For most types of properties, a traditional appraisal is sufficient for assessing its value. These can often be done remotely, without even having to physically inspect the property. But what about properties that are unusual and cannot be easily evaluated? In cases where a property is deemed atypical for its structural characteristics or due to unique market conditions, the appraisal is referred to as a complex assignment.
Complex assignments can, as the name might suggest, be seen as difficult or problematic — particularly when compared to the relatively straightforward nature of traditional appraisals. But, as an appraiser, taking on these challenging appraisals and gaining complex assignment experience can earn you higher pay, expand your client range, and simply give you a refreshing break from traditional cookie-cutter property appraisals.
So what exactly makes an appraisal ‘complex’, and how should these more challenging assignments be approached?
What makes a Real Estate Appraisal ‘Complex’?
In regard to real estate appraisals, ‘complex’ is a term which can be applied to anything unusual, unique, or problematic about a property. When carrying out a valuation of a property with uncommon features or which is situated in a certain location, it takes a qualified and experienced appraiser to ascertain the implications of these complexities for the property’s market value.
Properties that could be considered complex are those that have unique design or architectural features, historical value, structural or functional deficiencies, or unusual external circumstances.
Where a property is situated can also affect its value and call for a complex appraisal. This could include properties situated near bodies of water, in rural or remote areas, or which differ significantly from other properties in a particular neighbourhood.
Finally, the ownership conditions of a property can make for a complex appraisal. Examples of properties with unusual ownership attributes are those included in community land trusts, life estates, or leaseholds.
How to Approach a Complex Assignment Appraisal
A complex appraisal assignment can be intimidating, especially if you are only familiar with typical property appraisals such as tract housing valuations. But complex assignment experience is a valuable asset to have as an appraiser. They require a high level of competency and can take much longer than typical valuations, but the added complexity of these assignments usually corresponds to higher fees.
The fundamental approach is the same as it would be for any appraisal assignment. It requires using the same methodologies and valuation approaches. But because these are complex assignments, it is likely that the appraisal will require a combination of different valuation methods, such as paired data analysis, cost estimates for unique features, and a sales comparison approach.
Complex Assignment Appraisal Summary
Complex assignments refer to properties that are unusual or atypical. These appraisals can be challenging, so they require a competent and experienced appraiser armed with a tailored valuation approach.