Six month alternate valuation

[Lee Lansford]

I did an appraisal for an estate, with the date of death as the effective date of the appraisal. Now the attorney is asking me to "provide a six month alternate valuation of the property" and she provided me with a new effective date that is six months later than the date of death. Does she need a new appraisal? I know the appraiser with whom this law firm usually works and I think the attorney is accustomed to getting her results in cases like this reported in a letter format with varying degrees of supporting data. Is that okay?

You better familarize yourself with Standards Rule 2-2 (minimum reporting requirements) before you communicate this new appraisal.

"Does she need a new appraisal?" Of course.

 

[Howard Klahr]

Yes, it is a different appraisal report. Same property, but different effective date, perhaps different market conditions, comps, and etc.

Why? If the appraiser was truly competent to be performing appraisals for estate purposes they would have read publication 561 as well as other information disseminated by the IRS for performing valuation assignments and would have asked this question up front when engaged by the client. Then, at that point, one report with two effective dates could have been performed and contained entirely within one report.

Calvin - I know that you understand this. i was just using your comment to make a point.

I am a big advocate of residential appraisers performing non-lending work, as it is usually for a better fee and less hassle (no AMCs). However, please become familiar with the requirements necessary to perform these assignments. Just like Fannie Mae, Freddie Mac, FHA, VA, ERC all have different requirements, so does the IRS, your local value adjustment board, eminent domain assignments, etc

Please, for your own benefit, understand there is a whole world out there beyond filling out a form.

 

[Elliott]

Howard,
When I get a call for a charitable deduction, there is a pause and I say,
then it has to be done in accordance with Pub 561 and charge accordingly.

A house appraisal for an estate goes on the old 1004 form. A good old
USPAP report is adequate.

 

[Howard Klahr]

Elliot,

Your choice of reporting style is obviously your own, however, the old 1004 form does not conform to current USPAP standards without additions and modifications, but most importantly the definition of value is not correct for estate work.

Furthermore, there is more information in the old form that is not relevant to the assignment and rather than leave it out/blank, I just utilize a very brief narrative format. Now I can deliver a very professional looking report that allows me to differentiate myself from every other appraiser. (this is a very important marketing tip - differentiation)

 

[Calvin the Airedale]

Why? If the appraiser was truly competent to be performing appraisals for estate purposes they would have read publication 561 as well as other information disseminated by the IRS for performing valuation assignments and would have asked this question up front when engaged by the client. Then, at that point, one report with two effective dates could have been performed and contained entirely within one report.

Calvin - I know that you understand this. i was just using your comment to make a point.

I am a big advocate of residential appraisers performing non-lending work, as it is usually for a better fee and less hassle (no AMCs). However, please become familiar with the requirements necessary to perform these assignments. Just like Fannie Mae, Freddie Mac, FHA, VA, ERC all have different requirements, so does the IRS, your local value adjustment board, eminent domain assignments, etc

Please, for your own benefit, understand there is a whole world out there beyond filling out a form.

Howard, you are absolutely correct, however given the way the OP was phrased, it was clear this wasn't the case in this instance.

Another note about letter reports. When I came into this business a letter report meant something different than it does today, there were no reporting obligations (aside from professional society SOC & COE), no USPAP. Today, many think that calling a letter a restricted report gives them license to avoid reporting obligations of Standard 2.

When you're working for a client that you know will be using the report for such a purpose, unless you're doing a phased assignment for an attorney, you don't really have the option of providing restricted reports.