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August 2018  Newsletter
Notes from a Disaster Recovery Workshop.

I went out of town the week of the "Jim Holy Trail Fire" started in Trabuco Canyon, Orange Co. and quickly spread into Corona and south to Ortega Hwy/Lake Elsinore, Riverside Co.

It was frighting to watch and hear the news about this fire in our own back yard.
My flight to Sacramento had 4 firefighters from Texas, traveling to help out in the Carr Fire.

  
In March of 2018, I attended a workshop in Sacramento @ the REEA (Real Estate Appraisers Association) on Disaster Valuations. I'd like to share some of my notes from this workshop.

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As Real Estate Professionals we can offer the following help and advice.
Most of us are "Re-active" and not "Pro-Active".

Pro-Active Suggestions:

1.  Don't Rush - Take your time. Phase 1 is the Emotional Loss 
2.  Get a copy of your insurance policy. 
How is the claim paid? 
What is covered and what is not? 
Replacement Cost - make sure you have RCV (Replacement Cost Value), not ACV (Actual Cash Value).
Site Improvements?, 
Code Upgrade Rider?
3.  Make sure you understand All the Options, before taking any major steps.
4.  Ask questions, get all the information.  Especially from their insurance carrier.
5.  Backup your Data to an "off site Cloud Service": photos, video's of the interior and exterior of our homes, copies of our insurance policies, loan documents, bank accounts info, prior appraisal report, receipts, credit cards, etc...

Re-Active Suggestions:
  
1.  Ask family and friends for photos of Family function photos: birthdays, weddings, holidays, etc.. - these photos not only are memories, but show interior & exterior features  
2.  Ask the lender(s) for copies of your old appraisal.  
3.  The insurance co will have a list of Items: furniture, jewelry, art, bedding, clothes,toys,shoes,kitchen items, etc. 
Make sure all items are correctly accounted for. 
4.  Data Source: tax records, planning dept/plans/permits, prior MLS listings. 


The homeowners may need several appraisals during the Claims process, Tax Loss, Litigation and Insurance Settlement. 

1.  Retrospective value - day before the disaster.
2.  After the disaster - when it is safe to return to the property, the insurance company will start the process to get their replacement cost (Cost approach) valuation. Building structures only.


Additional appraisals may be needed, following the insurance company's initial replacement cost valuation for:
  
Property Tax Assessment reductions challenge
Rebut the insurance valuation
IRS causality loss tax claims
other types of civil litigation
This process could take up to 2 yrs+ for the "immediate after date".

Things that must happen:
1.  Individual County issues Local State of Emergency 
2.  Govornor Declared Disaster Area
Before you can file for a Property Tax Installment Deferral

Calamity Claim Forms: Specific Rules:  
Damage $10,000 or more, Claims must be filed within 12 months of the date of the damage (verify local Ordinance), Value date is the Last Day of Month Proceeding the Month in Which the Calamity Occurred.
Properties Types to Suffer a Calamity:
Real and Personal Property, Business Equipment, Fixtures, Orchards, Agricultural, Groves, Vineyards, Boats/Vessels, Aircraft, Mobile / Manufacture Homes

External Stigma
Loss of Land Value due to chemicals,loss of views, mature vegation/trees.

Increase in Building Costs (concrete, drywall, nails, screws, wood, frame materials and labor ...etc
Slow rebuilding process
Overall Economy


Data Contributors:
REAA March 13, 2018 Workshop Casualty Loss and Post Disaster Valuations handout.
Penny Woods and  Bruce Ford
Assessors: Cristina Wynn and Cheif Appraiser Sacramento County: Jim Glickman, MAI. 
Steve Smith, MAI, SRA, and Ryan Lundquist.

                                              

 Susan Sauer
www.oc-appraisals.com
(714) 328-3115