When is an opinion of value necessary?
Appraisals are typically required when a mortgage is being placed on a parcel of real estate. The lending institution wants to know what amount to lend based upon the property’s market value. But there are other occasions when a property’s value may be required to settle a dispute between opposing parties, the value of a property for estate purposes, property tax disputes, and so forth. Following are some of the reasons an appraisal is requested.
- Estimating the values for right-of-way acquisitions for municipalities or individuals.
- Identification of items or property rights overlooked in appraisal reports.
- Reviewing right-of-way reports for consistency and accuracy.
- Determining if additional damages can be identified and valued.
- Consultation for resolving condemnation award disputes.
- Estimating the value of real property for gifting or charitable contributions.
- Estimating the value “as of ” a certain date for inheritance purposes.
- Establish a valuation basis for real property 1031 exchanges.
Expert witness testimony and support.
- Providing testimony for tax court, commissioner hearings and various disputes defending the value conclusions developed in an appraisal or review.
- Clarification of the Appraisal Report Type used. Under the 2016 to 2017 USPAP regulations, there are two defined types of appraisal reports: Appraisal and Restricted Use. Each report requires different levels of information that should be included so the report can be clearly understood. A review of either type of report can identify what and where an appraisal is lacking regarding specific details that should have been recognized in the report.
- Dissolution Disputes. Analyzing real property valuations to determine if the value conclusions are reasonable, supportable or questionable.
- Analytical review of appraisal reports prepared for litigation to determine their strengths and weaknesses.
- Resolution of value differences between two or more appraisal reports.
Partial Interest valuations for realty limited partnerships.
- If more than one party owns an interest in a parcel of real estate, the percentage of ownership is important. Those parties not having at least 51 per cent ownership of the property will be required to sell their portion at a discount. We can help determine that discount.
- Providing reviews of commercial property valuations to determine if they meet current regulatory requirements and guidelines.
- Develop an opinion of the value of a real property asset for a proposed mortgage loan.
- Establish a basis for a decision to insure or underwrite a loan on real estate.
- Provide an “evaluation” to determine if the market value of the underlying real estate assets still support the amount of the loan provided.
Property Tax valuation disputes.
- The assessed value estimated by the assessor has a major impact on the taxes paid for real estate. An appraisal of the market value of a parcel as of the assessment valuation date can determine if the property is correctly valued. If the assessed value is too high, unnecessary taxes will be paid by the owner.
Replacement Cost estimates for insurance purposes.
- Basements, footings and site improvements typically are not included in the insured value of a property. Building costs continually increase. A replacement cost appraisal can determine if the improvements are properly valued to cover the replacement cost of the property. Or if the improvements are over-insured and the premiums are higher than needed.