Adv Residential Applications & Case Studies (MK)

This course provides the residential appraisal student with the opportunity to think beyond basic residential appraisal assignments and consider the appraisal of complex properties using advanced methods and techniques. In the first unit, the complex property is defined and identified by virtue of property characteristics, market conditions and/or ownership interests. The requirement that the appraiser of a complex property carefully think through the problem identification and scope of work processes, in particular, is stressed. Examples are given of issues that may escape the appraiser’s attention unless the appraiser is very deliberate and careful to recognize these potential pitfalls. Although there are still only three valuation methods available (Sales Comparison, Income, and Cost Approaches to Value), the appraiser must learn how to implement those approaches in creative ways when the assignment does not allow the freedom and flexibility he or she enjoys in typical, simpler assignments. Basic appraisal and reporting principles are revisited as necessary and used as signposts to remind the appraiser of the responsibilities inherent in the appraisal of complex properties. In the second unit, the student is challenged to think through and solve various case studies involving the appraisal of properties that are complex due to property characteristics, ownership interests, and/or market conditions. Although the student must “crunch numbers”, the emphasis is actually on thinking through the problem identification and problem solving processes. The student is reminded that in the changing appraisal profession, a reduced scope of work (“drive-by appraisal”) doesn’t necessarily make for a simpler assignment because property characteristics may be difficult to determine. In the case of ownership interests other than fee simple, the student is reminded of what value is and what must be present for value to exist. When appraising in the midst of changing (and challenging) market conditions – or anticipated changes -- the student is reminded of the vital steps of knowing and analyzing the market as it reacts to the forces impacting it, and forming a prospective value opinion that effectively projects the evolving market conditions for a future date.

1. Property characteristics that might make a property complex
2. Ownership interests that might make a property complex
3. Market conditions that might make a property complex
4. The importance of slowing down and thinking clearly when appraising complex properties
5. How to determine ways a property can be appraised when typical methods are not possible
6. The responsibilities of the appraiser regarding competency
7. The importance of problem identification in order to determine scope of work and competency
8. The role of extraordinary assumptions, hypothetical conditions, and supplemental standards in the appraisal of complex properties
9. The appraisal development rules as they relate to the appraisal of complex properties
10. The appraisal reporting rules as they relate to the appraisal of complex properties
11. To recognize and correctly complete complex assignments resulting from reduced scope of work requirements that make it difficult to identify property characteristics
12. To appraise a property with an encumbered ownership interest, such as a life estate
13. To correctly identify the many complex issues and implications resulting from a property with overimproved characteristics as well as significant market changes in the near (and distant) future