Max house value for accepting a residential appraisal

[J Grant]

It's all about the comps. Some high-value property assignments are fairly straightforward, while others can be a nightmare. We face the same problems as on any appraisal but on a bigger scale. A ten-million-dollar property - if you are not comfortable making a 500k adjustment (if warranted), then don't do it.

 

[Mike Ault]

Those with over $10 million in assets.

Okay, describe a scenario where a homeowner with a $10 million home would suffer a $10 million appraisal related loss for us.

 

[Fernando]

MSN

Kim Kardashian sparks outrage after records of newly purchased land surface online: 'At what point is someone happy?'​

Keeping up with celebrity real estate moves can often leave average homeowners confused. Kim Kardashian's recent purchase is no exception: a large home right next door to her current estate. Some see the reality star's excess as abusing sustainability in the housing market.

According to TMZ, Kardashian closed on the neighboring property for $7 million. The 4,945-square-foot home features four bedrooms, five bathrooms, and a spa. This is an expansion of her already palatial Hidden Hills compound that is undergoing renovations.

I WOULDN'T MIND APPRAISING HER PROPERTY SINCE SHE'S A BILLIONAIRE (THAT'S THE EXCEPTION WHEN OWNER HAS SO MUCH MONEY).

 

[Fernando]

Okay, describe a scenario where a homeowner with a $10 million home would suffer a $10 million appraisal related loss for us.

This is from Co-Pilot:

Why Wealthy Owners Lose Value on Mansions​

Luxury properties are uniquely risky because:

1. Tiny Buyer Pool​

Only a handful of people can afford a $10M+ home. If demand softens, values drop fast.

2. High Carrying Costs​

Taxes, staff, landscaping, repairs — a mansion can cost hundreds of thousands per year to maintain. If neglected, value plummets.

3. Market Cycles Hit the Top End First​

Luxury markets are the first to fall and the last to recover.

4. Over‑customization​

Wealthy owners often build highly personalized estates that few buyers want.

5. Legal or financial trouble​

Bankruptcies, divorces, or estate disputes can force distressed sales.

 

[Mike Ault]

This is from Co-Pilot:

Why Wealthy Owners Lose Value on Mansions​

Luxury properties are uniquely risky because:

1. Tiny Buyer Pool​

Only a handful of people can afford a $10M+ home. If demand softens, values drop fast.

2. High Carrying Costs​

Taxes, staff, landscaping, repairs — a mansion can cost hundreds of thousands per year to maintain. If neglected, value plummets.

3. Market Cycles Hit the Top End First​

Luxury markets are the first to fall and the last to recover.

4. Over‑customization​

Wealthy owners often build highly personalized estates that few buyers want.

5. Legal or financial trouble​

Bankruptcies, divorces, or estate disputes can force distressed sales.

None of those sound like appraisal related losses to me. They sound like evidence for the defense.

 

[George Hatch]

MSN

Kim Kardashian sparks outrage after records of newly purchased land surface online: 'At what point is someone happy?'​

Keeping up with celebrity real estate moves can often leave average homeowners confused. Kim Kardashian's recent purchase is no exception: a large home right next door to her current estate. Some see the reality star's excess as abusing sustainability in the housing market.

According to TMZ, Kardashian closed on the neighboring property for $7 million. The 4,945-square-foot home features four bedrooms, five bathrooms, and a spa. This is an expansion of her already palatial Hidden Hills compound that is undergoing renovations.

I WOULDN'T MIND APPRAISING HER PROPERTY SINCE SHE'S A BILLIONAIRE (THAT'S THE EXCEPTION WHEN OWNER HAS SO MUCH MONEY).

In our line of work positive bias is just as evil and corrupt as negative bias.

 

[Fernando]

MSN

Kim Kardashian sparks outrage after records of newly purchased land surface online: 'At what point is someone happy?'​

Keeping up with celebrity real estate moves can often leave average homeowners confused. Kim Kardashian's recent purchase is no exception: a large home right next door to her current estate. Some see the reality star's excess as abusing sustainability in the housing market.

According to TMZ, Kardashian closed on the neighboring property for $7 million. The 4,945-square-foot home features four bedrooms, five bathrooms, and a spa. This is an expansion of her already palatial Hidden Hills compound that is undergoing renovations.

I WOULDN'T MIND APPRAISING HER PROPERTY SINCE SHE'S A BILLIONAIRE (THAT'S THE EXCEPTION WHEN OWNER HAS SO MUCH MONEY).

Sound like Kardashian got a good deal not that I know her neighborhood.
For 5,000 sqft in high end towns here, $7 million is not that expensive (and not that nice sometimes).
I think I would enjoy appraising high end homes in LA and meeting celebrities.

 

[Mike Ault]

Sound like Kardashian got a good deal

You just performed a $7 million appraisal. Better notify your E & O to expect some trouble…

 

[gregb]

I think I would enjoy appraising high end homes in LA and meeting celebrities.

You would not be meeting any celebrities. Use the service entrance and get handled by the PA or handyman!

 

[glenn walker]

Who would actually suffer a $10 million appraisal related loss on a $10 million home? Nobody.

Not the value of home but many use 1/4 of values so if your doing $10 million Beverly Homes Estates $2.5 million E & O policy and many high end lenders require you to carry minimum of $3 million.

The risk is higher because folk's like buyers and sellers tend to be wealthy
and even litigious versus the average working folks so the appraisers liability goes way up.

The beauty is to add a few million to most policys is not much money BUT YOU MAY notice on your next E & O Renewals it will ask you if you do assignments over $zzz