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Archive | Appraisal

August 15, 2023

Entrepreneurial Profit

In valuing any property in the course of development, one must add entrepreneurial profit.  The cost approach is used and entrepreneurial incentive is an important element of this valuation method.  It is the incentive an investor has for coordinating the construction of a new project.  Few investors would accept less than an amount necessary to account for the trouble they spent coordinating the construction of a new building. The Dictionary of Real Estate Appraisal defines entrepreneurial profit as (1) a market-derived figure that represents the amount an entrepreneur receives for… read more

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Posted in Appraisal, Condemnation, Entrepreneurial Profit, Valuation of Property in Course of Development
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October 19, 2021

Don’t Trust Your Appraisal? Don’t Worry, Neither Does Your Appraiser.

How strong is the residential market? Well, according to people looking to buy and folks looking to sell, very strong.  In fact, many residential properties put on the market sell for more than the listing price.  Indeed, many times there are bidding wars.  All this is fine until the winner of the war applies for a mortgage. The gulf between contract prices and appraised values highlights the risks to buyers in the current market, especially those stretching their budgets to win a bidding war.  Mortgage lenders will typically lend only… read more

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Posted in Appraisal, Bidding War, Fair Market Value
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June 5, 2020

Manalapan Farm Owner’s Condemnation Award of $4.5 Reversed as “Miscarriage of Justice”

The Asbury Park Press reported yesterday that the State Supreme Court reversed a jury award of $4.5 million to a farm owner.  According to his counsel, the Town took the property to prevent its development.  The farmer had been seeking to sell the property for housing development which the Township opposed.  The Town thought it would be a good property for the Township to own for recreational expansion.  This certainly is not a condemnation for a public purpose.  Taking property to stop its development is not a lawful taking.  A… read more

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Posted in Appraisal, Evidence, Re-zonings
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August 27, 2019

MEMO TO APPRAISERS: KEEP IT SIMPLE

          An interesting decision from the Fourth Department presents the issue of can an appraisal be limited to the study of specific economic measurements.  Most appraisals of property taken in condemnation consider the three basic methods of valuation, Viz.: comparable sales or market data approach; capitalization of income; or, the cost or specialty approach.           In Matter of Rochester Genesee Regional Trans. Auth. v Stensrud, ___ AD3d ____ (June 7, 2019), the condemnor’s motion to strike that part of claimant’s appraisal report with respect to “investment value” and to preclude… read more

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Posted in Appraisal, Methods of Valuation, Uncategorized
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November 30, 2018

WE DON’T NEED NO STINKING HUMAN APPRAISER – WE WILL USE A BOT

The November 30, 2018 Wall Street Journal has an article, “Home Appraisals Go High-Tech.”  It seems that the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and The Federal Reserve have proposed loosening real estate appraisal rules so that a majority of homes can be bought and sold without being valued by a licensed appraiser.  According to the article, the plan would increase the value of homes that can be sold without an appraiser visiting the property from $250,000 to $400,000.  This does not sound like… read more

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Posted in Appraisal, Appraisers, FDIC
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