Commercial Appraisers are Not Omniscient
I probably work 70 hours a week. I can truthfully state that I devote 100% effort to provide the best possible product for my clients and the best support for my opinion of value. Despite the increasing mass of data available, I can’t know everything. Last week I was appraising a Subway fast food restaurant worth less than a million dollars, this week I’m appraising a multi-million dollar industrial facility. It’s hard to remember from week to week what I appraised. There IS a possibility that I will overlook a nearby meaningful sale (or a far-off sale for property types with a regional appeal) that would otherwise be meaningful to my valuation. Informed purchasers often have better data than their appraisers. Give it to them. If the appraiser has been in business for any amount of time they’ll probably be willing to consider if an adjustment to the value should be made.
Commercial Appraisers Have Honest Disagreements
Over time, I’ve learned to attribute the best of motives to others. I hope and pray that others will do the same for me. There are exceptions, mind you. But sometimes, good men simply disagree. A close friend of mine and I disagreed about the value of a particular industrial property and the difference in our opinions is significant. I have the utmost respect for his opinion. I simply disagree with him. I don’t attribute malicious intent. I think the simple fact is – that he has a different opinion. And that’s what we’re being paid for – an opinion of value.
A Final Note
Admittedly, appraisers tend to be conservative by nature. Those of us who were around in the days of the S&L debacle in the early 1990’s remember the property lists published by the Resolution Trust Corporation (RTC), advertising multifamily units for sale at less than $20,000 per unit. More recently, in the single family sector, we remember the high percentage of foreclosed homes at the beginning of what many now call the Great Recession of 2008. On the other hand, prices sometimes surprise me to the upside. We must remain open-minded. But not so open-minded that our brains fall out. At the end of the day, the opinion I provide will be based on solid market evidence. But I’m not an arrogant fool. Present your evidence. My opinion has changed on more than one occasion by well informed market participants.
I’m not in anybody’s pocket. But I’m also open to the possibility that I might be wrong. My best advice to those who disagree with their commercial appraiser is to present your evidence. The smartest appraisers will weigh it in the balance.