My new one for this year

[Dale Smalley]

Mike
I would give more weight to an AVM than the Cost approach. The depreciation is usally a guess and the land value is backed into.. excuse me... extracted from improved sales.

 

[Mike Garrett RAA]

Ahhh, yep....extracted! Guess I teach too much..just spent 6 hours on the cost approach.

 

[John Hassler]

Tim

I don't see a USPAP problem with doing a five unit building with only a residential licence provided you:

1) OK it with the client

AND

2) you have (or get a mentor who has) the competency to complete this type of assignment.

If I'm wrong about this I'me sure somebody will let me know. This would be a good way to get some commercial experience.

John Hassler

 

[Farm Gal]

8O
John:

I would RATHER reccommend that the appraiser consult his/her state licensing board as regulations vary by state (to some extent).

In some areas it IS permissible to take on an assignment of that nature but disclosure to the client is required, and insurance of competncy is likewise required. AND a sign off by someone with a more comprehensive license may also be required.

 

[Steve Owen]

Tim, I won't get into all of the above discussion (except to say that Mike is right). The real question is whether you can do the five unit property on a URAR with a residential certification. The best answer was the first, Terrel's. However, I have one additional thought for you. First, if you are interested in this business, then why not contact another appraiser who is competent and ask him to work with you on the assignment. Secondly, if you are not interested in the business, then why not refer your client to another local appraiser? I do this several times a week, and I get referrals from them, in turn. Everyone ends up with the type of business they like to do the most, and the clients are better served.

 

[Carnivore]

OK, someone help me out here.

I thought we were supposed to appraise to the highest and best use.

So how do you appraise an income property by invoking the departure rule for the income approach? For the cost approach.

Secondly, How do you determine which sales of income properties were sales as a result of a buyer not considering the income stream.

I am confused guys. Maybe one of you bright Gals can answer the question within the bounds of sound appraisal practice.

 

[Tim The Enchanter]

The depreciation is usally a guess and the land value is backed into.. excuse me... extracted from improved sales.

And that's where the usefulness of the cost approach falls right to the ground. But in many areas you have no comparable land sales, or even teardowns that were for land value less cost of scraping. So what can you do. :roll: