New Commercial AVM.hmmm.

[Roger Murdock]

I've often wondered if some types of commercial work lend themselves to evaluations or computer assisted reports. Since so much of commercial relies on the numbers, cash flow and leases and cost approach, if a research analyst can find the numbers and data, they have what they need to generate a report. That is one of the threats of the internet and the easily available data either for free or for sale. Of course commercial appraisers pride themselves on the narrative aspect, but if clients start to de value the narrative aspect, that becomes part of the mix.

Sounds to me like you haven't had much commercial appraisal experience. Numbers are a dime a dozen, but meaningful and reliable numbers require analysis, insight, and judgment.

 

[J Grant]

Sounds to me like you haven't had much commercial appraisal experience. Numbers are a dime a dozen, but meaningful and reliable numbers require analysis, insight, and judgment.

I recognize that. The same could be said for residential.

Was trying to point out, that if clients believe software or statistical programs can produce meaningful or reliable numbers with a limited amount of appraiser input for the analysis and judgment, such as an appraiser reviewing an AVM or evaluation, the data is out there and available.

 

[George Hatch]

Since so much of commercial relies on the numbers, cash flow and leases and cost approach, if a research analyst can find the numbers and data, they have what they need to generate a report.

SFRs have a single type of occupancy and use and sell based solely off of comparable sales prices. The quantity of comparable data and the similarity of that data to each other is as good as it gets in terms of analyzing for value. Sure, AVMs can handle SFR values under certain limited conditions but as soon as the analysis gets any more complicated than what a 5yr old can do they fall apart.

With commercial properties where there are so many fewer datapoints and so much less information and so much less conformity with respect to occupancy and use. Just the reduced number of transactions and scattered over a far wider market area is going to screw things up. And that's assuming there was such a thing as a commercial database you could actually rely upon to be accurate. Which there isn't.

There's literally no comparison between the two. If an AVM is useless on rural properties or any market segment with a wrinkle then that lack of uniformity is going to be multiplied several times over with many non-res property types.

 

[JSmith43]

OK, I got a solicitation for a "Commercial Desktop Evaluation" basically calling for a review of an evaluation plus an opining from the desktop of another opinion of value, for (drum roll) $175

Anyone doing these for that fee deserves the sympathy of striking McD workers.

I think they should go the BPO route, but what commercial broker would do these without realistic prospects of other benefits such as a listing?

 

[Michael S]

I completed a desktop evaluation recently using a restricted report. The subject was a newer owner-user restaurant. I already had the data from a few other recent restaurant appraisals so it was a pretty easy job. The lender had a person go take pictures which I used in my report. I was already familiar with the area and the comparable sales and essentially they just wanted 3-4 sales and a final value. Luckily I went ahead and got a copy of the plans from the owner because the building area the client provided was about 5-10% smaller which would have lowered the vale from about $300,000 to $275,000 if I had relied on it. It was a case where the borrower had an existing loan with a low loan to value and the lender needed a cheap way to make sure they were still covered. Considering how quickly I was able to complete it the fee worked out to about the same as I would normally bill on a summary or self-contained report.

 

[JSmith43]

I have done plenty of "plans & spec" appraisals over the years where the plans received did not conform to the physical reality of the completed improvements.

It is still a crap shoot.

What happens quite a bit is that last minute changes are often handled by marking up changes on field copies of the plan. If asking for the plans a year or more down the road, the on the fly changes are distant memories, at best & the plan you get may or may not get the mark ups.

 

[David S. Roberson]

It says it's not an appraisal, but at the bottom of their form it says "Value Estimate:
$760,000.00"


"Quack quack, waddle waddle"

 

[J Grant]

I believe that appraisals provide opinions and valuations provide value estimates?

 

[Doug DeMars]

This idea that non "appraisers" are not appraising is nonsense. If we just instead call the final answer an "evaluation" or BPO...or whatever "it" is deemed to be called. "It" somehow magically no longer becomes an appraisal? If it looks like a duck...smells like a duck...craps like a duck...its a duck.

Advocacy? Does that draw the line in the sand?

 

[Lee Lansford]

As a point of interest to some, in Illinois, when an appraiser provides an "evaluation" the appraiser must comply with USPAP in its entirey (including, but not limited to, Standards Rules 1 & 2).