Where Do You Think "geographic Competency" Begins And Ends?

[Carnivore]

So I suppose I could answer all of the scenario's - Yes! Based on there was not time limit on meeting competency. Since I am the sole judge of whether I am competent or not then I must answer yes to all of them. You did not put a time limit or any other restrictions and its all on me to determine my competence. For that matter I don't even need an assignment to become competent in any area of the US, unless you throw in state Licensing. Licensing would be a the only hindrance, since I have not been determined to be competent by a State Regulatory Board.

 

[Randolph Kinney]

Licensing would be a the only hindrance, since I have not been determined to be competent by a State Regulatory Board.

And what does the controlling authority know about competency? Only what is deemed necessary by state politicians and the ASB, AQB.

 

[J Grant]

To some geo-compentency begins (and ends) at the end of their personal driveway or as far as their eye can see from there or the most remote area of their respective MLS coverage. Myopic thought processes are not limited to appraisers but seems inherent in some. I have personally performed appraisals 4 + hours from home in beach front communities for several different private clients over the years. I made the clients aware of my lack of geo competency in the area(s) and that it would take some due diligence to come up to speed etc. In the end I was able to spend several days to a week at the beach and provide the clients what they wanted, an unbiased opinion of value. These were some of the most rewarding (monetarily and developmentally as an appraiser) that I have ever done. I wish I could do this more often, maybe with a 50/50 split between beach front summer assignments and ski slope front winter assignments as the ideal. In any case, developing Geo Competency is not Rocket Surgery that requires years of local occupancy as some might suggest. Does that mean the end of the local yokel best appraiser? Hardly. Sometimes it is what it is as it always is when developing an opinion of Real Estate value...

Sounds like a good experience! However note these were special properties /assignments for a private client- what lender or AMC would pay an appraiser to do this and let them spend several days to a week immersing themselves in the area to get competent results. Very few , if any, and not for regular assignments which was what poll was about. Most of us under these kind of ideal conditions could do a good job and appraise a home in an area unfamiliar to us. Which is different than appraising it from a desk and never setting foot there, which is where these assignments are headed for lender work aka bifurcated as bought into the discussion. Because it makes no sense, monetarily or time wise for lender /AMC clients to send an appraiser far away to areas they don''t know to appraise a regular house, these clients already have panels of local appraisers for these assignments.

 

[J Grant]

Danny has asked repeatedly where the line of geo competency and doing the research aka for std -12 or 3 lies. imo they are two different things that can intersect, but they are not one and the same..

Geo competence means the appraiser already knows the area, the various influences in a region beyond the smaller assignment specific town or subdivision. This knowledge gives them context, and they can devote most of their research to other things than getting familiar with the area. Whereas an appraiser new to area will have to spend time learning enough about the immediate assignment subdivision or area, enough for that one assignment, they still are not "geo competent" in that regional area.

Many buyers are local to a region-, while out of state or region comprise some portion of buyers a portion, typical activity sees many local within region purchasing-people have jobs, family, other connections to an area. They know, and compare various subdivisions and parts of that region to another in making purchase decisions, they are "geo competent" in other words. The seller knows the area since they own a home there. If a buyer does come from out of state or region, unless it's an unusual situation, they can devote a good chunk of time getting to know the area, besides any online searches, they may make several trips in to view properties, and or work with local agents scouting for them etc - they spend far more time getting to know an area than an appraiser will for a one off assignment.

Which brings up a question . the market value definition references a well informed or well advised buyer and seller. That includes the area, since location is a driving force for RE selection. Does it make sense for an appraiser to be less well informed about an area than the typically motivated buyer and seller?

How will an appraiser, or client , be able to defend a report when it is pointed out to them by a reviewer, or RE agent, buyer or seller, that the appraiser never worked in the area before, or in case of a desktop, never even went there? If these bifurcated or desktops expand to origination appraisals the questions will come up.

 

[Mr Rex]

Danny has asked repeatedly where the line of geo competency and doing the research for an assignment lies- imo they are two different things. An appraiser has to do research for every new assignment, what that comprises will depend on assignment SOW and knowledge of the appraiser.

