Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-06-01
REALTORS TO HEAR
ABOUT APPRAISALS
Committee Has Prepared a
Set of Standards to Pre-
sent National Convention.

The subject of real estate appraisals
will be given the spotlight at the
twenty-first annual convention of the
National Association of Real Estate
Boards, to be held in Boston June Is
to %.
Under the auspices of the associa-
tons appraisal division, a special COM
mittee on standards Of practice has
prepared a set of standards of practice
and code of ethics which form the
first statement ever issued by realtors
on appraising as to what constitute
sound and accurate appraisal methods.
This work, which has been approved
by the appraisal division and board of
directors, is set forth in a report which
will be submitted to the convention for
adoption.
If adopted by the national associa-
ton. these standards of practice VIII
define the procedure which realtor APP
praisers and appraisal committees of
real estate boards will be expected to
follow.
Regulations Specified.
The proposed standards of practice
would make the following specific regu-
lations governing fractional appraisals:
In a%ppraising the property to de-
termine the security for a loan, 1t has
been common practice to have n APP
praiSer to determine the value OF the
land Cor leasehold) and another the
value of the improvements. Frequently
the land (or leaSehold) value has been
derived without regard to the improve
ments thereon. such value being either
a market value as u~n1mproved or a
value as if improved to the highest
and best use. The value of the i'm
provements, on the other hand. has
been taken at deprecated reproduction
cost. Such appraisals of a fraction of
a property. under assumed conditions
which are or may be incompatible with
the conditions assumed in appraising
the other fraction, are called fractional
appraisals. The addition Of such frac-
tional appraisals to derive an opinion
of the total value of the property,
whether such fractional appraisals are
made by different appraisers or by one
appraiser, is called a summation ap-
praisal.
Appraisals Condemned.
"Such summation appraisals are con-
demned as unSound, inaccurate and
misleading, because this method bases
the opinion of value on the addition
of values which may not simultaneous
ly obtain, and ignores the effect of an
over, under or misplaced improvement,
n diSregardS the INTERPOLATION be-
tween land Cor leasehold) value and
the value of the improvement. This
method evades the fundamental ques-
ton, in the case of investment prop
critics, of the economic soundness of
the improvement in regard to the rela-
ton of its cost to its Reliability and
normal earning power"
A national appraisal contest will be
held at the Copley Plaza Hotel Thurs
day morning, June 81. John P. Hooker
will preside. The buildings which the
Boston Real Estate Exchange has
chosen to be appraised in the contest
are the Windemere, a combination
store and apartment building, located
at Boylston street and Massachusetts
avenue, as the business property, and
The Standard Plate Glass Co. Building,
270 Albany street, Cambridge, as the
industrial property.
Both buildings offer peculiar prob
lens to the appraiser. The Windemere
is an old structure with many obsolete
features, and it occupies exceedingly
valuable ground. The Standard Plate
Glass Co. Building is vacant and in
wolves the problem of determining its
value to a prospective purchaser, for
whose industry it possibly would have
70 nave expensive alterations.