Reply to post by Philip A Bjorkman, on December 18, 2001 at 20:00:19:
It has always been my personal opinion that case specific cost data are superior to aggregated data that are supposed to represent some measure of central tendancy, but which may be "stale" as you suggest or which may not reliably represent sub-regional or sub-market data nor specific cases which tend more to be outliers than central.
While the regional data sets are larger, getting three local costs seems customarily acceptable and mimics the process that any individual consumer would apply in obtaining a replacement. IMO the cost (and derived unit cost) should be the cost likely to be incurred by the damaged party to be made whole. IMO, in the case of the typical homeowner (as contrasted to a public agency or a large institution) the most representative cost is the installed cost.
This goes back to your other thread, Phillip. If WC-ISA has used 60% of wholesale it suggests depreciation should minimally reduce cost to (installed / 2.5~3.0) x 0.60. Species, Condition and Location would be additional depreciation. So you could use local cost and go with the old WC-ISA implicit depreciation, or start with the maximum installed cost and reflect depreciation that in your opinion reflects actual value.
Now, this is where judgment comes into play. What are you depreciating to? Maybe it is contribution to FMV of the real estate. Maybe it is to some capitalized income producing potential (a separate approach to value). This is the same question WC-ISA should have, may have, asked in its "empirical" analysis. And for that guidance you still need to track down that committee.
So, to answer your question, the 9th Ed. is certainly usable. If the costs promulgated by your "regional committee" are non-current you need to develop your own. I think, that notwithstanding any regionally developed costs, the appraiser is not constrained from developing case specific local costs.
In any case, the appraiser has a duty to have current local knowledge sufficient to develop a supportable and defensible opinion of value. IMO that means more than saying "well it's because the 9 year old supplement said to use these costs." And I think you said the same thing in your other thread.
|<Philip A Bjorkman>|
Reply to post by Scott Cullen, on December 18, 2001 at 20:00:19:
Thanks Scott. The Western Chapter does not appear to have a web site but I will write them and develop a contact with the ISA WC's Northern CA Regional Tree Appraisal Group to find out where they are and will post my findings to this Board. In addition to getting ASCA certified within the next 2 years, I am going to reinstate my CA Real Estate Broker License and pursue Accredited Rural Appraiser (ARA) status with the American Society of Farm Managers and Rural Appraisers Inc. They appear to be the most professional rural land appraisers that I have found. Hopefully I can put all of this education to some good use.
Reply to post by Philip A Bjorkman, on December 19, 2001 at 06:19:24:
I was able to log on this AM to http://www.wc-isa.net/
One thing you need to be careful about with R.E. appraisal education and practice is the presumption... often a fact... that value is market value of land and improvements. Even in R.E. practice an assignment may be to estimate value in use rather than market value. And it may be that trees have value separate from the land, not typical, but possible.
IMO it is the technical skills you want to take away, not necessarily the very same assumptions about assignments.
You clearly have experience with timber and timber land values. It is really important to separate that from landscape tree value. Northern CA is a geographically big area and very diverse in terms of land use and value. In very general terms as you move away from an urban-affluent toward a rural setting the CTLA methods becomes less applicable. Technically they are always applicable, you just might depreciate to zero or near zero, so it doesn't make sense to apply them... a waste of time.
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