Newly licensed appraiser - $1M limit question

[shrubberyvaluation]

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?

Not to mention in some areas $1 million is not high end at all.

 

[shrubberyvaluation]

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/

View attachment 58969 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?

I'm not a big fan of the definition. I would define complex as limited good market data. But what do I know. You could have a type of property that is not uncommon but none have sold recently which would make it complex .in my opinion. There could be a desirable area with little turnover with no recent sales (so its still typical market conditions). These really don't fit any of that definition.

So with my definition

Is a log home complex? If there is limited market data, it would not be complex if you have a bunch of log homes around that sold recently.

Is an underground home complex? Same as above.

A rural property? If there is limited market data its complex.

Is a leasehold complex? If there is limited market data.

What about market conditions? If market conditions have changed that make the existing market data not relavant or not as good. I would say rapidly changing market conditions makes an assignment more complex.

 

[George Hatch]

atypical property, atypical market conditions.

Remember, we're talking about factors which can make the analyses more difficult. Situations which cause appraisers to come off autopilot.

 

[shrubberyvaluation]

atypical property, atypical market conditions.

Remember, we're talking about factors which can make the analyses more difficult. Situations which cause appraisers to come off autopilot.

What if the atypical market conditions involves more properties selling recently that are similar to the subject. Atypical market conditions does not always mean more complex.

 

[shrubberyvaluation]

atypical property, atypical market conditions.

Remember, we're talking about factors which can make the analyses more difficult. Situations which cause appraisers to come off autopilot.

And what makes it more difficult...a lack of good market data.

 

[George Hatch]

What if the atypical market conditions involves more properties selling recently that are similar to the subject. Atypical market conditions does not always mean more complex.

The definition says what it says.

The whole point of a limitation on the scope of practice is to anticipate what the typical licensee at that level can be reasonably expected to handle all or almost all of the time. There will be exceptional individuals who don't fit that "typical licensee" and there will be exceptional circumstances which don't fit the "atypical market conditions" and whatnot but the exception doesn't disprove the rule.

 

[Terrel L. Shields]

I would define complex as limited good market data.

That would fall under the heading of "market conditions" but how often would it apply? Not often. And it is situational. Sales are sparse in W. Oklahoma but that is not "atypical" in that market. Finding 3 similar sales in the previous year in many counties would be atypical.

the exception doesn't disprove the rule.

Too true. And to me the question is not whether you CAN do this job, but rather what is the RISK of doing it since the question of limits is at stake. While CA may be a non-mandatory state, I don't think that applies in all that many states. I know my state would almost certainly come down on them like a ton of bricks.

atypical property, atypical market conditions.

An atypical property, imnsho, is like a geodesic dome, or underground house, never seen one that was "typical" in the market. My cousin owned a hunting lodge in Colorado with 9 bedrooms and 4 bathrooms...typical? Nope, but there were some similarly large SFR up there in the mountains towards Telluride...so, atypical...sorta not.

So there are 50 shades of Gray that don't involve sex....regardless it may make you moan. Is functional obsolescence "atypical" or, is it a matter of how much FO is present. Ditto External Obsol. - that cell tower, power line, railroad, or the chicken farm next door. Is a remodel "atypical" or that garage conversion? On and on. We have a few homes that are created by well known architects - E. Fay Jones comes to mind, built an all concrete home with no square corners- all walls are rounded and there are no doors inside but you cannot see into the rooms. It was atypical even for Jones who was known for his organic rustic and woodland designs and especially for the church architecture exemplified by Thorncrown Chapel.

 

[andrew81]

I recently received my residential license in California. I know I have the following limitations:

"The Licensed Residential Appraiser may appraise non-complex 1-4 residential units having a transaction value less than $1,000,000 and complex 1-4 residential units having a transaction value less than $400,000."

However, can I independently appraise/sign a general purpose appraisal report that is for date of death tax purposes if the value exceeds $1M? It is unclear to me if this is considered a "transaction value". Any insight would be appreciated. Thank you.

conduct appraisals in federally related real estate loan transactions

for appraisals performed in federally-related transactions

California and the AQB (unless jurisdictional exception) does not prohibit a Licensed Residential Appraiser from performing an appraisal of all types of real property without regard to value or complexity, unless, for federally related transactions.


