A credible and convincing determination of value is essential in properties under litigation or disputes. Lawyers acquire the services of appraisers to perform duties as appraiser. Courts also appoint commissioners that will help in determining the just compensation of the properties in disputes.
“Most cases we underwent were for expropriation and eminent domain. While in the international level, we have assignments for marriage property dissolution and matrimonial property proceedings.” Appraiser Gus shared to Real Appraisal.
Appraisal for the court is performed when the property disputes are heard since usually the question on amount of controversy arises. The questions on specific amount of controversy always arise in a court session and only independent appraisal for the court will be able to become the critical factor which leads to a decision. In such cases the court needs a competent expert appraiser.
“We have the Finemore Walters & Story Solicitors, Grotewohl Law Firm in California, USA and Brisbane, Australia. In the local level we have GSE Law firm, CBASE Law among the list of big legal firms as clientele.”
AA Appraisal core services lies in an extremely well researched, documented and written appraisal reports. It ensures the quality of reports being generated because it is the fundamental building block in a successful litigation assignment.
Appraiser Agosto has been appointed recently by the regional courts of Talisay and Cebu City as an Appraisal Commissioner that will help in determining the market value of properties subject for just compensation.
“We were elated knowing that more and more lawyers and courts acquired our services.”
A leading power company acquired the services of AA Property Solutions to conduct due diligence and valuation of National Power Corporation (NAPOCOR) properties in Luzon.
The properties include a 25-hectares industrial lot which houses the biggest power plant in Northern Luzon. “The assignment is quite challenging, both the scope of work and the timetable.” Agosto explains.
The appraisal is in line with the state-run Power Sector Assets and Liabilities Management Corp. (PSALM) thrust on disposing its non-power assets as part of its real estate asset privatization program.
AA Property Solutions is not new in this kind of assignment. Having appraised properties of the shipyard and warehouses owned by SMC Lighterage Corporation in Iloilo, multipole properties and equipment of Pilipinas Water Resources Inc. in Cebu and a mountain resort in Toledo City, and their knowledge in intensive research and property search made the assignment a big success.
AA Property Solutions is a company founded by Appraiser Gus Agosto, serving as its Owner and Principal Appraiser. AA Appraisal has been chosen and trusted by more and more corporation, lawyers and government agencies. It continues in raising the standard of appraisal practice through intensive research and market analysis.
“Our appraisal is more intensive and detailed in analyzing the relation of the market, urban economics and environment to the market value of a property”, he said.
The appraisal firm now strengthened its valuation services along the lines of market studies, highest and best use, socio-economic studies, due diligence, title and property search.
The firm has also lend its expertise before courts, universities and government institutions, both here in the Philippines and abroad.
During the site inspection
Paperless office is one of the major tasks for every practicing real estate professional. Technology streamlines transactions and assignments to free more time for building relationships with the clients and in providing quality report.
Appraisers have lot of documents, photos, maps and sketch plans. Storing them in the cloud has made it easier to share and organize. You can share your data easily with clients and can even jointly collaborate on documents with others online.
“If you can perform the major tasks anywhere and away from office, you’re untethered,” Gus Agosto, the Owner-Appraiser of AA Realty Solutions, have said.
With your documents on the cloud, you avoid bogging down devices with every photo you’ve ever taken of your assignment. The other benefit is you won’t lose any of files if your computer crashes.
What’s important for appraisers, besides a comfortable camera, drone and high-tech computers, is always being able to access your programs and data WHEREVER YOU ARE: at home, office, branch office, breakfast, lunch, travelling, on client appointments, and at the title company.
Learning to make the most of new technology can be challenging, but staying on top of tech trends for business has become an important factor in every success.
“Real estate appraisal is overdue for cloud storage. Practitioners should appreciate the benefit of cloud computing. This is the future of real estate appraisal.”
Real estate transactions involve a significant amount of money and rights of individual. The due diligence process minimizes the risks and provides safeguards against determinable issues that may affect the real estate transaction.
Making the right decisions in real estate transactions can be a challenge without complete and accurate information. A traditional legal principle is “caveat emptor” or “buyer beware.” This is from the traditional rulings that courts would make that the buyer was stuck with whatever he or she purchased and would have limited recourse. Due to this likely result, buyers had to be extra cautious when making buying decisions.
