Home 2018 - Volume 62 - Book 2 Improve your appraisal writing skills

Improve your appraisal writing skills

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Improve your appraisal writing skills

By John Peebles, AACI, P.App, (RPF Ret.). John currently practices real estate consulting and valuation as the principal of Land Ethic Consulting Ltd., Victoria, BC

“Give us the tools and we will finish the job.”

 (Winston Churchill, February 1941)

Real estate appraisers rely on a primary communication tool – technical writing – to clearly explain our opinions to clients. How well do we communicate – is there clarity or fog? This article provides my take on best practices for appraisal communications and offers recommendations for improving the clarity of our reports.

After 35 years of public and private sector experience reviewing narrative appraisal reports, I have concluded that appraisers frequently depart from the principles of clear writing. A client who has laid out thousands of dollars should expect a report that is a joy to read, not a Rubik’s Cube experience of searching for links between the author’s logic, opinions and conclusions.

I note that other technical professions, such as accountants, scientists, engineers, and software programmers, also struggle with technical writing. Common issues are the failure to write for the audience, an inability to write clearly or follow the rules of English grammar, a passive rather than active tone, and lack of brevity. Poor writing is a communications barrier that can leave clients and others with a negative (perhaps unfair) impression of your skills and abilities.

Write for your audience

The goal of an appraisal report is to communicate the author’s opinion of value to a specific audience. The audience may be knowledgeable about real estate (e.g., owners, investors, lenders) or may have limited or no experience with valuation matters (e.g., the courts, non-government organizations, government, general public). Your aim is to put the reader first and avoid the abstract.[1]

You need to consider the appraisal literacy of your target audience and focus on what is important to them. In the appraisal reports I see, this principle is often forgotten. An example of ignoring the audience is often encountered in the Market Overview section of a report. It should provide the context and set the stage for the valuation analysis to follow. Written well, the reader not only understands the context of the Market Overview, but is intrigued to learn more. Yet, most Market Overviews end up as a dumping ground of random demographic and socio-economic statistics bundled together with anecdotal information. Some Overviews are so detailed that they would be the envy of the local Economic Development Commission. Market Overviews may be 30% or more of the entire report, detailing everything you would ever want to know about Victoria, Vancouver, Brampton, or Montreal, if moving there from Outer Mongolia. However, if a reader owns a residential rental building, information about retail and industrial markets may not be useful. University attendance, weather, transit and ferry service, or the trend in office vacancy rates for the past five years may also be of little interest or use to that particular reader. The residential rental building owner needs information about the residential rental market and answers to these questions: what buildings compete with my building; who are the likely or typical buyers and sellers; and what are the trends in vacancy, cap rates, and rents?

Also, do not let the Market Overview section suffer in isolation. It is a waste of time and space to complete a comprehensive Market Overview and then never refer to it again in the subsequent highest and best use and valuation analysis sections of the appraisal report. You must eliminate the non-essential and boilerplating – tailor the Market Overview and other sections to focus on the property being valued. Aim for a punchy conclusion, where you offer a reasoned analysis of the competitiveness of the property in relation to its peers (i.e., investment appeal) and then draw on these findings later in the report.

Writing clearly

Like all professions, appraisers rely on technical jargon and acronyms as shortcuts to communicate complex processes. But, picture the non-technical reader: excessive use of jargon is akin to reading the newspaper where every second word is in Spanish. A reader should not have to guess the meaning and fill in the blanks. This quote sums up the problem with jargon.

“The bottom line is that you educate people by explaining complex ideas in a simple way, not by explaining simple ideas in a complex way.”[2]

Ideally, you should use plain English as much as possible. Explain terms as if speaking to a non-technical friend or relative. If you must use jargon, ensure you define it and always spell out acronyms in the first use. Some audiences have higher expectations for linguistic clarity in appraisal reports. For example, the courts or a tribunal may expect a lexicon of terms at the beginning of an appraisal report.

When it comes to the volume of words, less is usually better for clarity of facts, reasoning and opinions. Consider the following wordy examples and their slimmed down versions.

Wordy:                        An inspection of the property terrain revealed that it was moderately sloping down at 20%.

Clear and concise:   The property slopes downward at 20%.

