Appraising In The Aftermath Of A Tornado-Birmingham, Alabama

Appraising after a tornado-Birmingham, ALHow do you appraise a home that has been destroyed in a tornado?  That is the question I got from a friend recently after I told him I had gotten some assignments in the storm devastated areas of Birmingham, Alabama.  I thought that since he was curious about this that others may be also.  I hope this post can provide some helpful information to those with questions about how an appraiser might value a home after it is destroyed.

This past week the Birmingham, Alabama area experienced its second major tornado in less than 12 months.  The first storm occurred last year on April 27, 2011, and on Monday of last week another major tornado hit in the Pinson, Clay, and Trussville areas of metro Birmingham.  When disasters like this occur, insurance companies must determine the property losses suffered by their customers.  Appraisers are often hired to estimate the market value of the home just prior to the loss.  Because the effective date of the appraisal is made before the day the appraiser actually looked at the property this is called a “retrospective appraisal”.  The appraisal is based on the condition the home was in before the storm occurred.

The appraisers major task is collecting information about the house from an on site inspection as well as from speaking with the owner to determine the condition of the property.  Recent updates or renovations are taken into consideration and sometimes pictures are provided that shows what features the home had as well as showing the quality and materials of construction.

After all of the physical characteristics of the home have been determined the appraiser can then go about finding comparable sales that match the property as close as possible.  Sometimes a long period of time may have passed between the loss and the day the appraiser looks at the property, but comparables must have sold before the date of value (or loss).  Other than recreating the physical characteristics and condition of the home the assignment is rather straight forward and similar to a normal appraisal.  If I can help answer any other questions you may have, please let me know.  Have you ever experienced the loss of your home in disaster?  Tell me about your experience.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

Comments

  1. Its a good idea to take pictures of everything for which one has bought insurance, load the information on one or more high quality reliable USB flash drive and stow it away in a bank locker or if you are like me and don’t like banks, any other safe place.

    • That is a very good point. It is a good idea to make an inventory list with pictures, serial numbers, and anything else to identify the property. An old appraisal can be used in the same way if something happens to your home. I have used old appraisals to get information on homes that experienced damage such as the tornados I wrote about in this post as well as homes that experienced a fire.

  2. Let’s hope for no more tornados this year. I’m glad you’re able to provide a necessary service though.

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