There is more than one way to skin an appraisal

There is more than one way to skin a cat, right? I’m not sure who came up with that saying, and I know it’s graphic, but the point is there are often many paths to finding a solution to a problem. The same is true with appraisals. If you give me a minute, I’d like to share a few of the different ways to appraise a property. This might help you with a situation you’re dealing with too. By the way, I do have an orange tabby cat, and his name is Rambo.

new construction appraisal - using hypothetical condition - by sacramento appraisal blog

Here are a few options appraisers have available. Some of these will relate well to loan appraisals and others might be more geared toward private appraisals.

AS-IS: This is probably the most common way to appraise a property – just as it is. The appraiser will consider whatever is there and the value will reflect the property in “as is” condition. There will be no repairs made at all.

SUBJECT TO REPAIRS: A property can also be appraised as if repairs were already done. Take the photo below as an example. During the inspection I noted obvious roof damage (there was a leak) and the AC unit was missing. Upon calling my lender client after the inspection, they instructed me to appraise the property “subject to repairs” being made. This means I gave a value to the property as if the roof damage and AC unit were already fixed – even though they were not. Then when the repairs were actually made, my client had me go back out to verify they were completed. In cases like this a lender is probably going to want to see the repairs made before the loan can close.


EXTRAORDINARY ASSUMPTION:  This is when an appraiser assumes something to be true about the property for the sake of analysis even though the appraiser does not know for sure that it is true. For instance, if an appraiser is not allowed to inspect a couple bedrooms in a house, the appraiser can make what’s called an extraordinary assumption. This means the appraiser can assume the rooms are in average condition despite not seeing the rooms (sometimes “locked” rooms are being used to grow pot). The appraiser has to believe the rooms are actually in okay shape, and the client should be on the same page for the appraiser to use such an assumption too. An appraiser really does the same thing with a “drive-by” appraisal because the appraiser has not seen the inside of the house, but is assuming it is in decent shape based on partial information from Tax Records, old MLS listings, an inspection from the street or other sources. Keep in mind many times a lender will not be okay with an appraiser using an extraordinary assumption, which means they want the appraiser to see every room. But in the case of private appraisals for Date of Death, divorce or bankruptcy, an extraordinary assumption is more commonplace.


RETROSPECTIVE VALUE: This type of value analyzes a date in the past despite inspecting the property today. This is common for IRS appraisals where the appraiser gives a value based on the date when the property owner passed away. It’s also common with divorce appraisals if the appraiser is rendering a value based on the date when papers were filed. For example, I was hired this year to give an owner a value for a date in 1996 for tax purposes. Instead of using time travel to get back to ’96 (when I used to use Juno for email), I simply inspected the property after I was hired, and then used very old data to come up with a value based on what the market was doing in 1996.


HYPOTHETICAL CONDITION:  This is when an appraiser considers something as fact for the sake of analysis even though it is not true. An appraiser does this regularly for a new construction appraisal like in the first photo above. Despite the house not being there yet, the appraiser can observe a builder’s plans and appraise a 3000 sq ft house even though it does not exist. Another example would be a client asking an appraiser to appraise a house without a roof as if it had a roof. Maybe there is some sort of insurance claim, lawsuit or repair loan going on. In a case like this the appraiser would simply use a hypothetical condition, meaning the appraiser would appraise the house as if it already had a roof even though it does not. Whenever appraisers use a hypothetical condition, it should be okay with the client in the first place and then made VERY clear in the report so the client and any readers knows what the appraiser has done.

Question: Any questions, stories or scenarios to share? Which methodologies have you encountered? Comment below.

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Random things I’ve seen while inspecting houses

One of my favorite things about appraising is the the random things I come across while inspecting houses. Here are a few gems  I’ve seen recently. Enjoy.

Foam Repair Job

Foam Repair Job: This window was leaking, so a large amount of foam spray was used to stop the leak. Not very attractive, but it did get the job done.  🙂

golf ball mailbox - by Sacramento Appraisal Blog

Golf Ball Mailbox: At this point in life I’m honestly more of a miniature golfer, but a reader sent this to me, and it made me smile. What do you think? Is it a selling point? What does this do for curb or neighborhood appeal?

new well in Rancho Cordova

A Well That Looks Like a House: Golden State Water Company recently demolished a house in Rancho Cordova and constructed a well in its place (since a new well was needed). Being that the previous house was surrounded by nothing but single family detached homes, it’s nice to see the new well was designed in a way to blend in with surrounding homes as much as possible. This is on the corner of Paseo Drive and Malaga Way.

warning sign quotation marks

“Warning” Sign on Porch: I promise you I am not a grammar snob by any stretch, but since I’ve run into The Blog of Unnecessary Quotation Marks a few times, this doorstep sign did tickle my intellect. When putting “warning” in quotations, it actually calls in to question whether it is a warning or not.

holes in backyard from dogs - by sacramento appraisal blog

Dog Digging: At first when I saw this backyard I thought either there was some sort of funky geological issue going on, a gigantic snake infestation problem or maybe the kids dug out a hobbit habitat. This is actually the result of a digging dog.

Any thoughts?

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The Grinch and Stripped Foreclosures

grinch book coverIt’s Dr. Seuss’s Birthday today and I cannot help but think of the correlation between the way the Grinch took every little crumb in the homes of Whoville and how foreclosures sometimes get stripped before they’re seized by the bank. Here is an example of one house that has always stood out to me from an inspection years ago. While there was no significant damage to the property, the owner or thieves felt entitled to just about anything that could be removed – even the peephole (seriously).

Appliances are some of the most common items taken from properties.

missing appliances in foreclosure property

Toilet seats were removed at this house.

missing toilet lid

Shower knobs and spigots throughout were missing (all faucets in the bathrooms and kitchen were missing too).

Missing knobs and spicket

The covered patio was removed from this house, and that’s fairly normative to see before the bank seizes a property. I think the rationale is that the covered patio was likely not there when the property was purchased or refinanced, so it is the owner’s right to remove it. I completely get that and I really don’t have a strong objection to that point. I would however object to the removal of the actual concrete patio though. What do you think?

Missing covered patio

Pipes underneath the sinks were all partially removed and disconnected.

Disconnected pipes

The toilet was missing in the Master Bathroom.

Missing toilet

Most home owners do not take anything more than a stove or maybe a special light fixture, which is completely understandable, but the property above had really been gutted of things that should have stayed with the home because they typically transfer with a property when it sells. I’m not trying to be judgmental, the moral police or mean in my analogy between the actions of the Grinch and stripped foreclosure properties, but you can probably understand the basis of the correlation due to photos above. If you are going through foreclosure, my heart goes out to you because that’s not easy. Just remember to press on and continue to find hope that does still exist.

What items does the home owner have the right to take? What should be left? I’d be curious to hear your thoughts. And of course, what is your favorite Dr. Seuss book?

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

A cannon landmark, conformity and sales in Wilton

Don’t you love unique landmarks? I sure do. While driving on Wilton Road today on my way to an appraisal inspection, I decided to actually stop and snap a few pictures of this “cannon/mining” motif in the front of a property in Elk Grove (literally next to the border of Wilton). I always get a kick out of this one each time I pass by. My lot size is far too small to have this theme in my yard. Well, my neighbors would probably flog me too due to the principle of conformity in real estate. But if I was on acreage…. What do you think?

While we’re on the subject of Wilton, here are all sales in Wilton over the past five years. What do you see? Does anything stand out to you? The trend in many other areas of Sacramento tends to have a much sharper decline, but that’s less of the case here. What makes Wilton different in your mind? If you live in Wilton, what do you find desirable about the community?

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.