There seems to be an uprise in natural disasters in recent years, from hurricanes to flooding, tornadoes, wildfires and earthquakes. Damage is guaranteed to follow these events, bringing catastrophe to people and their homes. When a home hit by a disaster needs to be appraised, you must have the proper knowledge to complete it. A disaster appraisal is far different from a normal appraisal, and you may run into some special issues.
Issues During Appraising
Doing an appraisal on a disaster-stricken home has its challenges. The home and the area surrounding it can be affected so greatly, there are a wide range of challenges you could encounter:
- Partially damaged home: For property tax purposes, homeowners may want an appraisal completed on their home if it is partially damaged. The problem here is that the “as is” value may be completely different from the true value it could or once had held.
- Destroyed home: Valuing a destroyed home is difficult for many reasons–how do you value something that’s not there? For these cases, appraisers may have to reimagine the value based on past information about it.
- Surrounding area and community: For homes both affected and unaffected from the disaster, we also have to look at the surrounding area and how it was affected. For example, the home you are looking at may be untouched, but if the rest of the neighborhood took major damage it could definitely bring down the value.
- Finding comps: Post-disaster, it can be difficult to find adequate comparables in the area. When this happens, you may be forced to go outside the norm and look at other areas with similar conditions and apply those against the property.
Do Disasters Affect Your Business?
These disasters not only affect homes, but businesses as well. That includes your appraisal business! Right after a natural disaster strikes, you may see an influx of work requests come in. Homeowners will be wanting to get a reassessment of their homes for various reasons, including hoping to lower their property taxes, mortgage loans, or for their insurance company to assess for fulfilling a claim. That’s when it’s important for you to know the ins and outs of disaster appraising and what challenges you may encounter. After the community is rebuilt another increase in workload may come up. Homes will have been fixed back up and needing new valuations, especially in the case that an owner renovates to sell.
Disaster can strike anywhere, and when it does, you’ll be needed! Nobody wants to go through a natural disaster, and when you have to appraise a home struck by one, there will be difficulties. However, if you are prepared for the challenges that lie ahead, your appraisal business can flourish even in this time of crisis.
The post How Natural Disasters Affect the Appraisal Industry appeared first on Real Estate Appraisers.