Form 71B

[CVal]

Hello,

I have an appraisal request for a mixed use, commercial on first floor and residential above. They also sent a copy of a prior report. It was done on a 71B. I never did mixed-use on the 71B but thought I'd ask about some of your experiences. I thought 71b was just for residential.

 

[Pittsburgh Pete]

Hate forms--always found it easier to go narrative. The forms require so much explanation outside of the boxes that a narrative is infinitely easier.

 

[CVal]

I agree. Seems to be competitive in the Chicago area for this type of property. The guy who did the 71B did it very cheap, which was unexpected, as it came out of a larger, semi brand name appraisal firm.

 

[nstanbru]

If the client is requesting a form report, and you're OK with using one, I would suggest a GP Commercial form. for this property type.

 

[Scott.A]

I've never heard of a 71-B. What is it?

 

[Stephen J. Vertin MAI]

"did it very cheap, which was unexpected, as it came out of a larger, semi brand name appraisal firm"

Welcome to the new normal. National companies or as you put it "semi brand" name appraisals (which I will call firms) have grown from 1 (in 1980) to 20 or 30 today. Even in Chicago, this is ridiculous. Prices are being driven down so low, I for one did not believe these companies could stay afloat for over a year but it has been a blood bath since the start of 2017 and continues today. Like so many companies today they have cheapened the brand by trying to write assembly line reports and many of the larger lenders here are noticing the folly. I am sure they are trying to capture market shares that have mostly gone dry but to each his own. The Chicago commercial lending market has been at a crawl going on 3-years and as the population of Illinois continues its decline there are not a lot of green pastures. I am with you forms suck but so does a lot of lending work out there currently.

Yes, years ago we appraised mixed-use buildings, all the time, on these forms. Just count each of the commercial spaces as one unit, use comps doing the same and adjust for any factor you believe relevant. It works well.

 

[pbidwell]

The 71-B is a very old multi-family form. For certain specific purposes, I have used it only for multi-family properties. I have never used it for mixed-use properties. It was not intended to work that way in terms of rental analysis. In a major metro market like Chicago, it doesn't surprise me one bit that something that is circular in shape is pushed through a square hole.

 

[gregb]

I have seen both the 71A and 71B used for multi-family properties that also include some mixed-use, such as a retail store or hair salon.

 

[Stephen J. Vertin MAI]

Bidwell; welcome to the forum. Contrary views are accepted, it is part of being opinionated and luckily we get to do it for a living. There are a lot of smart appraisers in Chicago, and personally I would not paint them with a broad brush, I am sure you can find someone in the City who agrees with you. With that said, I ask any of you to show me an authoritative source claiming its use "is not intended to work that way." Thank you again for your input.

 

[George Hatch]

I don't use the 71b, but I do use a form (of my own design) for most of the apartment appraisals I perform, up to maybe 30 units. It's a variation of the commercial report format I use, which itself is an updated evolution from the UCISAR that TAF developed back in the 1990s. Nobody will be finding any omissions or obsolete USPAP references in any of my reports because I control the format.

I've been using this suite of appraisal "forms" for most of my clients for 12 years now and I've never gotten any user pushback on it. I have variations that I use for SFRs, land, commercial, and multi-family, and they all share the same layout.

I should mention that the 71b is only 4 pages long, not counting back-n-forth addenda; whereas my multi-family format is 11 pages before the housekeeping and addenda. It reads front-to-back like a narrative so all the content goes into the main body of the report. I can add/delete sections or expand any of these sections as much as I want to - which I sometimes do.

Not counting the mixed use properties I've appraised, I've done 14 of the multi-family assignments this year, which is probably typical for me. I think I've only written maybe half a dozen narratives this year, and most of those were because the assignment type had too many moving parts or otherwise required far more discussion than would fit in a structured format. Most of the mixed use properties I appraise are small properties and I put those on my commercial form.

Different strokes.