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Basis value of home in 1983?

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Pete Humphrey

Thread Starter
Junior Member
Joined
Jan 18, 2005
Professional Status
Certified Residential Appraiser
State
California
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.
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
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

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
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

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
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

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
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

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
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

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
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

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
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

Member
Joined
Jan 23, 2003
Professional Status
Certified Residential Appraiser
State
Florida
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.
 
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