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Stigma

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Walter Kirk

Thread Starter
Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
I just received an order for an appraisal of a property that was damaged by water from an improperly constructed drainage system. I have an estimate of repair costs but I need direction in how to assess the stigma of the now corrected drainage problems. Can anyone suggest a text or article about this type of problem?
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
I just received an order for an appraisal of a property that was damaged by water from an improperly constructed drainage system. I have an estimate of repair costs but I need direction in how to assess the stigma of the now corrected drainage problems. Can anyone suggest a text or article about this type of problem?

Mr. Kirk,

Unless you are dealing with a widely known, historically, poor drainage system, I am having a hard time with viewing a now corrected drainage issue as causing a "Stigma." Are you sure you have an intangible market condition as a result?

Tell me, are all real estate brokers going to have to screen all prospective "buyers" in order to filter out the curious and thrill-seekers? Thereby preventing traditional advertising techniques for selling the property? Are there absolutely no comps available via typical sources? If the answers are no, no, and no..... I doubt you have a stigma.

Webbed.
 
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JRS at OBX

Elite Member
Joined
Jun 13, 2006
Professional Status
Certified Residential Appraiser
State
North Carolina
If it was just water damage and it was properly remediated, there should be no stigma. If there was severe mold, that might be a different story.

I've seen severe water damage to houses. Serv-pro or some similar company would come in and do their thing, a month later you couldn't tell there was any damage.

I've seen mold go both ways. Minor mold that has been remediated there probably isn't a problem.

I had one house when I was an insurance adjuster, the lady left for over a month and her ice maker water line broke. Water was flooding the house for a month!! Mold was creeping up the legs of her furniture, the drywall had turned to black and green mush. If I ever get a request to appraise that house, I'll run away!! I'm sure the house is fine now, the mold remediation team knew what they were doing and it cost an arm, leg and about 50,000 of Ray's beaver pelts. I still don't want to mess with it.
 

Walter Kirk

Thread Starter
Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
The stigma results from press coverage of the problems in the subdivision and from the disclosure of the situation which will be required upon sale.
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
The stigma results from press coverage of the problems in the subdivision and from the disclosure of the situation which will be required upon sale.

Mr. Kirk,

You may be getting no responders on this one for many reasons. One is you are not being very clear. When you say press coverage of problems in the subdivision, what problems exactly? How much press coverage? Was the "drainage" issue within only the subdivision caused by the developers or outside of the subdivision affecting the subdivision? Was the problem ever actually located on the subject site or only affecting the subject site? Your saying the problem has now been remediated. Did this not receive any press coverage? Is there no proof it has been?

If this affected an entire subdivision, why are you not simply restricting your comparable search to that subdivision? Then any "stigma," if real, would be inherently reflected in the sales data.

Webbed.

P.S. You show as "licensed." If you really have a stigma then this is a complex appraisal assignment .. If that transaction value is over $250,000 you may have a scope of practice problem in licensing.
 
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Don Clark

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Mr. Kirk,

You may be getting no responders on this one for many reasons. One is you are not being very clear. When you say press coverage of problems in the subdivision, what problems exactly? How much press coverage? Was the "drainage" issue within only the subdivision caused by the developers or outside of the subdivision affecting the subdivision? Was the problem ever actually located on the subject site or only affecting the subject site? Your saying the problem has now been remediated. Did this not receive any press coverage? Is there no proof it has been?

If this affected an entire subdivision, why are you not simply restricting your comparable search to that subdivision? Then any "stigma," if real, would be inherently reflected in the sales data.

Webbed.

Agreed. Stigma can be a perception or it can be an actual physical thing. We need to know which one it is, and why? Example: Rock Hudson(the actor) died of Aids. His house sold for millions less than market value. Why? The perception of Aids. But, people have Aids, not house. Did not matter. It was the perception that cost his estate. Physical. Many homes in the past several years that had EIFS siding would not sell or sold for less than market value. Why? The real fact that many if not most had moisture damage as the EIFS did not allow for the wood framework to "breathe" and as moisture collected, it deteriorated the structural elements of the house.

Which type of "Stigma" is involved here?
 

Walter Kirk

Thread Starter
Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
Dear Webbed,
The problems are with the subdivision and with another subdivision built by the develpoer in an adjacent township. There have not been enough resales to determine market reaction. In addition the subject actually had water damage. I need a reference to books or articles about stigma.

As to my license level, I have been an appraiser for over 25 years. I passed the certified test 1n 1991 but the N.J. board has insisted that I pay an unnecessary fee to change to certified ( I have discussed this situation on this forum). I am an experienced expert witness and have also been a tax assessor. I know what I'm doing, I want to learn more before I start this assignment.
 

DWiley

Elite Member
Joined
Apr 4, 2007
Professional Status
Certified Residential Appraiser
State
Tennessee
I had a similar assignment a few years ago. I got some great data from the water department. It turned out that they logged other homes with similar issues. I was able to analyze subsequent sales to see if there was any long term affect. It might be worth a shot.

You might also research the AI's Lum Library.
 
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Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
Mr. Kirk,

I am sure myself and others will try and find out some reference sources for you. But with all due respect, when it comes to being out of scope of one's license (or practice) your board probably will not care if you have 96,534 years of experience and testified before King Solomon! So once again, if your state has licensing laws like my state does, if your board deems that a complex assignment, if the transaction value is over $250,000.... if a board complaint results for any reason. You will be found to be out of scope of your practice due to inadequate licensing for the assignment.

It's not a matter of how qualified you are. I mentioned it because sometimes the matter slips peoples minds. Leaving them with the "Duh, I forgot" defense. ;)

Webbed.
 

Patti Jury

Senior Member
Joined
Mar 23, 2002
Professional Status
Licensed Appraiser
State
Colorado
Walter,

Check with your local Regional Building Dept.
They may have more info as to recent problems and repairs.

I could make a comment on recent posts by a certain duck..but anyone that has to hide their identity...has to hide it for a reason...so I would take their comments with nothing more than a grain of salt!

Call it a "Stigma!"
 
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