The answer is in the California Bureau of Real Estate Appraisers (Bureau) - Licensing Handbook and the Real Property Appraiser Qualification Criteria published by the AQB of the Appraisal Foundation.


Califonia Handbook, Summary of Each License Level, Residential (AL), Scope of Practice
https://brea.ca.gov/html/Lic_Hdbk.html


The California Handbook says:

Any non-complex 1-4 family property with a transaction value up to $1 million; and non-residential property with a transaction value up to $250,000.

The Licensing Unit ensures that applicants for appraisal licenses meet minimum requirements for education, experience, and examination that comply with federal mandates and ensure that only qualified persons are licensed to conduct appraisals in federally related real estate loan transactions.

appraisals in federally related real estate loan transactions

The AQB says:

The Licensed Residential Appraiser may appraise non-complex 1-4 residential units having a transaction value less than $1,000,000 and complex 1-4 residential units having a transaction value less than $400,000.

The AQB has statutory authority to develop mandatory Criteria for Supervisory Appraisers (not an appraiser credential classification) and the Trainee Appraiser, Licensed Residential, Certified Residential, and Certified General appraiser classifications. If a state has these classifications, they are required to adopt these Criteria, at a minimum, for appraisals performed in federally-related transactions.

for appraisals performed in federally-related transactions

1. Go to How to Become a Real Property Appraiser website of the Appraisal Foundation
https://www.appraisalfoundation.org/iMIS/TAF/Copy_of_Become_RP_Appraiser.aspx

2. Click the link in Step 1, Read the Real Property Appraiser Qualification Criteria.
https://www.appraisalfoundation.org...ualification_Criteria__RP_/TAF/AQB_RPAQC.aspx

3. Click the link in the first sentence, The Real Property Appraiser Qualification Criteria (Criteria)
https://appraisalfoundation.sharefile.com/share/view/s63f99dc2b9f241e0b3fd1645f7b63680

4. Go to page 5 and read:

The AQB has statutory authority to develop mandatory Criteria for Supervisory Appraisers (not an appraiser credential classification) and the Trainee Appraiser, Licensed Residential, Certified Residential, and Certified General appraiser classifications. If a state has these classifications, they are required to adopt these Criteria, at a minimum, for appraisals performed in federally-related transactions.

for appraisals performed in federally-related transactions.

5. Understand "transaction value" is interpreted by the AQB as "appraisals performed in federally-related transactions"

.

 

[glenn walker]

Whats cra

California and the AQB (unless jurisdictional exception) does not prohibit a Licensed Residential Appraiser from performing an appraisal of all types of real property without regard to value or complexity, unless, for federally related transactions.


The answer is in the California Bureau of Real Estate Appraisers (Bureau) - Licensing Handbook and the Real Property Appraiser Qualification Criteria published by the AQB of the Appraisal Foundation.


Califonia Handbook, Summary of Each License Level, Residential (AL), Scope of Practice
https://brea.ca.gov/html/Lic_Hdbk.html


The California Handbook says:







The AQB says:






1. Go to How to Become a Real Property Appraiser website of the Appraisal Foundation
https://www.appraisalfoundation.org/iMIS/TAF/Copy_of_Become_RP_Appraiser.aspx

2. Click the link in Step 1, Read the Real Property Appraiser Qualification Criteria.
https://www.appraisalfoundation.org...ualification_Criteria__RP_/TAF/AQB_RPAQC.aspx

3. Click the link in the first sentence, The Real Property Appraiser Qualification Criteria (Criteria)
https://appraisalfoundation.sharefile.com/share/view/s63f99dc2b9f241e0b3fd1645f7b63680

4. Go to page 5 and read:





5. Understand "transaction value" is interpreted by the AQB as "appraisals performed in federally-related transactions"

.

Whats crazy is California has not raised its limits since 1989 when Million Hollar homes were not the normal. Today in Many areas million dollar homes are 1,200.00 Sq.Ft. Bungalows. In the Bay area entire Cities are million dollar plus homes and as far as the Non- Residential at $250,000 there is really no such thing anymore. The poor licensed appraiser in CALI is really screwed and there never shoudl have been two license levels for residential .

 

[J Grant]

some million $ range appraisals are easier than a 200k starter home. It really depends on the comps and data and is the subject typical/non conforming or not.