Steven Santora said:
Grace,
I like the advice in William’s first post. I would paraphrase that as - FIND reasons to fiddle with the cost approach numbers so the result can better “support” the sales comparison. :icon_smile:
Either that or let this be an oppurtunity to learn how to practice learning how to stop letting clients corrupt your appraisal. There is going to be an unending series of clients who think your value is too low (even if this one only thinks that one of your value indicators is too low).
Mike Neff,
I thought the ultimate goal of doing appraisals is to make enough money, to buy enough of your own property (any kind) so that someday you can stop begging other people to let you analyze theirs for a fee. You can call that the Harry Helmsley model, the appraiser who ended up being the majority partner in the Empire State Building with a real estate portfolio that included a hotel his wife became famous for “managing.” Does anyone think there is something that the Trump’s, Tishman’s and Zell’s of this world (and their senior bean counters) can learn about highest and best use or valuation from a seminar on the cost approach? Anyone think those folks are using fill-in-the-blank cost approach formulas for decision-making? If you answered those last two questions yes, please say hello to Rod Serling and Elvis Presley for me the next time you them. :icon_smile:
Stephen, I would prefer tweak to fiddle, it to the most accurate representation that Grace can. The inherent problem with published costs, such as the ones we use and are about the best we can get our hands on, is that it is aged information. We know they change in 3 months time, as does the market for the land. They change monthly, weekly, daily, and sometimes hourly. My brother in law, who is a general contractor, naturally uses software which he plugs every single number for various costs, on any given day, to give him a number that he can give his customer's so they can have the most accurate number of expected cost, on that day. Ideally, I guess we would do so too.
I'll bet you can be sure that Trump's, Tishman's and Zell's bean counters crunch the numbers of cost, much more than any commercial appraiser and are paid high salaries to do so, but in a perfect appraisal world, we would be paid to do so to their point of accuracy. When these numbers are crunched, then these developers have a basis upon which to make a decision to proceed, depending on the profits.
I don't know Grace, or her level of experience, but "fiddle" and "appraisal" could be confusing or demeaning towards the appraisal process. But who cares? This job sux anyway. LOL
