Forensic Real Estate Damage Valuation Part 2

In Three Rules for Forensic Real Estate Damage Valuation: Deductive, Adductive, or Reductive Rule? (analysis) ForensisGroup experts Wayne C. Lusvardi and Charles Warren first describe valuation:

Alleged damages might be the result of a physical invasion; proximity to a nuisance; overreaching land use regulations; indirect benefit or burden transfers; some fickle and transitory notion of stigma; or irrational phobic reaction to some uncertain environmental substance or condition. From this starting point the forensic valuation consultant gathers evidence to determine if permanent damages have occurred. Like forensic engineering, forensic real estate valuation is similar to failure analysis and root cause analysis with respect to the methodologies and logic employed.

The term "forensic" is used here to connote the investigation of whether property values have been permanently damaged in the context of a trial of fact, pre-trial settlement, arbitration, or as a matter of public policy. Forensic valuation is like conventional real estate appraisal in that appraisers are held to a standard to not fudge the numbers, to avoid unacceptable valuation methods, and to shun undisclosed assumptions to back up a desired result. But the distinguishing characteristic of forensic valuation is its focus on the measurement of permanent property losses, its insistence on the use of consistent, logical, and legally appropriate valuation methods to the situation at hand, and its adherence to the scientific method that requires the reporting of unwanted results and disconfirming market data.