Wordy:                        Most of the industrial indices are now dated, however, it has been the appraiser’s market observation that industrial land values have been relatively flat over the past decade and, indeed, have declined in some areas, as there have been many mill closures, etc. which have created a surplus of acreage industrial sites in rural and small town locations.

Clear and concise:   There is an over-supply of acreage industrial sites in rural and small town locations. Land values have been flat over the past decade. 

Notice that the same message can be conveyed more accurately with fewer words.

Active or passive writing style

The passive voice may be Public Enemy Number One when it comes to style problems in professional writing. Passive writing is often wordy, convoluted and mind numbing to read. It also tends to be ‘impersonal,’ where the sentence structure hides the author’s identity, and, in a way, prevents you from taking credit for your own great work.

The move to plain language makes for clear, unambiguous and concise writing. An active writing voice is more effective at capturing a reader’s attention and conveying your thoughts clearly and succinctly. However, writing in the active tone moves us out of our comfort zone. An ‘old school’ perception is that convoluted writing sounds smarter. Similarly, an enduring belief is that speaking in the first person is unprofessional. Judges have traditionally provided written judgements in the third person, but this is now changing to first person and plain English – so not only does the reader now understand the decision, but also knows specifically who is making the ruling, rather than some detached impersonal ‘other.’

Consider some examples of passive versus active voice, with the sentence subject highlighted in bold. In the active voice the sentence subject performs the action; in the passive voice the action is performed on the sentence subject.

Passive:                     In estimating the market value of the subject property, we have assumed the subject property is free and clear of any and all contamination and are to be marketed to a single purchaser and, it is our opinion, subject to our Assumptions and Limiting Conditions included in this report that the market value of the subject as of May 1, 2017 is $1,000,000.[3]

Active:                        In my opinion, the property’s market value, effective May 1, 2017, is $1,000,000. The value is subject to the Assumptions and Limiting Conditions in this report.

Passive:                     The preceding market information is considered the most representative of the property value.

Active:                        The property value is best represented by the preceding market information.

Some caution is warranted, though, as the use of the active voice in writing is not a universal rule. Active writing is good for emphasizing key messages and opinions, but can lose reader impact when overdone, such as a succession of short, clipped, to-the-point sentences with no variation. In some situations, the passive voice may even be preferable, when it is obvious or unimportant who is performing the action.

Here are some examples of using the first person to avoid vague or indirect writing.

Vague:                       It is the opinion of the author that …

Direct:                         In my opinion… or My opinion is…

Vague:                       One may find… or One may conclude…

Direct:                         I find… or I conclude…

Vague:                       This leads to our conclusion that …(gives false impression that a group is writing rather than a single author).

Direct:                         I conclude….

Vague:                       The appraiser (could be anyone) has determined that the Direct

Comparison Approach is most applicable for this assignment.

Direct:                         I conclude that the Direct Comparison Approach is the most relevant valuation method for this assignment.

Paragraph misdemeanors

I recall reading an appraisal report with a paragraph that started at the top of a page and ended halfway through the next page. By the time I got to the end, I had already forgotten the ideas and opinions expressed near the beginning. I picture a client, growing increasingly annoyed, while reading and re-reading this monster paragraph to extract its meaning, or, worse, perhaps giving up and not reading it at all.

A paragraph should be restricted to one idea. Think of it as a mini-essay, with an introduction, body and conclusion. Each sentence in the paragraph’s body presents a supporting point. The points should flow in a logical order; one common method is to flow from general to specific. Here is an example of a poorly worded paragraph with suggested improvements.

Before:                       With respect to topography, a large portion of the subject site lies within a central valley corridor that contains all of Main Lake and the headwaters of Spring Creek, which, with a series of other minor creeks, drain the Highlands Range that lies east of the subject lands. Main Lake is approximately nine acres in size and is more or less centrally located within the subject parcel. A new dock costing ± $15,000 was constructed within the past few months. A smaller lake, identified as Little Lake and located immediately south of the subject on the adjoining property, drains into Summer Lake, which then feeds Spring Creek and ultimately drains into Autumn Lake. The site is otherwise generally undulating with a stronger slope noted on the west side of the lake that leads towards the west boundary of the site.

Solution: split into two or more separate statements and eliminate non-relevant information.

