Dear Mr. Harrison,
I recently did an exterior-only VA Liquidation Appraisal on a dwelling built in 1924. Normally we do a full appraisal on these properties, but the owner would not let me in. The dwelling had some obvious deferred maintenance, but it’s a brick dwelling and I anticipate that it will be around for many years yet. My estimated value was about $100,000. If the dwelling were nicely refurbished, it might command a value of about $150,000 in its neighborhood.
The VA review appraiser told me that since I did not gain entrance to the dwelling, I was required to use the actual age of 87 years as the effective age. (I used 12, which in looking back, I do think was too low.) Most appraisers I talk to seem to follow the old Marshall-Swift mindset of 60 years as the typical total economic life of a property. Would you give me your thoughts?
The effective age of a house depends mostly upon its design and condition. I have always believed that "benchmarks" are of little use in appraising, and this is a good example. I doubt the VA review appraiser has anything to back up his or her wrong opinion! If you render an opinion about a property you have not completely inspected you have to make some assumptions about what you did not see. The USPAP requires that you make a "credible" appraisal. In view of the circumstances, I suggest that you put this job behind you and move on.