Geo competence means the appraiser already knows the area, even if they have not appraised in that particular subdivision; this knowledge gives them context, and they can devote most of their research to other things than getting familiar with the area. Whereas an appraiser new to area will have to spend time learning enough about the area to do a competent job and may lack a context for some of what they learn.

Many buyers are local to a region-, while out of state or region comprise some portion of buyers a portion, typical activity sees many local within region purchasing-people have jobs, family, other connections to an area. Sellers know the area since they own a home there. If a buyer does buy from out of state or region, unless it's an unusual situation, they can devote a good chunk of time getting to know the area, they may make several trips, work with local agents scouting for them etc - more time getting to know an area than an appraiser will for a one off assignment.

Which brings up a question . the market value definition references a well informed or well advised buyer and seller. That includes the area, since location is a driving force for RE selection. Does it make sense for an appraiser to be less well informed about an area than the typically motivated buyer and seller?

How will an appraiser, or client , be able to defend a report when it is pointed out to them by a reviewer, or RE agent, buyer or seller, that the appraiser never worked in the area before, or in case of a desktop, never even went there? If these bifurcated or desktops expand to origination appraisals the questions will come up.

As if folks don't move to Cities and Towns 1000s of miles away on a daily basis...

 

[Randolph Kinney]

However note these were special properties /assignments for a private client- what lender or AMC would pay an appraiser to do this and let them spend several days to a week immersing themselves in the area to get competent results.

Credit union. $600. 2 weeks.

Several estate clients. 4 weeks.

Not everything goes through an AMC, not everything is for lending.

 

[J Grant]

Credit union. $600. 2 weeks.

Several estate clients. 4 weeks.

Not everything goes through an AMC, not everything is for lending.

I get it, not everything goes thorough lending, but for res typical houses, , lending is the bulk of work.. DWiley is cheif appraiser for an AMC, is he participating in this thread because he's curious about private clients assigning out of area appraisals? I don't thnkk so. GHatch referenced an average typical house, not special or complex property. Bifurcated appraisals which entered the conversation as a future use for out of area work is lender related. TMD who also is on this thread is chief appraiser for PMI (lender related) The concern about out of geo area is for the lender related work, rather than about how it applies to private clients The least any of us has to worry about is getting an estate assignment with 4 weeks to complete.

 

[J Grant]

As if folks don't move to Cities and Towns 1000s of miles away on a daily basis...

I covered that in the post I made...read the part that says -"If a buyer does buy from out of state or region, unless it's an unusual situation, they can devote a good chunk of time getting to know the area, they may make several trips, work with local agents scouting for them etc - more time getting to know an area than an appraiser will for a one off assignment."

And if a buyer does not spend time for due diligence about an area, and purchases in a region far away that they are poorly informed about, that is when we might see buyers make "stupid purchases", vastly over paying in some cases.

 

[Randolph Kinney]

I get it, not everything goes thorough lending,

You don't get it. One example I gave was a credit union that sent me to another county for a purchase appraisal because there was no appraiser on their panel that covered that area. The credit union thought highly of my competency to perform the assignment given enough time to research and familiarize myself with the area and the market. It was a very rural area.

Even an AMC would not have appraisers that cover that area for $300. Just not enough volume to make it worthwhile for appraisers nor AMCs. Lucky me, I quoted $600 and 2 weeks. I did not want want it but I got anyway.

 

[J Grant]

You don't get it. One example I gave was a credit union that sent me to another county for a purchase appraisal because there was no appraiser on their panel that covered that area. The credit union thought highly of my competency to perform the assignment given enough time to research and familiarize myself with the area and the market. It was a very rural area.

Even an AMC would not have appraisers that cover that area for $300. Just not enough volume to make it worthwhile for appraisers nor AMCs. Lucky me, I quoted $600 and 2 weeks. I did not want want it but I got anyway.

So what? We all have examples of individual special circumstance assignments. You don't get it that these special assignments are not the concern, such as given 2 weeks and $X fee you wanted, what is the problem with that? The concern is how out of are geo competence this might play out in bulk of lending work...not a one off credit union or private assignment that happens on occasion with ideal time and or fee to appraiser ...