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Listing History

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Paul Isolda

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May 20, 2004
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Certified Residential Appraiser
State
Connecticut
I am doing a retrospective appraisal as of a date of death which was August 2007 and for estate purposes. Between the date of valuation and the date of inspection and report date, the property was listed for sale. I reported this information and the attorney wants me to remove it. USPAP does not specifically cover this issue as far as I can see.

http://commerce.appraisalfoundation.org/html/USPAP2008/USPAP_folder/standards/Standards_Rule_1_5.htm

Having done these before, I know as a practical matter, the IRS does not cut off all data analysis as of the date of valuation. They will certainly look at the property being listed for sale after the date of death. The attorney tells me it is not a taxable estate and will not be picked apart by the IRS. I feel I have to meet a certain standard for all estate appraisals that will be acceptable and defensible to an IRS review, regardless if the client tells me the estate is not taxable.

I could add verbiage to the report reiterating the fact that the listing occurred well after the date of valuation and is not pertinent to the value but is reported because it is factual data that occurred prior to the report date. Or, maybe I could remove the information and add verbiage to the listing and sale history section (or maybe the limiting conditions section) that all sale and listing information is as of the date of valuation and all data beyond that date is not being reported. What do you think is the appropriate way to handle this?

 

Randolph Kinney

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Apr 7, 2005
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Retired Appraiser
State
North Carolina
It goes to the SOW of the client's needs and intended use, intended users.

Listing the property for sale after the date of death really does not bear on the value as of the date of death.

I agree with the attorney.
 

Paul Isolda

Thread Starter
Senior Member
Joined
May 20, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
That's fine but how would you deal with this in the report. I absolutely will not ignore it completely. Would you then state that the listing history does not include information after the date of valuation and where in the report would you put that. With the listing occurring well before the date of my report, completely ignoring it is not an option IMO.
 

Lost Cause

Senior Member
Joined
Sep 17, 2004
Professional Status
Certified General Appraiser
State
New York
...then state that the listing history does not include information after the date of valuation...
I have had little experience with retrospective valuations, but including such a statement seems reasonable and sufficient to me.

As to where in your report would be appropriate, that would depend on how you are reporting your appraisal. Assuming it is being reported on a Fannie form, I would include the statement in the addenda and reference it in the section of the form devoted to contract information.
 

Paul Isolda

Thread Starter
Senior Member
Joined
May 20, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
Thank you JH, I have actually done a narrative. I could either put it with the listing and sale history or in the limiting conditions. I'm thinkng listing and sale history is better.
 

Don Clark

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Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
STD 1-5(a) rules. You must comply with the version of USPAP in effect as of the actual date of the appraisal, not the retrospective date. This is a USPAP issue, not a SOW issue.

If it was not listed as of the retrospective date, which is the effective date of the appraisal, then you need not comment on what happened after that date.
 

Paul Isolda

Thread Starter
Senior Member
Joined
May 20, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
But I take that USPAP statement to mean that only information prior to the date of valuation is necessary to report. If that is correct, and I believe it is, omitting the information will not take me out of USPAP compliance. But, I am aware that the IRS does not simply cut off all data as of the date of valuation. I still want to meet the practical standards I know the IRS will apply.
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
I would think it to be important info to further support your opinion of value depending on how long after the DOD the property was listed. For example lets say your value opinion was $500,000 and then six months later in a relatively stable market the property was listed for $350,000 and sat on the market for six months with no offers, that would not support your value opinion. Based on what the market is doing, and the results of the listing after the DOD, it should all fit together and then would further support your resulting value opinion.
 

Craig Farr

Junior Member
Joined
Sep 26, 2004
Professional Status
Certified Residential Appraiser
State
Arizona
I can see absolutely no reason to include that information. It is data AFTER THE FACT. The attorney is correct.

Sure, the IRS might, and does, consider data "somewhat" after the date-of-valuation, but it must be relevant.

How can a post-valuation-date pricing (listing) be relevant? What if the market tanked right after the date of death (which it was likely doing).......wouldn't the listing reflect THAT deteriorated market? If so, how could one consider such data applicable to a pre-valuation-date market?

And it is just a listing. Those are often jokes, depending on the listing agent. Thus, inclusion of that post-valuation-date listing data may actually be MISLEADING which is a violation of USPAP.
 

Paul Isolda

Thread Starter
Senior Member
Joined
May 20, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
This is an extremely high priced property, 8 figure value. My value estimate is about half of the current asking price. I always prefer to answer questions before they're asked. For another intended use, I would agree with Mr. Farr but knowing how the IRS operates, they will be aware of the listing and will expect me to know of the listing. The listing price is a joke but if they are looking for a high value for the property, they will take it seriously. I don't see any way to ignore it and I think it would be an obvious omission from their perspective. I do not believe that including the listing information would be creating a misleading report. It's factual data, a price but not a value. Have you done reports that have or could go to the IRS because I think if you have then you would not be asking "How can a post-valuation-date pricing (listing) be relevant?".
 
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