Due diligence provides for a thorough investigation into a transaction. It helps the buyer learn more about the property, the documents, environment and operational fundamentals of the deal. This process helps avoid surprises after the transaction when remedies may be limited.
The actual scope of the due diligence process depends on the buyer’s needs and the transaction itself. If the buyer is a developer, he or she may have very different needs than when the buyer is purchasing the property for lease or investment. There are individuals who have a pending court case and interested in knowing the property to determine the site and use as evidence in court.
The due diligence process begins by determining the expected use of the property and use this information as a framework. Due diligence seeks to address a number of issues and identify important information for buyers. This information includes determining the property’s owners, boundary lines, the rights that come with the sale, the expected future use of the property and highest and best use as development options. The process should identify any issues related to the property title, easements, encumbrances, liens or other hurdles to complete ownership. Additionally, the due diligence process can reveal if there are any restrictions that might affect the use of the property or its development, such as environmental issues, zoning restrictions or legal compliance matters such as abiding by Agrarian Reform Law, NIPAS Act, Agriculture and fisheries Act, road right of way act, government programs and more.
The due diligence process can also reveal information as it is uncovered. For example, the technical description plotting cannot be close may pop up after the document analysis is conducted. Additionally, it is important to determine the real estate market and demographic data to predict the future demands in the area. Site inspection will determine the actual topography, terrain, shape, boundaries, neighbourhood and existence of any occupants or informal settlers in the property.
Last but not the least, is the environmental assessment, to uncover any daunting environmental hazards or issues of the property such as gas leak, wet lands, or use of the property as manufacturing in the past.
The due diligence process is very important. Adequate time must be reserved for this process to be conducted thoroughly and carefully. Party in a transaction should be encouraged to provide specified documents and information to ease the transaction. Be aware of all interests, liabilities, expenses and possible uses for the property.
This information will allow parties in transactions to make an informed decision.
Urban Planner Gus Agosto, a faculty of the University of San Carlos, was conferred with Fellow Status by Social Watch Philippines and People’s Public Finance Institute at the University of the Philippines, Lahug, Cebu City,
Social Watch Philippines is the network of hundred non-government organizations that initiated direct citizens’ participation in national and local budget processes through the Alternative Budget Initiative (ABI), while People’s Public Finance Institute is a center that educates the general public, civil society organizations and individuals on national and local public finance processes working under the framework of citizens’ participation.
Fellowship is an honor bestowed upon individuals that contribute in further strengthening citizen’s engagement in public finance. The new Fellows are drawn from academe, practitioners and graduate students across Central Visayas.
“I feel quite honored that Social Watch bestowed Fellow Status upon me,” Planner Gus said. “By doing so, they have acknowledged my teaching work in public finance and its contribution in important ways to students, professionals and the broad public. It is both gratifying and humbling at the same time.”
As a faculty, he is teaching public finance at the University of San Carlos, Cebu. “I’m very interested with the topic, being an urban planner and economist; I’ve been involved in various ways in public finance.“ Planner Gus also has a professional interest in the role that a Fellow can play in supporting and improving public involvement in government finance.
Prior to the conferment, a two-day discussion on the development of public finance and citizen’s engagement was held in collaboration with Social Watch Philippines, United Nations Development Program and University of the Philippines-Cebu.
After US, now in Australia.
Appraiser Agosto provided an appraisal consultancy and service to Australian court. The respondent in a matrimonial property settlement in Federal Circuit Court of Australia acquired his services to provide an opinion of value for properties involved in a litigation.
“I was informed by the solicitors of my client that my appraisal report has been forwarded to the court and now forms part of the evidence,” Appraiser Gus said during the meeting of PAREB-Cebu South.
On August 3, 2017, Finemore Walters & Story Solicitors of Brisbane, Australia wrote a correspondence to Appraiser Agosto, “As part of finalizing the matrimonial property settlement proceedings, in which under the Australian Law, it should be under oath and notarized by the Philippine solicitor to be accepted as an evidence in court.
The Finemore Walters & Story is a law firm for the respondent and specializes in family law and business.
The Federal Magistrate Court of Australia has just ruled to require valuer to sign an affidavit making reference to the report and certify as true and correct.
