Robert E James & Associates

When we initially spoke with The Client following his referral to us by a local real estate broker, he asked how to appraise a property We mentioned that there were three approaches which, if appropriate, could be used: the Sales Comparison Approach and/or the Cost Approach and/or the Income Approach The Income Approach is used to value typical commercial properties which produce rental income This approach may also be used for income-producing residential properties, such as apartments The Client's property was a custom owner-occupied single-unit house, so this approach did not apply The Cost Approach estimates the land value independently, then adds the estimated replacement cost of the improvements, after first deducting estimated accrued depreciation from all sources At this point, we had no information about his property other than that it was a house Following this conversation we checked public records to learn more about his property and develop an estimated fee for our work We learned that the house was built in 1986, and was years old Due to its age, the Cost Approach was not appropriate, as it is very difficult to reliably estimate accrued depreciation for improvements of this age Additionally, as a custom house with a good ocean view, the property would be most reliably appraised using the Sales Comparison Approach The Cost Approach's utility was further reduced by the lack of any sales of similar lots in this neighborhood, and the custom nature of their improvements We called The Client back and left a message that our fee would be $to appraise this relatively unique property No message was left offering to perform the Cost Approach based on the nature of his property Approximately eight days later he called and told us he had selected us to do the appraisal No mention of doing the Cost Approach was made by us The Client's house was built in the style of the 1980's, with a lot of rough-sawn wood The interior floor plan is a collection of relatively small dark rooms, with a basement workshop This is not typical of Good quality custom homes being built today, and added to the problems of estimating its effective age and, ultimately, its Fair Market Value The Cost Approach does not provide a good method of valuing such improvements Of course, we did not know this until we actually inspected the property The purpose of this appraisal was for tax filings to be made in connection with The Client's wife's death in December These appraisals must meet specific standards set by the IRS, and an appraiser must be trained to perform them properly We have been so trained I have been a licensed appraiser in California since licensing began in 1990, and have year’s experience To date, I have never received such a complaint When we met The Client we did not discuss using the Cost Approach As The Client stated, all the other appraisers told him they would use the Sales Comparison Approach, which is the approach we used The fact that our fee was (reportedly) higher was never related to doing a second approach It was the fee to appraise a unique property, which requires additional time and investigation We charge higher fees to reflect the additional work do to appraise his property We responded to The Client's questions in an email on February 24th We offered this written response after he did not answer our phone callsLater, we had a teleconference with The Client and the Broker who referred him to us It came out that The Client's real complaint was that we did not say his house was worth more than the house across the street which had recently sold The Broker reaffirmed that the Cost Approach was not typically used in his experience dealing with such properties, and he concluded that it would not be possible to satisfy The Client We agree He wrote to us again on April 10th, demanding that we pay him $or perform the Cost Approach In an effort to put this to bed, we will develop a Cost Approach to value for The Client, although the original report we submitted has by now probably been submitted to, and we believe accepted by, the IRS For the record, our report was complete and reliable for the purpose of our engagement We stand by it

Revdex.com:
I have reviewed the response made by the business in reference to complaint ID ***, and find that this resolution would be satisfactory to me. Since they have been late in all their dealings with me, I would like them to set a date for their completion of the appraisal
Just for the record:
At their first and only visit to the property I DID discuss with them that they would use methods
The only phone calls from them to which I did not respond, was a series of messages from them saying when they would complete the appraisal. Each message gave a later time
and in the event, they did not even produce the appraisal within the time given in their last message
Apparently at this point they don't remember the home. It is south and west facing with every room having large windows with ocean views. They could hardly be dark
Regards,
*** ***

When we initially spoke with The Client following his referral to us by a
local real estate broker, he asked how to appraise a property.  We
mentioned that there were three approaches which, if appropriate, could...

