Can an AR licensee appraise a commercial property?

[tcaplus]

I have about a month's worth or work waiting for me from an attorney for an extensive family trust so it is not a federally related transaction (in case that makes a difference.) One of the many properties is a 5 unit apartment and the others are residential.
Can I legally appraise this commercial property if I meet the competency requirement but have an AR and not AG license?
(I have previously appraised the same property along with an AG, this is my primary area, and I have taken all the AG classes but only have about 500 hours of commercial experience if any of that makes a difference.)
I am looking for a reference to have in the file should I do this. (so far have not been able to find specific reference from OREA or TAF.) There used to be a distinction between federally related transaction and other, but this may have changed. thanks

 

[Scott R Marshall]

I think this may be a state by state issue. In my state here is the difference between what a certified vs a general certified can appraise:

Certified: 16.62.4.8 RESIDENTIAL CERTIFICATION: A holder of a residential certificate is eligible to prepare appraisals of all residential real estate for federally related transactions or other uses. He/she may appraise nonresidential real estate provided such appraisals are not described or referred to as meeting the requirements of FIRREA. The holder of a residential certificate may not assume or use any title, designation or abbreviation likely to create the impression of general certification.

A. The certified residential real estate appraiser classification qualifies the appraiser to appraise one to four residential units without regard to value or complexity. The classification includes the appraisal of vacant or unimproved land that is utilized for one to four family purposes or for which the highest and best use is for one to four family purposes. The classification does not include the appraisal of subdivisions for which a development analysis/appraisal is necessary.

B. All certified residential real estate appraisers must comply with the competency rule of the national uniform standards of professional appraisal practice (USPAP).


General certified: 16.62.5.8 GENERAL CERTIFICATE: A holder of a general certificate may prepare appraisals on all real estate and may indicate that such appraisals are state certified.

A. All certified general real estate appraisers must comply with the competency rule of the national uniform standards of professional practice (USPAP).

See what your state's rules and regs say.

 

[nstanbru]

"Any 1-4 family property without regard to transaction value or complexity; and non-residential property with a transaction value up to $250,000."

From the OREA website for scope of AR.

 

[tcaplus]

In the early years of licensing, any appraiser could appraise any property if not for a federally regulated transaction. If for a federally related transaction, such as nearly all refi or purchase transactions, value and property type limits are in place. It seems that the distiction between the federally related transaction and other may have been removed. That is what I am looking for. I know what the regs are for appraisals for traditional transactions. What about the rest?

 

[Lee Lansford]

In the early years of licensing, any appraiser could appraise any property if not for a federally regulated transaction. If for a federally related transaction, such as nearly all refi or purchase transactions, value and property type limits are in place. It seems that the distiction between the federally related transaction and other may have been removed. That is what I am looking for. I know what the regs are for appraisals for traditional transactions. What about the rest?

Post #3 may have answered your question.

 

[hastalavista]

In the early years of licensing, any appraiser could appraise any property if not for a federally regulated transaction. If for a federally related transaction, such as nearly all refi or purchase transactions, value and property type limits are in place. It seems that the distiction between the federally related transaction and other may have been removed. That is what I am looking for. I know what the regs are for appraisals for traditional transactions. What about the rest?

My understanding is, for assignments that are not required to conform with FIRREA or any specific client-requirement, an AR can appraise a commercial property if and only if the appraiser, without supervision, if and only if the appraiser meets the competency requirements.

This is a simple question with an answer that can be confirmed by OREA. Unfortunately, I think they are closed on Fridays!

If (and I think you should) confirm the answer, please post what you find out here.

Thanks! :new_smile-l:

 

[George Hatch]

The bigger question may be whether or not you have what it takes to come up with a reasonable workproduct for such an assignment.

If there's a problem later on nobody is going to cut you any slack based on the idea that you're a beginner. Your work will be judged against what a competent commercial appraiser would have done in such an assignment. It ain't rocket science but it also ain't a house.


FTR, I have yet to see a reasonable commercial appraisal report from a residential licensee who's never had any commercially competent supervision.

 

[Michigan CG]

Two weeks ago I reviewed a 5-unit apartment "appraisal". The CR thought she knew what she was doing. She had no clue what she was doing.

Proceed with caution.

 

[Smokey Bear]

(I have previously appraised the same property along with an AG, this is my primary area, and I have taken all the AG classes but only have about 500 hours of commercial experience if any of that makes a difference.)

Sounds to me he probably can do it. But what does a lowly CR know? LOL

 

[tcaplus]

FYI - I checked with national USPAP instructor, who thought it was ok but suggested I contact TAF which indicated it was a state issue as federal law does not apply in this case (not for a federally related transaction) and this was confirmed by superior court rulings in several states. My state (Calif) indicated that it IS ok for an AL or AR to appraise a commercial property for non-federally related purpose, providing the competency requirement is met. I would think other states would be the same BUT you would need to check your own state requirements. I was told by the director of the CA OREA that this was ok about 15 years ago but wasn't sure if regs had chenged. They remain the same in California.

Bottom line: OK for AR to appraise commercial property if competency met and not for a federally related transaction.