Geographic Competence

[Carnivore]

Exactly. The spiel about bifurcated/hybrids is it allows appraiser to stay at desk and analyze the "data" which is ( they say ) "what appraisers do best ". But it in mass and over time it can devolve to analyzing data in a vacuum.

Because appraisers don't just anlayze data, they analyze properties, and as you astutely note, going into the market and walking sites /observing properties and neig.hborhoods / interacting with RE agents, builders, buyers, sellers builds a base of experience and knowledge which is what makes the appraiser credible at data analysis Because the appraisal is an integrated product combining not just data but data in the context of the properties and their locations.

Bolded above I will if I may add: In Real Time

 

[TRESinc]

there are lots of things one would never know from a desk. for example a number of years ago the ODNR decided they wanted to make all bodies of water (lakes, ponds, streams, rivers, etc) have public access at all points so they assumed ownership of all land up to the high water mark as determined by the army corp of engineers. the problem was they did not change all the deeds, just told the home owners what they had done. they instantly changed all waterfront homes into water view homes and significantly reduced their value, and on top of that the homeowners still had to pay the same taxes and in a lot of places the taxes were based on water frontage, not road. it turned into a 20+ year lawsuit that ODNR eventually lost.

one who does not actively work in a market with these types of properties would have no knowledge of that. hell some of the appraisers who do work in these areas didn't even know about it (based on reviews i have performed), so i guess there is an argument for the other side.

 

[jay trotta]

there are lots of things one would never know from a desk. for example a number of years ago the ODNR decided they wanted to make all bodies of water (lakes, ponds, streams, rivers, etc) have public access at all points so they assumed ownership of all land up to the high water mark as determined by the army corp of engineers. the problem was they did not change all the deeds, just told the home owners what they had done. they instantly changed all waterfront homes into water view homes and significantly reduced their value, and on top of that the homeowners still had to pay the same taxes and in a lot of places the taxes were based on water frontage, not road. it turned into a 20+ year lawsuit that ODNR eventually lost.

one who does not actively work in a market with these types of properties would have no knowledge of that. hell some of the appraisers who do work in these areas didn't even know about it (based on reviews i have performed), so i guess there is an argument for the other side.

My bold, so many things change within a 6 month time line and longer, therefore, handcuffing an appraiser to a Desk is as Risky as those "No Appraisal Needed" arguments. Has anybody figured out the cost of a federally approved "waiver" that goes sour ? I don't see any way to provide a "Customary & Reasonable" Fee for stupid; anybody got a Graph on that ??

 

[Tom Woolford]

After seeing how some out of county appraisers handle markets around here, I feel Geo Competency is almost as important as the piece of paper that lets them call themselves Appraisers. I used to work 5 counties a couple decades ago and started shrinking it when I realized that I wasn't really doing a very good job in some of the areas. Ultimately, I got my area down to one county. Now, I only work 3 zip codes and finally feel I really know what I am talking about. Can someone work an extensive area? Certainly. But VERY few take the time to really understand the markets. Wham bam thank you ma'am. Crank 'em out and get the check. That's the business model.

 

[chad hampton]

1 county? Some of your peers are signing hybrids reports in 3+ different states, sometimes in states that don't even touch other. All day long, every day. Getting rich $60 at a time.

Come to think of it, it might not be a bad plan, lose 1 license, go apply in another state and start up. By the time they take away all 50 licenses, you will be old and long gone.

 

[Overimprovement]

Very good points thus far, especially the notion of RE being fixed in time and location--sort of makes each assignment unique in that way.

But here is my problem--other threads have had many come out in support of (or at least not totally dishing) the hybrid model. Many I recall have minimized the importance even of the subject physical inspection, with some basically saying that is part of the equation that anyone with a minimum of training can do.

Heck, Fannie themselves do not appear too concerned about it with the products they are pushing, knowing full well the Pandora's box that these hybrids will open. AMC's and lenders certainly do not care. "Are you licensed in X state? OK, great, you're on the panel". I've never been asked how long I have been an appraiser in area X, just how long have I been an appraiser. Never--not once.

