‘Fun’ to me is working on building my businesses, so I do not see too many movies. I was recently on vacation (well, let’s be honest—it was a ‘working’ vacation) with my wife, and we decided to go see a show. I immediately knew which flick I wanted to watch; Steven Spielberg’s War Horse.
It’s not that I have some affection for horses or a burning desire to learn more about World War I. Frankly, I went based on the recommendations of several other individuals that had already seen it. I was told, “This has got to be the show of the century” by one. Another said, “Do not wait till this one gets to the dollar show. You will not regret for one minute paying full price!” And, so it continued.
My take on the show? It was alright. The cinematography was pretty cool. Here is the problem; I went to this movie with expectations which were, frankly, nearly impossible to cash in on. Due to the over-the-top reviews I received, I expected something that even Spielberg would have a hard time delivering. The show was good (probably not $10 per seat good) but just did not live up to all the hype.
As human beings, I think we naturally want to believe good news. We live in a world where so much negative is constantly thrown our way that any glimmer of hope is a welcomed gift. I wanted to believe that this was the show to beat all shows. Reality was rude to me that evening. We, as appraisers, can fall into that same trap.
As real property appraisers, our job is to be unbiased in our opinions of value (wow, there is a dichotomy in that sentence). No matter our preferences, adjustments should only be made, they tell us, if the market can support it. Now, I will put a side-bar here, that in certain and unusual situations, some subjective adjustments must be made. That is the nature of the beast, but it should never become our norm. We should be very careful because it is far too easy to sink into the trap of adjusting for something because it just seems like we should.
As a young trainee, this dilemma was harder for me than it is now after years of experience. I remember one particular inspection. The home had custom everything! The lights were imported from Italy. The glass on the picture window had been shipped from Europe (I was told that no glass factory in the States could make it that big). The floors had been made from recycled wood from the railroad bridge where he had proposed to her. Even the fireplace was encased in rock that had been cut from the same quarry as the stone which made up the church where the couple had been married! This guy was a real romantic. I recall being very torn after walking through the home. What is a recirculating stream worth, anyway? It was a wise trainer who taught me then (and his words continue to echo in my mind years later), “Dustin, if the market can’t support an adjustment, it ain’t worth a penny.”
We often walk through homes where the owners have more pride in their castles than the average buyer might. Ever been shown the “upgraded contact paper” lining the bottom of the utensil drawers? I have. Like the movie, it is easy to be sold up the river because we naturally want to believe that something is better than reality. Fortunately (for our clients), we live in the world of reality where ‘two-thumbs up’ need to be supported with paired-sales from two other pairs of thumbs.
Now, go create some value!
Dustin Harris is a multi-business owner, but he has found most of his success as a self-employed, residential real estate appraiser. He has been appraising for nearly two decades. He is the owner and President of Appraisal Precision and Consulting Group, Inc., and is a popular author, speaker and consultant. He owns and operates The Appraiser Coach (www.theappraisercoach.com) where he personally advises and mentors other appraisers helping them to also run successful appraisal companies and increase their net worth. He is also the Founder and President of Your Appraisal Office (www.yourappraisaloffice.com) which implements some of the systems he has developed to help lower costs and free up time for real estate business owners. He and his wife reside in Idaho with their four children.