Commercial Grade is a weekly post by John Cicero, MAI who provides commentary on issues affecting real estate appraisers, with specific focus on commercial valuation. Today John says that valuation is an opinion and provides suggestions on what not to name your appraisal firm.
Disclosure: John is a partner of mine in our commercial real estate valuation concern Miller Cicero, LLC and he is, on Thursdays, one of the smartest guys I know. …Jonathan Miller
In a recent article on Myrtle Beach Online, the Associated Press reports that Appraiser Overseer in Trouble. It turns out that an appraiser on the state appraiser licensing board is accused of overvaluing some vacant land. The land was valued by the overseer at $45k an acre and sold later for $21,300.
What’s interesting is that the board does not allege any fraud in thecase, only that the value was incorrect. As a result, his case will be tried by an arbitrator who will decide if any punishment is warranted.
I myself was recently involved in a consulting assignment with an investor who wanted to dispose of several assets. When they finally went to market by a large reputable brokerage firm, the bids were nearly 20% below my estimate. Not easy for me to admit, but the evidence suggests that I was wrong.
I am all for coming down hard on someone who has committed a standards or ethics violation; I’m just not sure if “getting it wrong” warrants punishment if best efforts are made to get it right.
I think the biggest thing that this appraiser will have going against him in his hearing is the name of his firmTwo Day Appraisals. Its kind of hard to make the case that you spent enough time doing your market research when your whole business model is based on quick turns!