be
used: the Sales Comparison Approach and/or the Cost Approach and/or the Income
Approach.  The Income Approach is used to value typical commercial
properties which produce rental income.  This approach may also be used
for income-producing residential properties, such as apartments.  The
Client's property was a custom owner-occupied single-unit house, so this
approach did not apply.  The Cost Approach estimates the land value
independently, then adds the estimated replacement cost of the improvements,
after first deducting estimated accrued depreciation from all sources.  At
this point, we had no information about his property other than that it was a
house.  Following this conversation we checked public records to learn
more about his property and develop an estimated fee for our work.  We
learned that the house was built in 1986, and was 27 years old.  Due to
its age, the Cost Approach was not appropriate, as it is very difficult to
reliably estimate accrued depreciation for improvements of this age. 
Additionally, as a custom house with a good ocean view, the property would be
most reliably appraised using the Sales Comparison Approach.  The Cost
Approach's utility was further reduced by the lack of any sales of similar lots
in this neighborhood, and the custom nature of their
improvements.   We called The Client back and left a message
that our fee would be $750 to appraise this relatively unique property. 
No message was left offering to perform the Cost Approach based on the nature
of his property.  Approximately eight days later he called and told us he
had selected us to do the appraisal.  No mention of doing the Cost
Approach was made by us.
The Client's house was built in the style of the 1980's, with a lot of
rough-sawn wood.  The interior floor plan is a collection of relatively
small dark rooms, with a basement workshop.  This is not typical of Good
quality custom homes being built today, and added to the problems of estimating
its effective age and, ultimately, its Fair Market Value.  The Cost
Approach does not provide a good method of valuing such improvements.  Of
course, we did not know this until we actually inspected the property.
The purpose of this appraisal was for tax filings to be made in connection
with The Client's wife's death in December.  These appraisals must meet
specific standards set by the IRS, and an appraiser must be trained to perform
them properly.  We have been so trained.  I have been a licensed
appraiser in California since licensing began in 1990, and have 37 year’s
experience.  To date, I have never received such a complaint. 
When we met The Client we did not discuss using the Cost Approach.  As The
Client stated, all the other appraisers told him they would use the Sales
Comparison Approach, which is the approach we used.  The fact that our fee
was (reportedly) higher was never related to doing a second approach.  It
was the fee to appraise a unique property, which requires additional time and
investigation.  We charge higher fees to reflect the additional work do to
appraise his property.
We responded to The Client's questions in an email on February 24th. 
We offered this written response after he did not answer our phone
calls. Later, we had a teleconference with The Client and the Broker who
referred him to us.  It came out that The Client's real complaint was that
we did not say his house was worth more than the house across the street which
had recently sold.  The Broker reaffirmed that the Cost Approach was not
typically used in his experience dealing with such properties, and he concluded
that it would not be possible to satisfy The Client.  We agree.  He
wrote to us again on April 10th, demanding that we pay him $300 or perform the
Cost Approach.
In an effort to put this to bed, we will develop a Cost Approach to value
for The Client, although the original report we submitted has by now probably been
submitted to, and we believe accepted by, the IRS.  For the record, our
report was complete and reliable for the purpose of our engagement.  We stand by it.

Review: [redacted] was hired to provide a real estate appraisal of my residence.On the phone he said he would use two methods of appraisal; one method isby comparison to other properties; and the second method is by replacementcost. He also said the work would be done within 10 days for $750. He and his father then visited my house in person and took measurements and photos. We again discussed the two methods of appraisal and he agreedwith that, but would not start work until he was paid in full and would send me an invoice by e-mail. The next day I sent him a check.After 12 days, I called to inquire when the work would be done. He provided the appraisal the next day, but only used the comparison method.I had other quotes for $450 by people who said they would just use one method. I decided to pay more for hopefully a better estimate because it would be calculated two different ways. [redacted] has refused to completehis work by doing an estimate of the replacement cost. I then asked for a refund of $300 because the full work wasn't done and he refused that also.I have sent [redacted] a written request for either completing the work or a refund and he hasn't answered.Desired Settlement: [redacted] should either:1. Complete the work he quoted by calculating a replacement value, or2. Refund $300

