James B. Price, MAI,
International Right of Way Association Valuation Committee <email@example.com>
Appraisal practices are
undergoing sub-stantial modernization and
technological upgrading in the United States
and will increasingly continue to do so
for the foreseeable future. Almost all
appraisers in major metropolitan areas
have ready access to comparable sales through
internet services that obtain and confirm
sales that can be easily researched. These
services provide photographs of the sale
buildings, site maps, and location maps.
The appraiser must still verify the sale
with a party to the transaction. The internet
data services charge either a monthly fee
to provide this information or charge for
each sale that the appraiser obtains. Other
internet services provide, or will soon,
local tax information, zoning, and GIS
(geographic information systems) data.
The Appraisal Institute, which
designates MAI and SRA appraisers, is also in the process of preparing a comparable
sale database based upon information that would be provided by appraisers who
have actually inspected or appraised the property.
In summer of 1998, during my
second vacation to Thailand, my observa-tion of the depressed Thai real estate
industry reminded me of my own appraisal experiences in the State of Alaska after
a severe recession that was caused by depressed crude oil prices (quite a contrast
to the oil market of today). The real estate appraisers were faced with a dilemma
of valuing properties at substantially lower valuations than the cost to construct.
Sales of real estate were limited and often involved unusual sale conditions.
Many appraisers used an alternate valuation technique that involved, first, valuing
the property under normal market circumstances and, second, estimating the time
period for the market to recover discounting the value for the number of years
during which the property
would rent for a lower rate of return.
The Seattle area, where I live,
is undergoing an intensive period of public works projects, similar to what I
saw in Bangkok during my last visit. Many appraisers in the USA, Canada, and
a number of other countries rely on courses and seminars presented by the International
Right of Way Association that provide technical assistance. Appraisers have to
be current in methods of appraising property to be acquired for public purposes,
partial acquisitions, or easements used for such purposes as access, utilities,
or aviation. In the Metropolitan Seattle area we are adding a third runway to
Sea-Tac International Airport, acquiring rights of way for a new transit system,
and improving freeways and roads to meet high traffic loads for our
increasing population. These projects, in addition to a strong high technology
economy, have created a strong demand for professional appraisers.
The USA established an Appraisal
Foundation in 1987 that has set standards and practices for real estate appraisers
throughout the country. This standardization was needed to retain public trust
in the quality of appraisals and maintain high professional and ethical standards.
Ongoing credit for courses that update professional skills is required by individual
states periodically. Many changes are occurring in American appraisal practices
both from a technological and professional practices viewpoint. We find that
our professional associations are critical in meeting the challenges that we