Liquidation Value Residential Appraisal

[JacksonCarter]

I got my first request for a liquidation value appraisal. So I thought I'd bounce it off some folks who have actually done some. Its for a client in a bankruptsy and its on a typical residence/neighborhood. I'm thinking a 30 day market period. The clients are represented by attorneys and neither seems to know much more than that they need a liquidation value. I usually use the GP form for divorces. Is there some other form? What about comps, are we talking about using REO and short sales and anything that's sold under 30 days. Thanks

 

[Lee Lansford]

Not specific to your question, but a suggestion:

Present to your client the definition of Liquidation Value that you will work with and have the client approve the definition for your use in the assignment.

 

[JacksonCarter]

Good advice, but what about how to do the valuation? Say they want a 30 to 90 day value. What does that mean. I use comps that fall into some kind of distressed format? Is there some sort of model I should use that breaks down days on market, list to sale values and figures in original list values? Thanks

 

[Michigan CG]

Good advice, but what about how to do the valuation? Say they want a 30 to 90 day value. What does that mean. I use comps that fall into some kind of distressed format? Is there some sort of model I should use that breaks down days on market, list to sale values and figures in original list values? Thanks

First of all be very careful. Are you working for one side of the case...why is a "liquidation value" needed for a bankruptcy? Are you being coached into a low value?

I am involved in two bankruptcy appraisals right now, one commercial and one residential. I am developing Market Value appraisals.

Additionally, who is your client? Most likely you should be the client of the attorney who will submit the appraisal into evidence.

Third, do you have a rock solid engagement letter that states what your Scope of Work is, what you are going to provide, how much the service is and how much you will charge for additional services like testimony and prep?

 

[Lee Lansford]

First of all be very careful. Are you working for one side of the case...why is a "liquidation value" needed for a bankruptcy? Are you being coached into a low value?

I am involved in two bankruptcy appraisals right now, one commercial and one residential. I am developing Market Value appraisals.

Additionally, who is your client? Most likely you should be the client of the attorney who will submit the appraisal into evidence.

Third, do you have a rock solid engagement letter that states what your Scope of Work is, what you are going to provide, how much the service is and how much you will charge for additional services like testimony and prep?

You, better than I, raised the concerns that the appraiser should have in entering into the assignment.

I would like to know more about the appraiser's client and the intended use of the appraisal--I suspect that something isn't quite right (as in "the client wants the opinion of value to represent 'liquidation value' but wants the definition in the appraisal to be 'market value'...if you catch my drift). I might be wrong.

 

[Michigan CG]

.....I might be wrong.

I think we are on the same page. I like litigation.....working for lawyers. As long as they are ethical. I see some red flags here.

 

[JacksonCarter]

I am being retained by both parties, but have only gotten confirmation from one of the attorneys. I have been dealing with attorneys for 10 years, more than 50% of my work with is with them (divorce) so I know they can be vague about what they want and how they request the appraisal. I'll nail them down on this one and on what they want. But I still need to know how to do proceed with a quick market valuation (liquidation value)

Thanks

 

[Michigan CG]

I am being retained by both parties, but have only gotten confirmation from one of the attorneys. I have been dealing with attorneys for 10 years, more than 50% of my work with is with them (divorce) so I know they can be vague about what they want and how they request the appraisal. I'll nail them down on this one and on what they want. But I still need to know how to do proceed with a quick market valuation (liquidation value)

Thanks

Talk to Realtors, brokers and market participants. Quote them in your report. If you live in a market like mine you will not be able to support anything with sales....and if you try, someone can discredit your results.

Talking to, interviewing and quoting Realtors who are respected in your community will give you credibility. Most think Realtors are experts in Real Estate.

 

[JacksonCarter]

You, better than I, raised the concerns that the appraiser should have in entering into the assignment.

I would like to know more about the appraiser's client and the intended use of the appraisal--I suspect that something isn't quite right (as in "the client wants the opinion of value to represent 'liquidation value' but wants the definition in the appraisal to be 'market value'...if you catch my drift). I might be wrong.

The report would clearly state liquidation value and explain the perameters of how the value was arrived at. And of course since both parties are paying for the appraisal it would have to be an agreed upon formula.

 

[JacksonCarter]

Talk to Realtors, brokers and market participants. Quote them in your report. If you live in a market like mine you will not be able to support anything with sales....and if you try, someone can discredit your results.

Talking to, interviewing and quoting Realtors who are respected in your community will give you credibility. Most think Realtors are experts in Real Estate.

But there are plenty of sales, both distressed and typical. Why not use a combination of both short sales, REO sales and a typical. And of course I always talk to the realtors so I'll note their input in the report.