The ruling of a New York judge that President Trump defrauded banks and insurance companies by inflating the value of his real estate assets is based, in at least one prominent case, on Judge Arthur Engoron’s elementary misunderstanding of basic real estate law, according to industry insiders who have spoken with The New York Sun.

The director of the school of real estate at Florida International University, Eli Beracha, tells the Sun that the metric used by the judge is “not a good way to value the property” and is “not the right approach.” He adds that real estate professionals “don’t even look at county appraisal data,” which Judge Engoron relied on in rendering summary judgment. 

Mr. Beracha adds that “any real estate professional would say that market value and county appraisal are not the same thing,” and that it is “not the job of the county appraiser to assess value.” If it was, he explains, “we wouldn’t need Zillow.” County officials, like the ones in Palm Beach County that Judge Engoron cites, merely perform “drive-by appraisals” that are used to assess taxes, not total value. 

The president of the Palm Beach Board of Realtors, John Pickett III, tells the Sun that in pricing a property he “very rarely looks at the county appraisal,” and that the county’s estimate is “rarely a component factor” in how much he reckons a property is worth. He adds that the county appraisal can be “outdated or skewed,” or otherwise remote from the “pulse of the market.”   

One real estate attorney, Rachamim Cohen, tells the Sun: “I would not use, nor have I seen a bank use the County market valuation in obtaining a mortgage.” Mr. Beracha, the professor, agrees, explaining that “the appraisal value is detached from the true value of the property.”

The Sun has reported on widespread incredulity that Mar-a-Lago could be valued — as Judge Engoron suggests — at between $18 million and $27.6 million. One broker called it a “ridiculous” appraisal. The unnerving possibility that the jurist’s process could have been flawed underscores how the victory he handed New York could have short-circuited the clarification and corrections a trial on the valuations would have allowed.    

The possible error that they are pointing to suggests not just that the valuation Judge Engoron assigned to Mar-a-Lago is wrong, but that he used the wrong metric altogether, one that no real estate maven in the know would use to assess a property’s market value. It suggests that the whole basis of the trial that is beginning today — and is expected to last until nearly the end of the year — is based on a faulty judgment.

At issue is whether Mar-a-Lago’s worth as discovered by the Palm Beach County assessor is an indicator of market value, as Judge Engoron asserted when he found Mr. Trump liable for fraud. The former president asserted that the property is worth between $426,529,614 million and $612,110,496 million.

The public information officer at the Palm Beach County Property Appraiser’s Office, Becky Robinson, told the Sun that her unit possesses a “specific scope of responsibility when it comes to valuation of property for the purposes of taxation,” not the market value.

When it comes to assessing the market value, Ms. Robinson told the Sun, “I do not believe that our office would be the best to answer these questions,” suggesting that the estimation of a property’s value is outside of her office’s purview. Yet the benchmark used by Judge Engoron was precisely that prepared by Palm Beach County’s “Tax Assessor,” and the relevant document is labeled “Real Property Tax Assessor Record.” 

When the Sun relayed to Ms. Robinson the numbers cited by Judge Engoron, Ms. Robinson replied by email: The numbers “are our office’s determination of value for taxation purposes as of Jan. 1, 2022.” It appears likely that its utility as a benchmark for fraud would have been disputed at trial, and might yet be disputed on appeal.

Judge Engoron, as the Sun has previously reported, found that restrictions on the deed marking Mar-a-Lago as a social club depreciated its value and that Mr. Trump, fraudulently, did not relay that restriction to bankers and lenders.

One real estate broker, Lee Allen Schultz, though, told the Sun with respect to Mar-a-Lago that, “Just the land value alone, I think we get close to the $500 million, with just that alone, without even the property and how iconic it is — iconic before Trump even took it over.” 

Another broker working the Palm Beach market told the Sun that his own canvassing of the South Florida real estate consensus yielded a market value for Mar-a-Lago of between “$300 million to $600 million.”

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This story has been expanded from the bulldog.