So where is everyone in support of not needing geo-competency? I mean if the subject inspection is not a necessary element for the actual appraiser who is signing the report, then why is geo-competence even needed? If I can assemble a credible report with another person doing the site inspection, what good does being 10 years in that city even matter? Think about it. Having good local market knowledge does not come SOLELY by seeing different property values on an MLS sheet, but seeing all the factors that are influencing those values, correct? Can that be done from behind the desk enough for a credible report?

If a one page desktop product that truly only took 45 minutes to do, but paid $150-$200 was available in a city 100 miles away from you (but still in your own state), and you got recruited to do those, I cannot believe some of us would not be tempted to do it. Perhaps some of us are already doing that. If you are doing it, why do feel you are competent to do so?

 

[Carnivore]

It's already such a mess. We have hybrids that are being signed by certified appraisers that are located in states thousands of miles away and based on online data, haven't even lived in my state in the past 5+ years at least.

The sooner these "alternative" products go away, the better. State boards should be addressing these products as they will seen be investigating them. Hate to think appraisers will sooner or later be in front of state boards defending these work products. Glad it won't be me.

I have not heard of this but it does not surprise me at all. Probably! What I don't think will happen is in-state appraisers completing these from a long distance. Such as someone who lives on the NC coast and appraising property in Asheville, because they will be in reach of the NC Board.

Might be a good time for the NC Board to publish their position on this topic. If they do publish something I hope it is firm by them stating something to the effect of "No Mercy" for offenders of USPAP, specifically GEO competence.

 

[EddieB]

It’s the lenders directly and through their agents ordering these assignments. With Fannie’s blessing.

This is happening whether we agree with the product or not. Fannie hasn’t responded to my complaints

During the course of doing my day job, I saw an appraisal for loan purposes. Realtor and property in NC and appraiser in NV. The report was worthless for anyone but the lender.

I think the E&O providers should address these products.

 

[Deleted member 150397]

Desktops and evaluations are not designed as appraisal replacements. My understanding is that they are designed as alternatives to a 3 week wait on servicing or refinance for a borrower good equity. Ultimately the lender chooses to loan money and often the cost in time and fees encourages this alternative. It's a watered down version of an appraisal and I feel it should be part of the appraiser's toolkit so to speak. Drive by work is similar but in today's age of data why does anyone need to visit a property they can see on the MLS, Google Street view, or satellite image. Any apprsiser claiming they can't derive a value without visiting the property IMO is not an appraiser. I mean that they aren't looking at or understanding market data but relying on their personal subjective feelings created during a site visit. I have literally seen this fist hand. An incompetent trainee was just as confused on the range of value before the inspection and after. Unfortunately I think this hybrid stuff hits hard on the apprsiser that doesn't know how to analyze data and theyre stuck in old inspection mode. My overall impression of our culture is a move towards equality and removing complexities from properties as maybe they are subjective and so not help people "buy or own" their houses. After all isn't this government push for ownership what has created the regulatory environment which caused the 2008 collapse??

 

[Meandering]

Desktops and evaluations are not designed as appraisal replacements. My understanding is that they are designed as alternatives to a 3 week wait on servicing or refinance for a borrower good equity. Ultimately the lender chooses to loan money and often the cost in time and fees encourages this alternative. It's a watered down version of an appraisal and I feel it should be part of the appraiser's toolkit so to speak. Drive by work is similar but in today's age of data why does anyone need to visit a property they can see on the MLS, Google Street view, or satellite image. Any apprsiser claiming they can't derive a value without visiting the property IMO is not an appraiser. I mean that they aren't looking at or understanding market data but relying on their personal subjective feelings created during a site visit. I have literally seen this fist hand. An incompetent trainee was just as confused on the range of value before the inspection and after. Unfortunately I think this hybrid stuff hits hard on the apprsiser that doesn't know how to analyze data and theyre stuck in old inspection mode. My overall impression of our culture is a move towards equality and removing complexities from properties as maybe they are subjective and so not help people "buy or own" their houses. After all isn't this government push for ownership what has created the regulatory environment which caused the 2008 collapse??

Personally I think trainees should memorize USPAP

along with the laws, rules and regulations that apply to the assignments they are in training to learn how to do.

and to learn the history of fraud committed by interested parties to real estate transactions, so that they don't get sucked in via collusion.

But hey, there's no amount of written regulations that can over ride a dollar from an interested party, apparently.

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