After:                           Terrain: the west and east portions of the site slope down to a nine-acre lake (Main Lake) at the centre. The remainder of the site is undulating. Refer to the contour map in the Addenda.  [Note that the hydrology of Summer Lake, Spring Creek, and the Autumn Lake watershed were omitted, as they were not relevant to the assignment.]

Site Improvements: The property has a new floating dock (replacement cost of ± $15,000) located on the west shore of Summer Lake.

Archaic language and superlatives

Remove the following archaic terms and redundancies from your reports:

Poor:                           Thank you for this opportunity to be of service and I remain,

Better:                         Sincerely

Poor:                           Implicit in this concept is the further requirement that an adequate, sufficient and reasonable effort is applied to affect a sale.

Better:                         The opinion of value is based on a reasonable effort to complete a sale.

Poor:                           The analysis conducted of the indices is considered appropriate given all factors and this leads to a market value estimate for the subject property as of May 1, 2017.

Better:                         Eliminate sentence – it states the obvious. Why would an appraiser complete an analysis if he or she did not believe the sales analysis was reasonable?

More archaic phrases to avoid: my considered opinion; herein, enclosed please find; respectfully submitted; according to my research; null and void; fair and reasonable; hereafter or herewith; before mentioned.

Be careful about using superlatives like ‘extremely’ or ‘obviously’ in technical writing. These terms have no absolute meaning for the reader. For example, what is the difference between an active market and an extremely active market? If the property is obviously superior to the comparable sales – why is it obvious? Superlatives may also give an impression the author is an advocate or biased, rather than an independent professional – meaning non-compliance with Appraisal Institute of Canada ethical standards. Be warned that judges and lawyers are trained to pick out the use of superlatives in technical expert reports.

Poor:                           The subject lands are unquestionably under-improved (very low building site coverage), however, the existence of the lease effectively binds the titles and use of the lands to that of the existing use only.

Better:                         The subject lands are under-improved. However, the lease restricts the use of the lands to the current use.

Poor:                           Extensive historic research.

Better:                         Research.

 

Poor:                           The right of way is clearly excessive.

Better:                         The right of way is excessive.

Do not use these superlatives: exceedingly, exceptional, without equal, obvious or obviously.

Visual clarity

Even if your writing is excellent, the reader may miss your insights if the report is poorly formatted and difficult to navigate. Here are some tips for report formatting:

  • Use 1.5-line or 18-point spacing and an Arial font for easier on-screen reading comprehension.
  • Use bullets and sub-headings – these make it easier for the audience to quickly scan your report, follow the logic and understand the facts.
  • Sentences should be short with eight to 10 words for maximum impact.
  • Use graphs rather than tables – a picture tells a thousand words.
  • Cite your sources with footnotes – the Canadian Style Guide is recommended.[4]
  • Summarize the key findings at the end of each report section. Then cite these findings as support for the major opinions in your report: Highest and Best Use, selection of Value Methods, Value Indicators (e.g., sales, rents, cap rates), and Exposure Time.

Summary

Challenge yourself to improve your technical writing in 2018. Always have your readers in mind and keep searching for ways to help them find the information they are looking for. If you can reduce a sprawling 50-page report to a concise 20 to 30 pages, this will not only be easier and faster to read, but also more convincing to the reader. Clarity of communication makes for a happier client and a better showcase of your skills and professionalism.

End notes

[1] Harold Evans, Do I Make Myself Clear: Why Writing Well Matters, New York, May 2017. JB: probably don’t need to cite this

2 Ed Yong, On Jargon and Why it Matters in Science Writing, Discover Magazine, Nov 2010.

3 Appraisers have a habit using the term “subject” to refer to the property being appraised.  A more direct approach is to refer to the property being as “the lands” or “711 Yale Road” or the “Milner Building”.

4 JB: rather than footnote, can include with references at end

 

Additional resources

  • The Canadian Style Guide: A Guide to Writing and Editing, Dundurn Press Ltd. Toronto, 1997.
  • The Writing Centre, University of Wisconsin.

https://writing.wisc.edu/Handbook/CCS_activevoice.html

  • Purdue Online Writing Lab

https://owl.english.purdue.edu/owl/resource/539/02/

  • University of BC Learning Commons

http://learningcommons.ubc.ca/improve-your-writing/writing-resources/

  • University of Waterloo Writing and Communications Centre

https://uwaterloo.ca/writing-and-communication-centre/writing-resources/external-resources

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