Business

Response:

When we initially spoke with The Client following his referral to us by a

local real estate broker, he asked how to appraise a property. We

mentioned that there were three approaches which, if appropriate, could be

used: the Sales Comparison Approach and/or the Cost Approach and/or the Income

Approach. The Income Approach is used to value typical commercial

properties which produce rental income. This approach may also be used

for income-producing residential properties, such as apartments. The

Client's property was a custom owner-occupied single-unit house, so this

approach did not apply. The Cost Approach estimates the land value

independently, then adds the estimated replacement cost of the improvements,

after first deducting estimated accrued depreciation from all sources. At

this point, we had no information about his property other than that it was a

house. Following this conversation we checked public records to learn

more about his property and develop an estimated fee for our work. We

learned that the house was built in 1986, and was 27 years old. Due to

its age, the Cost Approach was not appropriate, as it is very difficult to

reliably estimate accrued depreciation for improvements of this age.

Additionally, as a custom house with a good ocean view, the property would be

most reliably appraised using the Sales Comparison Approach. The Cost

Approach's utility was further reduced by the lack of any sales of similar lots

in this neighborhood, and the custom nature of their

improvements. We called The Client back and left a message

that our fee would be $750 to appraise this relatively unique property.

No message was left offering to perform the Cost Approach based on the nature

of his property. Approximately eight days later he called and told us he

had selected us to do the appraisal. No mention of doing the Cost

Approach was made by us.

The Client's house was built in the style of the 1980's, with a lot of

rough-sawn wood. The interior floor plan is a collection of relatively

small dark rooms, with a basement workshop. This is not typical of Good

quality custom homes being built today, and added to the problems of estimating

its effective age and, ultimately, its Fair Market Value. The Cost

Approach does not provide a good method of valuing such improvements. Of

course, we did not know this until we actually inspected the property.

The purpose of this appraisal was for tax filings to be made in connection

with The Client's wife's death in December. These appraisals must meet

specific standards set by the IRS, and an appraiser must be trained to perform

them properly. We have been so trained. I have been a licensed

appraiser in California since licensing began in 1990, and have 37 year’s

experience. To date, I have never received such a complaint.

When we met The Client we did not discuss using the Cost Approach. As The

Client stated, all the other appraisers told him they would use the Sales

Comparison Approach, which is the approach we used. The fact that our fee

was (reportedly) higher was never related to doing a second approach. It

was the fee to appraise a unique property, which requires additional time and

investigation. We charge higher fees to reflect the additional work do to

appraise his property.

We responded to The Client's questions in an email on February 24th.

We offered this written response after he did not answer our phone

calls. Later, we had a teleconference with The Client and the Broker who

referred him to us. It came out that The Client's real complaint was that

we did not say his house was worth more than the house across the street which

had recently sold. The Broker reaffirmed that the Cost Approach was not

typically used in his experience dealing with such properties, and he concluded

that it would not be possible to satisfy The Client. We agree. He

wrote to us again on April 10th, demanding that we pay him $300 or perform the

Cost Approach.

In an effort to put this to bed, we will develop a Cost Approach to value

for The Client, although the original report we submitted has by now probably been

submitted to, and we believe accepted by, the IRS. For the record, our

report was complete and reliable for the purpose of our engagement. We stand by it.

Consumer

Response:

I have reviewed the response made by the business in reference to complaint ID [redacted], and find that this resolution would be satisfactory to me. Since they have been late in all their dealings with me, I would like them to set a date for their completion of the appraisal.

Just for the record:

1 At their first and only visit to the property I DID discuss with them that they would use 2 methods.

2 The only phone calls from them to which I did not respond, was a series of messages from them saying when they would complete the appraisal. Each message gave a later time

and in the event, they did not even produce the appraisal within the time given in their last message.

3. Apparently at this point they don't remember the home. It is south and west facing with every room having large windows with ocean views. They could hardly be dark.

Regards,