Appraiser Gus says that the rules in court litigation support in Australia is quite rigorous. Appraisers interested in venturing court appraisal should read the court guidelines like the Federal rules 2001 and other guidelines. Besides notarization cited above, the court require valuer to execute and provide certification of no conflict of interest and the independence of the appraisal.
With his experience in a range of court cases, from divorce settlement, estate taxes to appointment as court commissioner on expropriation and just compensation, Appraiser Agosto fitted in the job. Recently, he was summoned by the San Joaquin County Superior Court in Stockton California, USA to be an expert witness in a divorce settlement case.
Appraisal litigation is a challenging assignment. One of his most interesting case involved in appraising properties and title search. The client, a US Immigrant, have won the case and obtain his share in the matrimonial properties.
“In all cases, the appraiser should consider the caveat in court litigation in this line of work. The report will be scrutinized, and challenged in court. The opposing counsel will surely hire the services of another appraiser with the objective of defending their value as more accurate, reliable and objective. The challenge is to defend your work.”
As a final advice to appraiser who are interested in this line of work, he shared that an appraiser should work hard and practice due diligence, relevance and objectivity. Always have the facts and know the property inside and out. “Know the property, the law and the market well’, Appraiser Gus Agosto concluded.
Thinking outside the box is essential in the valuation profession. It only makes sense that drones would come to be in the hands of appraisers.
In recent appraisal assignments, appraisers’ uses drone in site inspections. Drones provide unique perspectives on properties, giving appraisers more information to use for a credible appraisal report.
“It allows us to get up higher, get a better view of the roof and rotate 360 degrees above the property to provide a view of the surrounding properties,” Appraiser Gus said. “We could not provide that footage without using a drone.”
There are many advantages in using drone for appraisal. One is the ability to access hard-to-reach places. Areas considered previously unobservable such as roofings, gutters, easements and more, can now be seen using the correct equipment. Not only can these items be observed, but areas of interest can be identified for additional inspection.
Drones can be specifically useful in commercial properties, large tracts of land where easements and prior improvements can be shown via photographs or video. This allows appraisers to observe and document a property in real-time on the date of inspection and will undoubtedly change the way many properties are viewed going forward.
These developments show that valuation profession is not afraid to innovate with new technology. It elevated the practice of profession to a new and higher level.
” Drones provide appraisers more information to use for a credible appraisal report.”
Location, location, location is perhaps the age-old adage that we have learned in real estate. Real estate market is dynamic, seldom static and always in transition, with property values either increasing or decreasing. Hence, the importance of analyzing the market is immeasurable.
Market analysis forms part of the appraisal report. It is done prior to the selection of comparables and determining the market area. The appraiser analysis the economy, political, regional situation, real estate developments, and its impact to the present and future land value. The purpose is simple, to know the present and predict the selling price of the subject property, if exposed in the market for a reasonable time.
In a typical assignment, the appraiser is customarily called in by a client not literally to know the “worth” of the property but to asked his judgment as to what the property would bring in a given real estate market. The market value of the property in a given market.
There are bricks-and-mortar defender and worship cost method as the most powerful in appraisal. But, the appraisers of today know that the materials of valuation flow from the real estate market. Cost approach is important but it should be anchored in the market analysis. In essence, cost approach is based in the market. The cost of materials which is used in the cost approach method is derived in the construction supplies market. The cost of gravel and sand is high in Cebu but not in Leyte. The labor cost in Metro Manila is different from that of the provinces.
What comprise the market?
Appraisal is market analysis- but what is market? As we all know, market is a place where buyers and seller meet. It is compose of micro market and macro-externalities. The micro market is where the action is- the seller meets the buyer, in a direct and competitive interaction that eventually results to a price determination. The macro externalities are the influencing factors like the economy, business condition, flow of money, inflation and others.
The economic crisis has put the real estate in a quandary. However, in time of surging business and economic development, the real estate market also grow.
Appraisers should know how to identify the appreciating market. Like the imbalance of supply and demand, presence of buyer and seller’s market, reduced marketing time for active and closed sales, increase in sales prices and existence or absence of seller concessions and whether property condition impacts marketability.
The presence of several factors would be a strong indication that the market is appreciating and appropriate analysis and adjustments for date of sale, time to comparable sales becomes necessary to produce credible assignment results.
Thus, the true nature of appraisal is real estate market analysis.