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March 27, 2020
Jefferson L. Sherman, MAI, AI-GRS
Director of Screening Offers Guidance for AI Professionals
Despite the unusual set of market conditions that appraisers are facing during the coronavirus pandemic, we still have the fundamental responsibility to account for market conditions on the effective date of value. Here's some helpful guidance from Appraisal Institute Director of Screening Stephanie Coleman, MAI, SRA, AI-GRS, AI-RRS:
"Appraisers are concerned about being blamed for making the wrong calls on how COVID-19 might be affecting the market. That concern is understandable. But we need to remember what it is we do.
"We come up with not what we think the value of a property is, but what we think the market thinks it is. A 'value' is inherently an opinion. It's not a fact to be uncovered. To figure out what 'the market's' opinion of what a property is worth, we start with market analysis. Market analysis is a lot easier when market participants feel confident they know what's happening. When there's a great deal of uncertainty in the market, market participants become confused and figuring out what 'typical, reasonable, knowledgeable' buyers and sellers think and how they would react becomes complicated.
"The best we can do is talk to market participants – buyers, sellers, brokers. What's happening with active escrows? Are buyers backing out? Are sellers holding off on listing properties? Reducing prices? Offering concessions? What's happening with days on market? What are brokers hearing? Are tenants renewing leases? Are businesses closing and vacating? Are vacant spaces getting leased? Are developers going ahead with development plans, or have they put them on hold?
"The answers to these kinds of questions provide clues. The appraisal report should include a discussion of them as part of the market analysis.
"Finally, the appraisal report should address the uncertainty in the market caused by the COVID-19 crisis, not as a limiting condition, extraordinary assumption, or disclaimer, but rather as part of the discussion of market conditions. While the crisis is still unfolding, it might also be a good idea to highlight key points relating to COVID-19 as a significant factor in the letter of transmittal."
We do have an essential role to play in keeping our economy stable, and we do provide our clients with the advice they need under such trying times. Never underestimate the "value" your service brings to our society.
Have a safe month!
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The Ohio Chapter is proud to be a part of the Appraisal Institute. Our chapter professionals are committed to the highest standard of professional appraisal practice and have been tested and trained to the highest levels of educational standards in the business. Confident in our rigorous standards of appraisal practice, we are dedicated to maintaining the highest level of professionalism and quality through a commitment to life-long learning. We encourage you to consider the benefits of the Appraisal Institute if you are looking for an appraiser or an appraisal career.
I hope this note finds you well!
Once again, I want to thank all of our chapter board of directors, executive committee and volunteers for your continued service and support to the membership. I truly appreciate each and every one of you.
I also would like to thank all of our members for their continued understanding as we have had to postpone and cancel in-person educational offerings due to the current COVID-19 pandemic. Postponing and switching to virtual offerings has been a difficult decision, but necessary, as we believe it to be in the best interest for the health and safety of our members, guests, instructors, and speakers.
I'm excited to announce two (2) new continuing education virtual offerings for this Fall that our Virtual Events Project Team has been hard at work planning.
The first will be a Property Tax Webinar that will be on October 29, 2020 from 3PM-5PM. We will have a panel of attorneys who represent the property owner, school board, and the Ohio Board of Tax Appeals office discussing their perspective of the property tax appeal process.
The second is a State and Federal Regulations Panel that will be November 17, 2020 from 2PM-4PM. This webinar will feature several panelists including the State of Ohio's Superintendent of the Division of Real Estate and Professional Licensing, Anne Petit, and Bill Garber who is the Director of Government and External Relations for the Appraisal Institute.
Candidates! Be on the lookout for another Virtual Candidates Cocktail Hour this Fall. We held our first social back in June and I encourage all candidates and candidate advisors to attend. This is a great social for candidates to ask questions that they may have regarding the candidate process.
The Economic Seminar Committee is hard at work lining up speakers and sponsors for the 43rd Annual Economic Seminar. Thank you everyone who participated in the recent survey that was sent out regarding the seminar. Your input tremendously helps the Committee in planning this event, especially considering the current circumstances. As this will be a virtual event, it will look a little different this year, but I am confident that it will be just as informative and relevant as in years past. You all should be receiving emails soon with more information.
As always, if you are interested in getting more involved in the chapter or would like more information about events or education, please email me at email@example.com.
Shannon L. Weaver, MAI
2020 President – Ohio Chapter Appraisal Institute