Basis value of home in 1983?

[Pete Humphrey]

I have a msg that I have not returned yet from a homeowner who's appraisal I completed about 1 year ago. The purpose of the appraisal back then was to settle a dispute with her siblings regarding selling the home or keeping it (it was their deceased parents home). Now she is calling wanting to know what the "basis" was in 1983? Huh? Isn't this a job for an accountant? I know that in income tax accounting, adjusted basis meant what you bought it for + improvements made - depreciation (in a nutshell). Should I tell her to talk to her accountant, or is this something that we appraisers are supposed to do using the cost approach, but how to I adjust it to 1983? I've never done this before, so sorry to sound so stupid. Your help appreciated.

 

[Pamela Crowley (Florida)]

How much is she willing to pay you to work on figuring this out???

 

[PropertyEconomics]

Its a retrospective appraisal to 1983 .. its a great assignment if you have the data ... and one you can charge for ... I really enjoy these assignments.

 

[PropertyEconomics]

It is a market value appraisal as of a specified date in 1983 just the same as you would do one today. If you have the data from 1983 its just a retrospective market valuation ... with lots of assumptions ... its not hard but you have to be thorough. These jobs are often interesting, very frustrating, but they can pay well. Im sure you can do it ... IF ... you have the data.

 

[TJSum]

Yes, finding the data could be a problem I have never done one beyond a year or two back in time, how or what assumptions would be made on the condition of the subject when you go back 25 years ???

 

[PropertyEconomics]

Assumptions can be made based upon your files from that area, from that neighborhood, talking to the owner .... you can do lots of things. As long as you disclose it all you should be ok.
In my office we have data going back to 1972 ... we dont ever throw away a file .... just for these exact reasons.

 

[TJSum]

I understand, but what about the subject? Do you assume it is similar to today, or do you project what it should have been like 25 years younger

 

[PropertyEconomics]

I told you .. you look at your sales from the time period, talk to the owner, look at the area, ... make some assumptions. You certainly can assume it in average condition then UNLESS you know differently. Make the assumptions.... and move on.

 

[Carnivore]

I told you .. you look at your sales from the time period, talk to the owner, look at the area, ... make some assumptions. You certainly can assume it in average condition then UNLESS you know differently. Make the assumptions.... and move on.

I just completed four appraisals on two properties.

2 in 1988 and 2 in 1992.

Big bucks!!

PE is on the money, listen to him.

 

[mike32716]

Melissa, these are great assignments. The sales data is usually there, but confirming the physical data as the subject and comps existed back then is the challenge. Load up the appraisal with assumptions. Tell them what you did and what you assumed.

Most important advice: Talk to all the comp owners if you can, and don't use the 1004 FNMA form. It is not for this type of assignment. Also, check to see if the appraisal will or could be used in tax court (sounds like it won't be) as jurisdictional exceptions apply to USPAP when doing appraisals for tax purposes.