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Barry Hunnicutt on The Art of Real Estate Appraisal in Santa Fe
It was the best of times it, it was the worst of times; it was the best of appraisals and the worst of appraisals. These are words that have run over my mind since I started appraising in Santa Fe, eleven years ago. Santa Fe with its diverse and unique property types, coupled with the economic roller coaster of late, has made this a very challenging place in which to practice the art of appraisal. I say "art" because, essentially, appraising is the art of comparison. Many people in our profession speak of the subjectivity and lack of consistency in appraisals; I sympathize with their frustration. Appraiser's must rely on consistency of sales data on which to base their opinions, the more consistent the data the more reliable the appraisal. This is where the "art of comparison" becomes important.
The basic tool that residential appraisers utilize, is the URAR form developed by FNMA, which was essentially designed for tract homes. The challenges of adopting a complex, Santa Fe property to this form are obvious. However, there are ways for an appraiser to come to an understanding of the nuances of Santa Fe real estate and apply them in an acceptable manner. I start by determining, the quality of location, marketability and sales history of the location, land values etc. I then consider the size, quality of construction, finishes and attention to detail. This is the point where identifying the more subjective attributes of a property becomes an art. I find that I must constantly remind myself to be objective and overlook personal taste considerations.
There is a consistency and reliability to the Santa Fe real estate market that is in fact quantifiable. I am optimistic that Santa Fe will continue to prosper, for the simple reason there is no place else like it on earth.
Some thoughts on getting a satisfactory appraisal. One;. Interview your prospective appraiser; question him about how he/she perceives your neighborhood and the type of home you own. Two; document your home as thoroughly as possible, such as legal description, plat, age and updates or remodels you have done. Three; when you are ready to have your home inspected clean the interior and exterior as well as possible. Four; Put off any construction you might have planned until after the appraisal inspection.
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