Business Considerations
Complex assignments take more time and require specialized expertise. Charge for your time! If a complex assignment will take twice as long as a typical assignment, charge at least twice as much as you would normally. Charge more than you think you should for something you haven’t dealt with before because your time estimate is likely low.
Complex assignments can clog your production queue when you’re busy so budget extra time to give you time to think through the assignment.
Consider your client. Does the client really want an expert on this assignment or are the client expectations unrealistic? Does the client need an expert and maybe you’re not?
It’s OK to pass on any assignment.
USPAP requires competency or that you develop competency during the course of the assignment.
Don’t get in trouble!
Examples
These are recent examples of complex assignments I’ve completed to highlight some of these techniques.
- Backs Arterial
I recently appraised a home that backed a four lane, 45 mph major arterial. This assignment was somewhat complex because of the subject’s location backing the major roadway and the lack of recent competitive sales in a similar location. I went back four years to find the most recent competing sale backing the arterial and time adjusted it forward. I discussed the comparable sale with both the listing agent and buyer’s agent and found that this sale was on the corner of the busy street and the less busy street entering the subdivision. The comparable sale had an inferior location compared to the subject because it was directly exposed to noise from the busy street along the side of the home directly open to the intersection. I adjusted this sale up slightly for inferior location and adjusted the rest of my comparables more for superior location.
I used time to find a good comparable and qualitative analysis to compare the subject’s location to the dated sale and other comparables to place it in its market. I also consulted with a market expert (thanks Bill!) to understand where I should be looking for comparables.
2. Halfplex with Accessory Dwelling
I recently received an order to appraiser a semi-attached home (a “halfplex,” from “half of a duplex”). It was in a neighborhood with other recent competing halfplex sales in a university town with very low vacancies. What made it complex was the detached one bedroom/one bath permitted accessory dwelling in the back yard, unique in my experience. Entry to the accessory dwelling was through the back yard with no separate public entrance. The accessory dwelling did not have separate utilities and was really the prototypical “granny unit.” However, it could be legally rented. It was zoned single family residential. Despite an extensive search of MLS and discussion with local market participants, no similar sales found of an entry tier property with an accessory dwelling.
This is a halfplex with an accessory dwelling. It is clearly superior to a halfplex without the accessory dwelling but somewhat inferior to a duplex with separate utilities and entrances. I placed the subject above the halfplex sales and below the duplex sales.
I considered what the subject’s market is and placed it in that market. I used qualitative analysis to get a sense for where the subject’s market value should be.