appraisal institute 2005 annual fall conference additional structural inspections

Appraisal Institute2005 Annual Fall Conference

ADDITIONAL STRUCTURAL INSPECTIONS

“When to mention them & what to look for”

• Claim Alert (excerpt) - by Liability Insurance Administrators

• Conclusion:• More clients than ever are demanding that appraisers perform

“home inspections” exceeding the scope of an appraiser’s duty. Other than declining assignments, appraisers do not have much recourse. Therefore, it is important to add clearly written additional language to the appraisal report, showing:

• 1. You noted a condition may exist;• 2. You requested information and included the facts provided;• 3. You recommended an inspection by a qualified expert.

Major Structural Components

• SOIL

• DRAINAGE

• CONCRETE

The BOX

• What is the foundation anyway?

• The concrete or the ground below it?

• Answer: The ground below it.

• Concrete: Keeps your wooden box off the ground.

• “Rocking chair in the sand”.

• The “True Foundation” is the ground.

The COFFEE POT

• When water comes in faster than it goes out, what happens? It overflows.

• When you see a puddle, what’s underneath it? Water.

• When water puddles or flows – it’s saturated below.

• That’s how drainage systems work. • Water flows on the bottom of the trenches. • And yes, it’s saturated below. • Drainage systems (trenches) simply lower the

water saturation levels.

Appraisal Concern Scenario

• Is an $80,000.00 Mercedes with a smashed rear end still worth $ 80,000.00?

• That’s the question.

“Ice Story”

• There’s always a solution.

Two Things People Want to Know

• The Future.

• &

• What it will Cost.

Position Yourself to Observe

• Imagine we are in a room and sit down together. I see a window and you see a door. We’re both in the same place but see different things.

• How you think determines where you sit.

• Where you sit determines what you’ll see.

• What you see determines what you’ll do.

What You See Determines What You Do

• What do you see?

• What would I see?

The “Approach”…..Fly by• Look at the land. Rolling Hills. Flat lots. High Spot. Low Spot. • Look at the sidewalks and curbs. Any displacement?• Do the sidewalks toward the front door seem OK?• Do they have gutters?• Are the downspouts connected?• Does the soil slope towards the structure or away from it?• Look at the roof. Is it in a plane? (if not, it could have settlement

problems). (Good Trick)• Walk around the structure. See any cracks to the exterior? • Was it painted recently or a long time ago?• See any cracks to the exterior of the structure? If so, how big?• Anything seem unusual?

Look “Inside”…..Zoom in

• Use your feet.

• Doors.

• Askew “Off Parallel” Lines (Good Trick)

• Any Large Cracks?

• When last painted. Interior and exterior.

• Anything seem unusual?

Look “Underneath”…..Zoom Under

• Any “big” cracks in the concrete? (can you put your hand in them?)

• Is the soil wet?

• Any massive white “efflorescence” on the concrete? If so, there could be water issues.

• Anything seem unusual?

Conclusion…..“Houston, we’ve got a problem” (or not)

• Conclusion at the end. (not in the beginning)• See any OBVIOUS movement?• See any OBVIOUS settlement?• See any OBVIOUS displacement?• See anything OBVIOUS that makes you feel uncertain?• If so…..NOTE IT!

• Race car drivers look at RPM to determine the limits of their engine. They don’t want to exceed their maximum RPM “Red Line”.

• Determine where your “Red Line” is for your appraisals.

• Suggest you have preset limits in your own mind regarding structural matters so that when you do come across them, you can correctly advise further inspection.

• Analogy: You can’t tell if a line is crooked until you put a straight line next to it.

WHAT DID WE LEARN?• 1. The “True Foundation” is the ground (soil).• 2. The concrete basically keeps the wooden box off the ground.• 3. Drainage systems lower the water table. Wet at a lower elevation.• 4. Structural Overviews (for Appraisers)• 4.1 The Approach…..“Fly By”• 4.2 Look Inside…..“Zoom In”• 4.3 Look Underneath…..“Zoom Under”• 4.4 Conclusion…..“Houston, we’ve got a problem” (or not)•• Final Thoughts.• You can’t go wrong if you always ask yourself:

• “What is the wise thing to do? And, make the right decision.

• Anderberg Construction Consulting Company (510) 482-2779