Appraisers -- WTF??

[JoyfulC 132299]

We rent a property that is apparently involved in a divorce. Over the past year and change, we've had FIVE appraisers in here determing the worth of the place. Two for him, one for her, and one for the insurance company. Oddly enough, all have come to very different estimates of the place's worth. (The lowest estimate is half that of the highest estimate.)

 

WTF???? Are there no standards for property appraisers?? Fred and I have never been interested in owning property, but sheesh! This has left us with a totally jaded idea of what property appraisers really do. Aren't there any industry standards??

 

I'm left wondering if property appraisers aren't even bigger whores than SPs are.

[Guest N***he**Ont**y]

There are certain standards that appraisers have to follow especially EMPAC in Ontario. They put the value of the property based on the location,style and age of the home and the surronding homes. It has been a real shock in my neighbourhood where property values have shot up 100% and of course the resulting increase in property taxes have goon double in the past three years.The EmPac appraisers are following the same standards as all of the commercial ones. I bet there is some personal bias that reflects on value though as they could be trying to keep values down to keep settlements low!

[Athos 108589]

In a case like this the interests of the party hiring the appraiser will determine whether the appraised value is high or low. It isn't necessarily overt, but the lawyers know which appraisers are conservative in their appraisals and which are not. They'll retain as their client's interests dictate. As Backrubman said, the only Estimate of value that's really meaningful is what someone's actually prepared to pay on any given day.

 

Porthos

[Jabba 18389]

Without knowing the circumstances, motivations or interests behind the appraisals, I can only hazard a guess behind the differences in the values.

 

Anyway, there are a couple of different types of appraisals. Take yer pick which suits the occasion.

 

1. Mortgage Appraisal.

A technical type of examination based on the number of rooms, square footage, property location, attachments (garage, outbuildings, etc), existing money owed, back-taxes, liens. This is used so the lender can feel comfortable with the amount of money they are about to risk on the borrower. If, for example, the seller is upside down on the property, owes taxes, has contractor liens and wants to beat up the buyer, this type of appraisal is supposed to prevent over-borrowing. Also determines the actual ownership of the property. Doesn't always work well - especially in the U.S. If the seller(s) owes back taxes, guess who has 1st claim of ownership if the municipality decides it wants it's money NOW? The government holds all the cards when it comes to property ownership. Ifn you don't pay the taxes, the govt grabs the property and sells it for whatever they can git to recover the money owed to them. Everybody else gets sloppy seconds.

 

2. Market Appraisal:

Commonly done by RE agents to give the seller an idea about the value of the property in current market conditions. It's based on what buyers paid for similar houses in the same area. May be most valuable for use by the divorce lawyers.

 

3. Insurance Appraisal:

Done by insurance underwriters to determine the replacement cost for a similar structure should a disaster occur. In a divorce, and in cases where passion, poor judgement or other emotions may be involved, a scorched-earth approach may appeal to one or both of the litigants. Not saying this is common in all divorce proceedings - but, if something unfortunate or suspicious should happen to the insured property, the Insurer has some dollar figures with which to deal.

 

Note: I don't want to sound paranoid, but you, as renters, should be very aware of your insured position in this circumstance.

 

4. Pre-purchase Appraisal:

This is a grey area for the industry. I have often asked an appraiser to render an opinion on prospective property purchases. Some guys are good, some really suck. I have learned from the observations & I have found good value in this type of appraisal, especially when it comes to older structures. Doesn't determine the dollar value of the property, but it does give you an idea what trouble spots and costs to expect. The analysis ranges from structure, electrical, cosmetic, plumbing, etc...

 

...There may be a host of other reasons for the appraisals. Just guessing here.

[trucido peritus lingua 2699]

The insurance appraisal was probably the one that came in low as it did not include the value of the size of land and the location.

[JoyfulC 132299]

Not sure about the insurance guy. I think the guy who came in lowest was the first one. He really took his time, looked at everything, measured, tried everything to make sure it worked. The guy who came in highest was sent by the ex's lawyer. He breezed through in just a few minutes, and didn't look at anything.

 

I guess I'm just a bit surprised that appraisals could vary by so much. How can the courts take this seriously?

 

Having lived here for six years, I take the lowest estimate to be the most truthful. I love this place, and it's been an adventure living here, but you can see daylight through the cracks in the foundation in the basement (which is often flooded because there are no weeping tiles or sump pump). Both the back and front porches are slowly sliding off (that earthquake a couple years back wasn't helpful). The plumbing and electrical wiring is... let's say "creative." The windows were state-of-the-art in the 1950s. And the whole place seems to have been designed for "little people." I wouldn't know where you'd start to renovate this place. It would probably cost you several times as much as just razing it and building new. But all that said, I do love this little old shack!