Forensic Appraiser???

[CB Perini]

Can anyone explain to me what a forensic appraiser does, if there is a market and specific training available or necessary, or is the title just fluff ? At least it sounds interesting.

 

[Terrel L. Shields]

Forensic only means it is applicable to court or law proceedings. In that sense, a forensic appraiser would include most condemnation appraising. An appraiser defending their appraisal before a court of law in a legal proceeding, such as a divorce is likewise acting as a forensic appraiser. Otherwise, a more narrow definition might be someone who acts in a legal review capacity. I would think this normally combines the person's expertise in dissecting the opposition's appraisal or providing support for a favorable appraisal.

In one case I know where an appraiser submitted an appraisal for a taxpayer contesting the valuation of a golf course by the assessor. The assessor did not second guess themselves by hiring an appraiser to appraise what they had done, only hired a golf course expert appraiser to testify that the proper method for appraising a golf course is the COST approach. The taxpayer had relied upon an appraisal by a person who had no business taking on such an assignment and who weighted the income approach.

The expert sucessfully impeached the testimony of the appraiser and the courts ruled in favor of the assessor. He acted more in the capacity of a consultant rather than an appraiser, pointing out the weaknesses of the appraisal by the taxpayer and suggesting a method to get that point across. He did not draw his own value conclusion.

Often if the value conclusion is in serious dispute, I would think a forensic appraiser should be able to review the other appraiser's work within the scope of RE consulting rather than as Review Appraiser, but one might need to qualify an assignment within the scope of Std. 1,2 or 3,4.

I don't recall specific courses related to forensic appraising outside the Court testimony and condemnation courses.

 

[Oregon Doug]

CB - "Forensic appraisal" is sort of a misnomer. I have done some litigation support work over the years and refer to some of it as "Forensic Appraisal Consulting". See Ryan's post on LP siding as a classic case in point. A couple of cases I've been involved with went like this:

Mr. Green buys a new, high end home from builder (Mr. Black) that has LP siding.

During his period of ownership, Green is made aware of the LP siding settlement and gets a check for thousand$ to cover the cost of siding replacement. Siding dosn't look too bad, so Green uses the proceeds to buy a new car.

Green lists house with Randy Realtor who sells it to Mr. Brown without disclosing the LP siding.

Blind Willie appraises the house and fails to mention the LP siding.

Rainy season starts and the siding deteriorates - Brown gets ticked and calls Dewy, Screwem & Howe to sue everybody.

Dewy calls Forensic Frank to see if Willie and his E & O carrier can get sucked into the mess. Frank gets to review Willie's appraisal and testify that the appraiser is/isn't negligent and is/isn't culpable. Frank completes a "forensic appraisal consulting" assignment (note: no value is involved) and makes a whole lot more money than Willie ever did.

And so goes a day in the life of a "forensic appraiser". It's very detail oriented and each assignment can take forever. None of the other appraisers in town will like you if you do it but it is really a lot of fun and it sure beats doing those 2055's for the lenders. It's a specialized field and a difficult one in which to develop a client base (hint: talk with the loss prevention folks at your E & O carrier).

Oregon Doug

 

[Restrain]

I perform some appraisals to determine whether fraud was involved in a failed loan or whether it was simply bad judgement. Sometimes it is bad judgement, sometimes an appraiser relying on what is not an arm's length sale, and sometimes it is gross fraud. So far, I haven't had to testify but that's always a possiblity. The bottom line is experience is the key to doing this work. You have to take much more time, verify from more than one source the sales used, and be aware that you may have to defend your conclusions in court. Yes, it's much more fun and more lucrative but you have to be able to control your temper and handle yourself in an advisarial position.