APRIL  2011

As a national real estate evaluation company, ELLIOTT® & Company Appraisers performs appraisals and other real estate related services anywhere in the United States. While ELLIOTT® conducts standard residential appraisals, the company is also very active in providing real estate solutions relating to complex properties.

Some of our more complex evaluations involve diminution of value, eminent domain, insurance valuation, to determine replacement cost evaluations, retrospective value services and litigation support.

"We're able to perform specialty work and handle these complex assignments because we have people with vast experience and the highest qualifications in the appraisal industry," said Charlie Elliott, MAI, ASA, SRA, and president of ELLIOTT® & Company Appraisers. "Furthermore, we have a track record that enables us to draw from our history of solving challenging problems."

Many of these projects go beyond real estate appraisals. They also include real estate consulting and serving as expert witnesses in court cases involving real property. With our corporate capabilities, there is no assignment involving real estate that is too complicated to be handled by ELLIOTT®. These complex assignments can be carried out anywhere in the United States, and often in other parts of the world.

"Sometimes while performing assignments on complex properties, we're confronted with issues that require us to plow some ground in unchartered territory," Mr. Elliott said. "Fortunately, we are in a position to solve these complex problems."

HOME-SALE PRICE BREAKS RECORD

A Silicon Valley mansion sold for $100 million, breaking the record for the price of a single-family home in the United States. In the past, this newsletter has reported on properties with asking prices higher than $100 million, but, according to a March 31 article in the Wall Street Journal, no such properties have sold for nine figures before.

The 25,500 square-foot French chateau-style mansion in Los Altos Hills, Calif., with views of the San Francisco Bay was purchased by Yuri Miller, a Russian who has invested heavily in Silicon Valley. Miller, whose primary residence is in Moscow, invested $200 million in Facebook two years ago and also has significant holdings in Groupon and Zynga, through his firm, Digital Sky Technologies.

The sale price of this symmetrical limestone mansion goes against the trend of falling home prices. Home prices indeed declined for luxury properties early in the recession and in some cases still are. But some luxury real estate properties are starting to improve faster than the middle and low end of the housing market. The National Association of Realtors reported a 4% increase in sales of homes priced more than $1 million from February 2010 to February 2011.

STATES CONSIDERING OUTLAWING USE OF
FORCLOSURE PRICES IN APPRAISAL VALUES

Legislators in Illinois, Nevada, Missouri and Maryland have introduced legislation that prohibits the use of sales prices of foreclosed properties or short sales in determining the value of other real estate. The bill in Maryland on this issue was withdrawn from consideration.

Such legislation may require appraisers to carry on their duties in violation of USPAP. It is opposed by most appraisal trade groups, including the Appraisal Institute.

"Elimination of foreclosures and short sales as comparables would result in an artificial market and would mislead lenders as to the true value of their mortgage collateral," the Appraisal Institute said in a statement. "In some markets there are so many distressed sales that they are the market and must be considered."

CREDIT CARD BILLS ARE BEING PAID BEFORE MORTGAGES

Historically, mortgages have tended to be the last bills consumers failed to pay, but according to a study by TransUnion, that has changed. The credit union, based in Chicago, said that since the first quarter of 2008, more consumers are current on their credit card bills and behind on their mortgage payments than those who are current on their mortgages and delinquent with their credit cards.

Of the consumers who defaulted in the fourth quarter of 2010, 52% kept their credit cards current while letting their mortgage go and 22% defaulted on their credit cards while keeping their mortgage current, according to TransUnion figures.

"The reversal of the traditional payment hierarchy was driven in large part by home value depreciation and rising unemployment, both of which speak to consumer and ability to pay their mortgages versus their credit cards," said Ezra Becker, a vice president of TransUnion." Home value concerns and stubbornly high unemployment continue to drive this dynamic, though the decline in the number of consumers delinquent on mortgages and current on their credit cards may be a sign that the divergence in the payment hierarchy has peaked."

ASK MARTITIA

QUESTION:  Some states require that appraisers be paid a fee based on the appraised value when appraising property for probate court. Such a fee arrangement is in violation of USPAP. Is an appraiser allowed to accept a probate assignment in such a state?

MARTITIA:  Yes, because the Jurisdictional Exception Rule of the Uniform Standards of Professional Appraisal Practice apply in this situation. The appraiser must explain the state's requirement that conflicts with USPAP in the appraisal report.

Martitia Mortimer, Elliott's executive vice president, answers appraisal questions on a regular basis in Elliott Evaluation News.

QUOTES  

"The first step to getting the things you want out of life is this: Decide what you want."  – Ben Stein

"We cannot defend freedom abroad by deserting it at home."  – Edward R. Murrow

"Someone's sitting in the shade today because someone planted a tree a long time ago."  – Les Brown

"A successful man is one who can lay a firm foundation with bricks others have thrown at him."  – David Brindley

"What some call health, if purchased by perpetual anxiety about diet, isn't much better than tedious disease."
                                                                                                                                   – Alexander Pope

"The second day of a diet is always easier than the first. By the second day, you're off it." – Jackie Gleason
 

Newsletter Editor: kevin@elliottco.com
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