$120Type: Attach/Row HseArea: N/AStyle: OtherMap Coord: BABR/FB/HB: 2/1/Tot Fin Sqft: Lot AC/SF: .020 / 715HOA/CC Fee: .00/Model: Yr Blt: 1900Lvls/Fpl: 2/0Vacation Y/N: NoConstruction: BrickBasement: Yes, UnfinishedParking: Other# Gar/Cpt/Assgn: //Heat/Cool: Natural Gas/Forced Air/None/NoneWater/Swr: Public/Public SewerList Date: 30-Mar-1999Update Date: 27-Jul-2005Showing Information: Call Office, , - Company: Bernett & Jackson Realty Sales, Inc.Office/Fax: (410) 542-8118 / (410) 542-7449List Agent: Bernie JacksonHome/Office: (410) 653-1716 / (410) 542-8118Showing: BERNIE JACKSONHome: (410) 488-6908
Remarks: 2 story brick row needs work. SELLER WILL PAY CLOSING COST and any liens SELLER WILL PAY 1000.00 to buyer of package(1816,1818 and 1827 ETTING)
Directions:

 

[Mr Rex]

Free land available in Baltimore City, these three homes were purchased for $1 each, and when buying all three not only did the seller pay all closing cost, but kicked in a $1,000 "reward". I wonder what the commission was for the listing agent for these three sales, 18 cents ?

1816 ETTING ST, BALTIMORE, MD 21217ML#: LP: $1Status: SOLDDOMM/DOMP: 223/223Adv Sub: WEST BALTIMOREOwnership: Ground Rent, SaleTotal Taxes: $232Contract Date: 08-Nov-1999Close Date: 13-Dec-1999Close Price: $1 Seller Subsidy: $666Date Avail: Ground Rent:$120Type: Attach/Row HseArea: N/AStyle: OtherMap Coord: BABR/FB/HB: 2/1/Tot Fin Sqft: Lot AC/SF: .020 / 840HOA/CC Fee: .00/Model: Yr Blt: 1900Lvls/Fpl: 2/0Vacation Y/N: NoConstruction: BrickBasement: Yes, UnfinishedParking: Street# Gar/Cpt/Assgn: //Heat/Cool: Natural Gas/Forced Air/None/NoneWater/Swr: Public/Public SewerList Date: 30-Mar-1999Update Date: 27-Jul-2005Showing Information: Call Office, All Days, - Company: Bernett & Jackson Realty Sales, Inc.Office/Fax: (410) 542-8118 / (410) 542-7449List Agent: Bernie JacksonHome/Office: (410) 653-1716 / (410) 542-8118Showing: BERNIE JACKSONHome: (410) 488-6908
Remarks: 2 story brick row house. SELLER WILL PAY ALL CLOSING COST including any liens SELLER WILL PAY 1000.00 to buyer of 1816,1818,1827 ETTING if bought as a package. Amount to buyer is negotiable.
Directions:

1818 ETTING ST, BALTIMORE, MD 21217ML#:LP: $1Status: SOLDDOMM/DOMP: 223/223Adv Sub: WEST BALTIMOREOwnership: Ground Rent, SaleTotal Taxes: $232Contract Date: 08-Nov-1999Close Date: 13-Dec-1999Close Price: $1 Seller Subsidy: $666Date Avail: Ground Rent:$120Type: Attach/Row HseArea: N/AStyle: OtherMap Coord: BABR/FB/HB: 2/1/Tot Fin Sqft: Lot AC/SF: .020 / 840HOA/CC Fee: .00/Model: Yr Blt: 1900Lvls/Fpl: 2/0Vacation Y/N: NoConstruction: BrickBasement: Yes, UnfinishedParking: Street# Gar/Cpt/Assgn: //Heat/Cool: Natural Gas/Forced Air/None/NoneWater/Swr: Public/Public SewerList Date: 30-Mar-1999Update Date: 27-Jul-2005Showing Information: Call Office, , - Company: Bernett & Jackson Realty Sales, Inc.Office/Fax: (410) 542-8118 / (410) 542-7449List Agent: Bernie JacksonHome/Office: (410) 653-1716 / (410) 542-8118Showing: BERNIE JACKSONHome: (410) 488-6908
Remarks: 2 story brick row needs work. SELLER WILL PAY CLOSING COST and any liens SELLER WILL PAY 1000.00 to buyer of package of all three properties 1816,1818,1827 ETTING St
Directions:

1827 ETTING ST, BALTIMORE, MD 21217ML#: LP: $1Status: SOLDDOMM/DOMP: 223/223Adv Sub: WEST BALTIMOREOwnership: Ground Rent, SaleTotal Taxes: $232Contract Date: 08-Nov-1999Close Date: 13-Dec-1999Close Price: $1 Seller Subsidy: $666Date Avail: Ground Rent:$120Type: Attach/Row HseArea: N/AStyle: OtherMap Coord: BABR/FB/HB: 2/1/Tot Fin Sqft: Lot AC/SF: .020 / 715HOA/CC Fee: .00/Model: Yr Blt: 1900Lvls/Fpl: 2/0Vacation Y/N: NoConstruction: BrickBasement: Yes, UnfinishedParking: Other# Gar/Cpt/Assgn: //Heat/Cool: Natural Gas/Forced Air/None/NoneWater/Swr: Public/Public SewerList Date: 30-Mar-1999Update Date: 27-Jul-2005Showing Information: Call Office, , - Company: Bernett & Jackson Realty Sales, Inc.Office/Fax: (410) 542-8118 / (410) 542-7449List Agent: Bernie JacksonHome/Office: (410) 653-1716 / (410) 542-8118Showing: BERNIE JACKSONHome: (410) 488-6908
Remarks: 2 story brick row needs work. SELLER WILL PAY CLOSING COST and any liens SELLER WILL PAY 1000.00 to buyer of package(1816,1818 and 1827 ETTING)
Directions:

Any bets that they are getting tax credits for a charitable donation based on an appraisal of the value of the dirt +?

 

[Lee Lansford]

...Thanks AI, for dumbing down the demo requirements. Because that's where most appraisers USED to learn it.

Joyce, though my comment is not specific to the string of discussion, I could not resist:

Recently I shared a table at lunch with an AI instructor...a well-respected gentleman whose name, I suspect, might be familiar to you.

I told him that I intended to sit for the AI's 45-hr. module that is the substitute for the residential demo that is a requirement for the SRA. This man is one of the instructors of the 45-hr. module. We talked for a moment regarding some of the criticisms--and the critics--of the module as a substitute for the demo. His response: He would like to see the critics enroll in the course for CE but take the exam...and see if they can pass it! Are you interested?

Lee

 

[TJSum]

Most lots in the city priced like this have excessive taxes, ground rents and you get shot at when going down to visit your property, so the carrying costs are just too high to have any value...