Six month alternate valuation

[jabba]

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?

 

[Michigan CG]

The Ask an Appraiser section is for the general public to ask questions. I have moved your thread to the appropriate forum.

 

[Financially Feasible]

Is the new effective date in the future (prospective value) or is it between the DOD and today's date? If it's the former, then make sure to ExA yourself to death regarding future economic conditions, condition of the property, etc, etc. If it's the latter, you could just do a restricted use letter - just make sure that your workfile is just as packed with information like you were doing any other standard appraisal. I would also make sure to include a signed certification along with the letter, just to CYA.

 

[jabba]

It is a prior date. What would be a typical fee for a restricted use letter if I charged $425 for the original appraisal? Signed certification?

 

[Terrel L. Shields]

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?

New appraisal and the reason is they are hoping, praying that the value is LOWER...the market is tanking right? The lower valuatoin will reduce the taxes. Not uncommon, just as in a rising market, they will want the DOD report.

New assignment, new research, new value...even if it was the same...

Make sure your file contains all the information needed to pacify the IRS and a restricted report might not be the ticket....I'd just do a summary. And if they want a one page summary of the findings on Page 1 of the report.

 

[Calvin the Airedale]

It is a prior date. What would be a typical fee for a restricted use letter if I charged $425 for the original appraisal? Signed certification?

A restricted use report is one where the client and intended user (usually the same entity) possess special knowledge of the property and thus do not need all that is required of a summary report. While this may be the case for your attornery client, I assure you that it is not the case for the probate court, IRS or state estate tax authority that will be receiving a copy of the report and using the report as a basis for estate tax settlement. You cannot use a restricted report.

Why would someone want such a value? Because IRS allows its consideration, and because the value may actually be lower if market trends are declining.

Yes, it is a different appraisal report. Same property, but different effective date, perhaps different market conditions, comps, and etc. You may be able to craft a SOW that minimizes your inspection of the property (perhaps to an exterior with the EA that the home was in the same condition and finish as on your prior inspection date) but I would deliver nothing less than a summary appraisal.

If the attorney's normal appraiser wishes to play fast and loose with USPAP, that's his problem. Don't make it yours

 

[Elliott]

When an estate is facing valuations they get date of death and six months
forward. Since the stock market has dropped 50% in the last six months,
they are all requesting alternate valuations on stocks and real estate.

Of course, estate attorney's are always hoping they get low values to
reduce their clients taxes, but the 'real estate' isn't probably the big
issue now, since the big loss was probably stock and they can look
up its value in the newspaper. On most of the ones I've done, I
usually review the sales and write a letter saying there hasn't been
a change in the last six months.

 

[Calvin the Airedale]

When an estate is facing valuations they get date of death and six months
forward. Since the stock market has dropped 50% in the last six months,
they are all requesting alternate valuations on stocks and real estate.

Of course, estate attorney's are always hoping they get low values to
reduce their clients taxes, but the 'real estate' isn't probably the big
issue now, since the big loss was probably stock and they can look
up its value in the newspaper. On most of the ones I've done, I
usually review the sales and write a letter saying there hasn't been
a change in the last six months.

Seems appropriate enough assuming that there has been no change in value. But you do understand that you have performed a new appraisal and transmitted a new report, both of which are subject to the same USPAP standards as your prior assignment?

 

[Elliott]

On most of the ones I've done, I usually review the sales (and only charge
them 3/4 fee, usually takes me five or six hours, retain the 30 page
workfile) and write a letter saying there hasn't been a change in the last six months.

Am I USPAP compliant now?

 

[Calvin the Airedale]

On most of the ones I've done, I usually review the sales (and only charge
them 3/4 fee, usually takes me five or six hours, retain the 30 page
workfile) and write a letter saying there hasn't been a change in the last six months.

Am I USPAP compliant now?

Elliot, I was not suggesting you weren't compliant. My comments were made for the benefit of those inclined to provide letter reports. On their face such reports sound oh so easy and convenient, but the same reporting standards apply as for the big ones.