Raising Your Level of Awareness
By Jordan Petkovski, V.P. Appraisal Operations
1. Transparency in Reporting: Unlike your kids on Christmas morning, the investor community doesn’t like surprises! The more information provided within the appraisal report, the better. This doesn’t mean filling up ten pages with ‘canned’ commentary, this means providing a detailed synopsis of your analysis and findings. Remember, providing enough information for the reader of the report to replicate your findings in the future is the current ante to play. Did you analyze sales that were not used in your comparable sales analysis? Why not disclose these sales within your report, in the form of an addendum, and identify why they were considered less reliable than those sales utilized in your comp grid?
2. Reconcile the Value: Give the reader of the report an explanation of your reasoning for deriving the subject’s value. Did you consider the inventory, absorption rate and depreciation? Is the market stabilizing? Did you give one or more comparables a greater preponderance of weight when concluding the value? Why? If you’re able to answer these questions in your reconciliation commentary, you’re less likely to find yourself defending the value down the road.