Hypothetical Or Extraordinary Assumption?

[Farm Gal]

Greg:

innit wonderful how two people can read the same words and for the lack of a comma, colin, or semicolon read a phrase entierly differently?

...and even more wonderful that we have this forum to hash out the finer meaning(s) of interpretation

The weight of such statements/definitions places the more probable closer to the defined word... besides... I was given a different interpretation of the intended meaning of the last part of that definition

Soooo, I see what you are attempting... :blink: but entirely refute your interpretation...

Hypothetical conditions assume "conditions contrary" to known facts
1: about physical, legal, or economic characteristics of the subject property; or
2: about conditions external to the property, such as market conditions or trends; or
3: about the integrity of data used in an analysis.
I was told that the last was inteded for use when one had limited data on complex comparables... NOT on the subject property, excepting when the case was projected rents and such for a proposed construction or prospective value situation!

so my point is that the last bit is in MY opinion a much weaker arguement than Pam (and my) solution: do all the detective work you can about the REAL situation, and use it with appropriate EA disclaimer cause you have no reason to beleive it is FALSE...

instead of stating (by use of your selected choice of ASSumptions) that it IS _false_ but assumed for the sake of arguement :blink: .

see what I mean?

Be an advocate for your own work and conclusions, do the homework (and charge accordingly for your services) so that you can have reasonable basis for your ASSumption on which you base your value!~ and if that means playing detective so be it . Either do your own background checks OR get the court (or cleint) to CLEARLY specify what the assumptions should be.

You are just the 'valuer' _not a witness nor an expert witness as to teh actual condition as of the effective date!

I think you take on more liability 'creating' false assumptions WHICH ARE STATED AS SUCH, than just writing the scope out so that any idiot knows where you got your ideas from and that if your idea of what it was then is overthrown that the value service is no good/null/void!

 

[Ben Vukicevich SRA]

Do it under an EA that it was a shell.

Appraisers aren't detectives. All you have is hearsay evidence as to condition. Let the laywer bring forth or depose witnessess as to the subject's past condition.

 

[Walter Kirk]

Thanks everyone for your input. I have decided to make the extrodinary assumption that it was a shell and to depend upon the seller's description of the interior.

 

[xm39hnu]

Let me take a crack at this:

During the observation of the subject, the appraiser noted the house to be in average condition for a property of its actual age. This observation was conducted well after the effective date of this appraisal. The present owner stated in an interview that at the time of purchase (5/10/03), the walls and ceiling were completed with drywall, but lacked painting; there was no floor covering in any of the rooms; there were no appliances installed, except for HVAC. All doors and windows were installed and operating properly; and all exterior finish items, including landscaping, were complete. The seller of the property described the property similarly, as did the real estate sales agent, except that the agent overstated the gross living area of the property. The multiple listing service listing for this sale did not note any of these condition items, save to say that the subject house was a "handyman special." This retrospective appraisal is developed under the extraordinary assumption that the subject property was, on the effective date of the appraisal, in the condition described by the owner and verified by the seller and real estate agent. Transcripts of the interviews conducted are available in the appraiser's work file. The descriptions given by the parties serve as the basis for this assumption, since there is no affirmative evidence to the contrary.

What do y'all think?

Edited (forgot the important part): Should evidenced be disclosed at a later time which shows this assumption to be false, the value opinion developed herein could be significantly affected. The appraiser has used the best information available in arriving at this assumption. Should further analysis be required by virtue of new evidence, an additional fee will be incurred.

 

[CANative]

Lee Ann... read the posts. I was among the first to recommend doing it the EA way. I was just playing around with words and legal mumbo jumbo and having some fun. If you do it the HC way you can claim you're neutral about whose lying but here's my opinion about what you asked: How much was a shell worth at that time.

 

[JSmith43]

Jim's example is good. I wonder if anyone else thinks the term "extraordinary assumption" is pejorative in the common usage sense? Don't you think the word sounds like you made up a whopper to the average person on the street?

Since it isn't necessary to use the term Extraordinary", why not just use the term assumption, perhaps in bold, and flesh out the assumption. After all, the intended audience includes the jurors, so to put this in the most clear terms to all concerned as possible is important.

 

[Farm Gal]

Greg:

Play around all you want but make sure any advice you offer on this forum is well grounded in appraisal theory AND LOCAL PRACTICE... dissecting such theroy and practice where the unwary may read it as gospel made me come back and write MORE and MORE and MORE sall your fault you know


Roger:

an appraiser shoudl use the tools available...

Because of : SCOPE!!! Who is the intended user and what is the intended use of the report.

The terms EA and HC have specific defintion and use in appraisal practice... a PRUDENT APPRAISER in the development of an appriasal for use by a court would specifically define the technical terms being used and clarify why those specific terms were used to develop the report... and to describe any atypical situation which led to the need for use of the terms.

~~~~~~~~~

now having said that we do use a lot of assumptions which could ALL be termed Extraordinary...

We ought to save the big technical labels for places where they are really needed to draw a readers attention... and CYA with any later reviewers or hostile opposition expert witnesses...

I for one would hate like heck to have to draw on memeory for the precise definition of EA while sitting on a stand. IF it is included in my report I coudl reference it, the reader would see it (if not understand all the finer points) and I'd be covered if the hostile opposition wanted to know whyI didn't use a standardized term in the circumstances described!

 

[JSmith43]

I for one would hate like heck to have to draw on memory for the precise definition of EA while sitting on a stand. IF it is included in my report I could reference it, the reader would see it (if not understand all the finer points) and I'd be covered if the hostile opposition wanted to know why I didn't use a standardized term in the circumstances described!

Good safety tip. I would recommend having a (more fleshed out than for normal work) summary of conditions and definitions-containing anything I might want to reference during questioning. My suggestion was to not emphasize the term while communicating to the masses, so to speak

I also wouldn't dwell on the fact that you might have a summary report in your hand and that you did a complete report, for instance :blink: Stuff like that would be a good tactic for an attorney to use that wanted to discombobulate an appraiser in the eyes of the jury. USPAP has so many gems in it for an attorney to exploit

 

[Ben Vukicevich SRA]

Walt doesn't have to prove anything as to condition or even investigate condition, if he wishes not to do so. Actually, it may be detrimental to even do so as all Walt would have is hearsay evidence.

He appraises it as per the instructions of the lawyer (assuming a shell condition) then lets the lawyer via witnesses/depositions prove the "shell" condition. Condition then matches condition in the appraisal via witnessess.


Ben

 

[Farm Gal]

Ben:

I see your point and it is a valid one, however the instructions of a legal advisor can land you in purgatory if not steer you directly to hell... either detination being defined in MY book as being ripped by an opposition lawyer with little reasonable respone at my disposal!

Soo given the mandate not to perform appraisals in either a careless or misleading manner and given the intended use of the report... methinks due dilligence would include 'best effort' to ascertain hrough interview or photographic evidence to the highest extent possible EXACTLY what condition the place was in as of the effective date!

I am always amazed at how much I can learn about a property by talking to two/three individuals who looked at it... their focus is often different and the picture as a whole is often pretty clearly what can be seen in an on-site performed later...