Adam Johnston, SRA, is a long time appraisal veteran, and currently a chief appraiser for a national real estate settlement services company (and a longtime fan of Soapbox). On a daily basis, he speaks with appraisers and lenders across the country having observed the rise and fall of the sub-prime lending market. I am glad to have him share his views with us …Jonathan Miller
For those that recall, Baghdad Bob was the embattled former Information Minister for Sadaam Hussein. He achieved international fame by rendering delirious proclamations of Iraqi victory while the rest of the world watched Sadaam Hussein’s regime collapsing with historical speed. Baghdad Bob was forced to humiliate himself by contradicting reality with fictitious stories of Iraqi battlefield victories. This is akin to the Captain of the Titanic steering the ship while it sank to the bottom of the ocean.
The parallel between Baghdad Bob and my friend the appraiser should become more evident as this blog post continues.
This week, I was challenged with an appraisal that made my eyes water. The author was reportedly an appraiser with 45 years of experience, certified general licensure, and possessing a prestigious designation with a prominent appraisal organization. By all standards, this appraiser is a patriarch of the industry and should be admired by the legions of lesser accomplished appraiser’s-myself included.
Yet, his work betrays a different story. Case in point; the subject property is located in a mixed-use area with residential and commercial land uses. The appraiser acknowledges in his appraisal that he failed to verify zoning (or attempt to verify the zoning). Consequently, he omits a determination of zoning and zoning compliance. Yet, the appraiser managed to conclude that the highest and best use of the subject property is it’s current use. I found this conclusion baffling since one of the four mandatory tests for highest and best use is legal permissibility. The appraisal contained no discussion regarding the basis for his conclusion of highest and best use. Thus, having no verification of the subject’s specific zoning, and consequently what uses are legally permissible, it becomes impossible (without assumption or specific assignment condition) to answer the question of highest and best use.
Sadly, when confronted about the apparent problem in his appraisal, the appraiser admonished me and suggested that my concern constituted a lack of trust in his abilities. Thus, he essentially ignored my questions in favor of a disapproving glare. As a consolation, he directed me to review his resume for assurance and peace of mind.
The Lesson Learned: Your appraisal, as opposed to a self-composed list of resume qualifications, represents the most trustworthy resume.