Previously, we asked our real estate appraisal community, “What’s your favorite part of the appraisal process?” The top three answers we received were “Data collection and property description,” “Data analysis,” and “Application of the approaches to value.” This time, we asked appraisers, “What part of the appraisal process do you find the most challenging?” Interestingly, “Data analysis” came out on top once again. Read the full survey results below.
What part of the appraisal process do you find the most challenging?
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Data analysis (34%)
“Any of these can be challenging at times, but for complex assignments, the data analysis is crucial for determining our opinion. Here is where an appraiser’s expertise really comes into play.”
“When comps are limited, or when sales prices vary by as much as 50% for what appear to be very similar properties in the same neighborhood (which seems to be more and more common in the Denver metro area), selecting the best comparable properties can be a very time consuming and stressful process.”
“After a thorough data collection, I spend the most time analyzing the data I’ve collected. Once the analysis has been done, the value will become clear. If it’s not clear, I figure I need to go back and reassess, maybe collect more data, talk to more realtors, and sometimes just sleep on it!”
“Adjusting for odd attributes—both positive and negative.”
“There is so much expected now by clients. They want more and more information in the report.”
Site value opinion (17%)
“I choose ‘Site Value Opinion’ as the most challenging since there are very few vacant land sales in the areas that I appraise in. With very few sales, it’s very difficult to provide an opinion of value for many sites.”
“My market area is comprised of mature neighborhoods, with 30 to 90 year old homes and subdivisions. There are very few, if any, sales of vacant land or ‘tear downs.’”
“Rural, raw and with no valid sales.”
“I specialize in the appraisal of acreage site or other complex properties. Estimating and supporting land values occupies much of my time.”
“Highest and best use can be the most challenging aspect of an appraisal to determine the appropriate site value.”
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Data collection and property description (12%)
“Data collection, particularly in the form of verification, is the most difficult for me. It is always difficult to get brokers to verify information, but when tight deadlines are thrown in, it becomes almost impossible. As more clients are shortening their turnaround time, this is becoming a larger problem.”
Reconciliation and final opinion of value (12%)
12% of survey respondents identified “Reconciliation of value indications and final opinion of value” as being the most challenging step in the appraisal process.
Identification of the problem (9%)
“Getting an index is critical to establish the path to be taken.”
Application of the approaches to value (9%)
“The income value approach is the most challenging.”
Scope of work determination (7%)
“The crux of the appraisal assignment is to determine the scope of work required to produce a credible result.”
Report of defined value (0%)
Zero respondents identified the final step of the appraisal process, “Report of Defined Value,” as being the most challenging for them.
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