SWOT analysis

[tsiegel]

I have a client that is now requiring a swot analysis in all appraisals. This mildly annoying (just because I don't need even more things required of me), but I generally like the idea of completing a SWOT analysis. Does anyone have a template for such a thing that they have had good success with? I am hoping to make it pretty succinct.

 

[KHS445]

I hope you charge them double or more your normal rate. SWOT analysis is fine, but if you thing about it that is basically what your appraisal should be doing. The only real difference is the wording. Actually one could argue quite successfully that a well written Highest & Best Analysis is a SWOT analysis.

The real question for any appraiser doing this type of analysis is, are you qualified?
What would be the agreed upon parameters?
How far forward or back in time should you consider?
What should be the physical boundaries? The neighborhood, the marketing area, the City, the County, the State, the Country, the industry, etc.?
My guess is some of the scope determination would depend on what you are appraising. A four unit apartment building would be a lot different than say a nation wide Dollar Store.
What weight do you assign to each category?
Can you predict the future of interest rates, buyer preference, new competition, another Covid or similar outbreak, etc.?-
Will you conclusion agree with your appraisal summary? Probably should.
Will the client provide you with a hold harmless if your SWOT analysis turns out to be inaccurate?
What is your liability? Might want to check with your E&O underwriter.

This is major change to the scope of an appraisal. Personally this is a rabbit hole that I am not interested in going down, but everyone needs to make their own decision.

Years ago when I worked in the credit department of a major regional Bank we were told that every loan write-up need at least three positive and three negative comments. One of the one's frequently used was that part of the collateral were title vehicles which traveled down public highways and could be involved in an accident which may have a negative impact on the business. Please provide a SWOT analysis for this possibility and let me know how it impacts the appraisal.

 

[Russ Kitzberger]

Are you speaking to a Marketability Analysis, defined as a study of how a specific property is expected to perform as it competes for the available market demand in a specific market or a business SWOT analysis pertaining to the actual tenant or occupant's business function/market?

 

[TerryRohrer]

Many making such lofty requirements don't comprehend the fact that appropriately selected and analyzed comparable data includes all the factors impacting the subject, and account for their impacts as well as can be done. This strikes me as busy work that increases the likelihood of obscuring the wheat with the chaff.

 

[Terrel L. Shields]

SWOT the L is that?

 

[George Hatch]

Strengths
Weaknesses
Opportunities
Threats

 

[Terrel L. Shields]

Strengths
Weaknesses
Opportunities
Threats

I thought we did that as part of the market analysis. The positive aspects of the property are... The negative aspects are ... etc.

 

[tsiegel]

I hope you charge them double or more your normal rate. SWOT analysis is fine, but if you thing about it that is basically what your appraisal should be doing. The only real difference is the wording. Actually one could argue quite successfully that a well written Highest & Best Analysis is a SWOT analysis.

The real question for any appraiser doing this type of analysis is, are you qualified?
What would be the agreed upon parameters?
How far forward or back in time should you consider?
What should be the physical boundaries? The neighborhood, the marketing area, the City, the County, the State, the Country, the industry, etc.?
My guess is some of the scope determination would depend on what you are appraising. A four unit apartment building would be a lot different than say a nation wide Dollar Store.
What weight do you assign to each category?
Can you predict the future of interest rates, buyer preference, new competition, another Covid or similar outbreak, etc.?-
Will you conclusion agree with your appraisal summary? Probably should.
Will the client provide you with a hold harmless if your SWOT analysis turns out to be inaccurate?
What is your liability? Might want to check with your E&O underwriter.

This is major change to the scope of an appraisal. Personally this is a rabbit hole that I am not interested in going down, but everyone needs to make their own decision.

Years ago when I worked in the credit department of a major regional Bank we were told that every loan write-up need at least three positive and three negative comments. One of the one's frequently used was that part of the collateral were title vehicles which traveled down public highways and could be involved in an accident which may have a negative impact on the business. Please provide a SWOT analysis for this possibility and let me know how it impacts the appraisal.

Thanks. I generally agree with you. I mean, my appraisal is a SWOT analysis. I am not sure I share your major concerns as I am already in that rabbit hole in the process of writing the appraisal. The bigger question for me is what the hell are they looking for? It is like trying to read the teacher's mind and I don't have time for that. My sense is that they want a cheat sheet of the entire appraisal so that they have one place where all of the features of the property and market are pulled together, but that is just my best guess. Who knows. For things like this, I like to put together some kind of template and start saving verbiage so I don't have to come up with something new every time.

 

[tsiegel]

Many making such lofty requirements don't comprehend the fact that appropriately selected and analyzed comparable data includes all the factors impacting the subject, and account for their impacts as well as can be done. This strikes me as busy work that increases the likelihood of obscuring the wheat with the chaff.

I think they get that. Honestly, I think it provides them with a vehicle to tell me that a given comp isn't appropriate or isn't adjusted appropriately.

 

[Tom D]

you can't ask lender directly what they are looking for? you remember the very old days, confusion was instantly solved with a talk to the 'person' who wants it.
my favorite is when they use lending lingo, which of course i never heard before, for something very simple. i don't deal with any AMC. i have learned to find the person who wants the answer to directly ask 'what do you want'? people seem surprised that i can find them, now i have made another friend with my lender's people. today's younger appraisers seem unable to do that in the course of AMC business.