So Many Appraisal Cost Approach Questions

So Many Appraisal Cost Approach Questions!
So Few Answers! Such Low Fees!

By Tim Andersen, MAI

Excerpt: It is clear most appraisers do not like to do the Cost approach. Generally, we are not too familiar with it. So, it is clear that most appraisers, because of this, do not appreciate the deep analytical power the Cost approach really has. So Many Appraisal Cost Approach Questions!

Therefore, I’m going to ask you 10 questions on the Cost approach (and stuff related to it). After you’ve finished reading them, you probably will still not like to tackle the Cost approach. Nevertheless, you just may have a better understanding of, and appreciation for, its powerful analytical capacities.

First Question: On the 1004 form is the indication that Fannie Mae does not require the Cost Approach to Value. Where does the form instruct the appraiser not to complete the analytics of the Cost approach?

To read the other questions and answers click here

My comment: Appraisers, including myself, seem to have a love/hate relationship with the Cost Approach. But, it can be useful. Tim’s much longer article “But Fannie Mae says I don’t have to do the Cost Approach!!” will be in the September issue of the paid Appraisal Today.

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10-25-19 Newz: Fannie Waivers – No Bifurcates? – Market Cycles

We Don’t Need No Stinking Bifurcates… Do We?

By Tim Andersen, MAI

Excerpt: QUESTION: I’ve heard so much lately about hybrid appraisals. I really don’t understand them. I guess, though, my biggest question about them is whether they are USPAP compliant. Some heavy hitters in appraisal have said they are not USPAP compliant, they pollute the industry, they will degrade us appraisers to the point we are no longer necessary. Some equally heavy hitters have said none of that is true, and that appraisers should be doing them since clients want, to coin a phrase, a painter to paint their house (cheap & fast), not Michelangelo to create an immortal work of art in it (expensive & slow). Since hybrid appraisals do not require me to inspect the property, how can a hybrid appraisal report be USPAP compliant? Do I have to list the inspector in the Certification since inspecting the property is significant appraisal assistance? How are state boards going to look at hybrid appraisals? I do not know what to think. Help!

To read Tim’s answer, click here

My comment: I love Tim’s blog postings. He has been writing articles for the paid Appraisal Today on evaluations, suing state boards, and What’s changed in USPAP 2020-2021? (coming in the Dec. issue) He is definitely a USPAP expert!!

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