SOW question

[chicago guy]

I have been doing primarily mortgage work and received a referral for a couple of properties for an individual. When talking to potential client he said he "just wants to know what they are worth". I figure, lucky day, 2 properties, COD and do them on a GPAR. Then when talking to the person that referred me I got the impression that the client may be using these appraisals to appeal his taxes. My question is do you think I can take the client at his word or should I investigate further and if it is indeed for tax work refer him to someone that specializes in this work? Would my SOW be different for tax appeal be different or just intended user?

 

[Paul Isolda]

There is always a reason someone wants an appraisal, it's not because they want to pay for something they don't need. When I get the answer "just to know what they are worth", I always dig deeper. If they are for tax appeal purposes, it would probably be best if you referred the client to someone who knows the in's and out's of doing that kind of work.

 

[AnonApprsr]

Ready? This is so simple and I'm so happy I can help you:

Under Scope of Work simply put: The purpose of this appraisal is to develop a reasonable market value for the Subject property as of the effective date of the appraisal.

Now, I don't know if that alleviates your worries regarding liabilities.

 

[Tim Schneider]

You need to check with the taxing authority to find out what they need for tax appeal appraisals. Many require the effective date to be a certian date. The SOW would be different in many cases since one would be retrospective and one would be current. He is probably saying that because he thinks it will be cheaper, or that you are in cahoots with the taxing authority (many people think this).

 

[chicago guy]

Thanks for both points of view. I guess my question is what would be different about the two intended uses? My value would not be different regardless of the intended use. The value would be what it would be and if that helped or hindered my clients position is not my concern. I believe I would be providing an objective opinion of value. Am I missing something? Does this type of report, if I do find out it is for a tax appeal, typically belong on a different form or does it somehow increase my liability?
I guess the fact that I am asking these questions leads me to think I should pass on it, but as of now I just have a potential client asking me for an opinion of value.

 

[Hamlet]

I agree with Paul, you need to know the intended use of the appraisal. There have been a few threads on tax appeal appraisals recently that you may want to read.

 

[Lee Lansford]

I have been doing primarily mortgage work and received a referral for a couple of properties for an individual. When talking to potential client he said he "just wants to know what they are worth". I figure, lucky day, 2 properties, COD and do them on a GPAR. Then when talking to the person that referred me I got the impression that the client may be using these appraisals to appeal his taxes. My question is do you think I can take the client at his word or should I investigate further and if it is indeed for tax work refer him to someone that specializes in this work? Would my SOW be different for tax appeal be different or just intended user?

Talk to your client and impress upon him the importance of you having awareness of the Intended Use of the appraisal. If the appraisal is for use in a tax appeal matter, you will likely identify the taxing body as an additional IU...and such would obligate you to address their needs in your report of the appraisal.

 

[LuckyLucy48]

Your value might very well be different.
Tax appeal appraisals are based on the sales available in the year for which the appeal is being made.

T

 

[Mike Boyd]

Thanks for both points of view. I guess my question is what would be different about the two intended uses? My value would not be different regardless of the intended use. The value would be what it would be and if that helped or hindered my clients position is not my concern. I believe I would be providing an objective opinion of value. Am I missing something? Does this type of report, if I do find out it is for a tax appeal, typically belong on a different form or does it somehow increase my liability?
I guess the fact that I am asking these questions leads me to think I should pass on it, but as of now I just have a potential client asking me for an opinion of value.

I agree with you, Chicago. In MY area it does not have to be as of a specific date, it just has to be a reflection of CURRENT market value. Therefore, not a retrospective.

 

[Mike Garrett RAA]

Almost always an appraisal for an assessment appeal will have a retrospective date. Find out what the base period is. As an example, the assessor may set an 18 month period prior to the last day of last year as the base period. Your sales (comps) would be from that period and your date of value would be the final day of the base period. Clear as mud?