Newly licensed appraiser - $1M limit question

[skelly9131]

Can a licensed appraiser use comps in excess of $1,000,000 if the final value estimate is under $1,000,000?

Can a licensed appraiser use comps with a sale price in excess of $1,000,000 if the final value estimate is under $1,000,000? Someone told me that you can't but I think you can.

appraisersforum.com

This was recently discussed. Transaction value = federally related transactions. Given the intended use I think you are ok, but I am not from CA. Based on my reading of IRS qualified appraiser requirements, you are good there too.

Thank you for the info. I just followed with my state's board to see what they have to say about it.

 

[huntercharlie]

Hope you post their response...assuming you get one from the state. FYI...there's an ignore option on this site if you prefer to avoid various posters.

 

[CGinMN]

^^^Yes, follow-up and post their response so when others have the same question they can find the answer here.

 

[Terrel L. Shields]

I don't recommend it, but this has been an on-going problem for years. So you have 40 acres and a house and it is "residential" nothing complex about it unless sitting in the middle of town. Then you have 40 acres with a house and 35 acres are in soybeans, suddenly it is "commercial" ag report....what's different? The emblements? That isn't real property and in rural areas in the Ozarks the difference in a flat field of grass and one of soybeans is zero. Same with 4,000 SF bunny rabbit farm, or a barn for show calves for the kids Fair or 4-H, or the nice horse barn. The line between residential, complex residential, and non-residential is so blurred who could know?

 

[skelly9131]

I don't recommend it, but this has been an on-going problem for years. So you have 40 acres and a house and it is "residential" nothing complex about it unless sitting in the middle of town. Then you have 40 acres with a house and 35 acres are in soybeans, suddenly it is "commercial" ag report....what's different? The emblements? That isn't real property and in rural areas in the Ozarks the difference in a flat field of grass and one of soybeans is zero. Same with 4,000 SF bunny rabbit farm, or a barn for show calves for the kids Fair or 4-H, or the nice horse barn. The line between residential, complex residential, and non-residential is so blurred who could know?

The way I understand it, complexity is determined by the individual appraiser. So, I've already determined that this assignment is not complex given my knowledge and experience.

 

[residentialguy]

I always found it interesting how an appraiser knows that it is $950000 not &1,050,000. That smacks of fees based on the amount of what it appraises for. The house could probably support $1.1 million but since you can't appraise over 1 million $999,000 will have to do.

 

[Terrel L. Shields]

complexity is determined by the individual appraiser.

But does the board agree with you? I don't know and I don't think anyone would know, but if they found flaws in the report, they are very likely to assume it is above your competence level. But don't confuse competence with complexity. Complexity - poorly defined as it is - https://valuationmanagementgroup.com/what-is-a-complex-residential-appraisal-assignment/

Again, who defines "complex"? Is a log home complex? Is an underground home complex? A rural property? they are pretty vague about it. Would a leasehold be complex? And what about market conditions...who defines that as "complex"?

Our state is clear. The "transaction" value to them is market value you opine. Period. And regardless the lender, if over the limit you need a co-signatory.

Next question, have you asked your E & O provider what they think?

 

[George Hatch]

As I understand it the OP is a licensed at the SL level and the assignment in question is for a non-lending purpose. In CALIF, anyone can appraise anything EXCEPT in the assignment involved an FRT, which must be performed by licensed/certified appraisers.



Every limitation on qualifications after that occurs at the client or user level, such as when the GSEs or other lenders require their appraisals be completed by licensed/certified appraisers.

So for the OP it would be the user that would decide which appraiser or other individual would complete the assignment, with an eye toward what qualifications the IRS says is necessary for those assignments.

As for "complex" , that term is defined by the feds pursuant to their regulation of FRTs. It isn't defined in the Calif State Regs. Moreover, the banking regs are applicable to the bankers: it's up to THEM to determine whether or not the assignment in question qualifies as a complex per the definition that Terrell posted. "Transaction value" is also a Federal definition, not a Calif definition, and that is the loan amount unless the institution itself is buying a property in which case its the sale price.

Like I said, once you get away from FRTs most of these other limitations are imposed at the client or user level.

 

[George Hatch]

Competency is still a requirement for every appraisal a license/cert holder completes. Since the OP isn't a trainee there is no "supervisor" relationship to maintain. Any licensee can countersign an appraisal for any other licensee so long as they're meeting the other requirements for that assignment. I can sign for Fernando and Fernando can sign for me, if the circumstances arise that would require an additional signature.

 

[skelly9131]

Competency is still a requirement for every appraisal a license/cert holder completes. Since the OP isn't a trainee there is no "supervisor" relationship to maintain. Any licensee can countersign an appraisal for any other licensee so long as they're meeting the other requirements for that assignment. I can sign for Fernando and Fernando can sign for me, if the circumstances arise that would require an additional signature.

Thank you all for your comments. I'll be sure to post the state's response on this as well if I get one.