Competency Rule

[Fred]

Limited in scope or not, the competency rule applies to reviews when USPAP applies.

If the reviewer is an appraiser, the Competency Rule applies in all cases, and in connection to all standards, including Standard 3.

True, but not the imaginary portions of Std 3 or the imaginary portions of the competency rule.

Being familiar with the local market area permits the reviewer to make educated judgements about the ranking in importance of value-influencing factors affecting the subject property rather than drawing conclusions from an underwriting checklist

Probably, but the original poster did not include any statements showing that review ranked the importance of value influencing factors or drew any conclusions.

There is nowhere in the certifications they both signed a statement that they are geographically competent to undertake a review of a complex Oregon residential property

Did they review the property or did they review an appraisal report?

This from the guy who would sometimes appraise by selecting only one comp or simply rank them. Will you explain in your report why you chose not use every other possible comp?

I report all the sales in the market segment, but I don't necessarily give all of them weight. By the way, I also use OLS regression and sometimes apaptive regression splines.

Edd, that you had to resort so quicly to the personal attacks is good confirmation of a bankrupt argument. You have never seen any of my reports, you are not "geographically competent" to say what is in them. But your contribution to the thread is noteworthy, because you just showed how a reviewer drawing ham-handed inferences on insufficient data goes wrong. In fact, your comments are the only evidence posted in the thread that clearly show bad reviewing.

If the reviewer can't appraise any particualr subject due to [geographic] incompetency then he can't review there either.

You are entitled to your provincial opinion, but in terms of USPAP, that is just plain wrong. Reviewing someone's work has nothing to do developing your own value opinion.

 

[airphoto]

Then, of course, you receive the demand from the lender that you include the following sales that they've developed .. which includes a comparable that you've already included in the report (I agreed, and added it a second time as comparable #7 .. ticked 'em off .. then they got to stip me for having a comparable repeated a second time .. A-Holes!)

Next included a two-year old sale on their list, a two -family (report was an SFR) plus a couple more that were twice the GLA ..

Jerks!

 

[Tawfik Ahdab]

Steven,

You must really enjoy polemics.

I suppose Mike and I are making up these passages of the Competency Rule:


"Comment: Competency applies to factors such as, but not limited to, an appraiser’s familiarity with a specific type of property, a market, a geographic area, or an analytical method. If such a factor is necessary for an appraiser to develop credible assignment results, the appraiser is responsible for having the competency to address that factor or for following the steps outlined above to satisfy this COMPETENCY RULE."


"In an assignment where geographic competency is necessary, an appraiser preparing an appraisal in an unfamiliar location must spend sufficient time to understand the nuances of the local market and the supply and demand factors relating to the specific property type and the location involved. Such understanding will not be imparted solely from a consideration of specific data such as demographics, costs, sales, and rentals. The necessary understanding of local market conditions provides the bridge between a sale and a comparable sale or a rental and a comparable rental. If an appraiser is not in a position to spend the necessary amount of time in a market area to obtain this understanding, affiliation with a qualified local appraiser may be the appropriate response to ensure development of credible assignment results."

I'll let my State Board do all the answering when they process the complaint and let you know the results.

I'll leave you to your disputations by getting back to work.

 

[xm72mhd]

I report all the sales in the market segment, but I don't necessarily give all of them weight. By the way, I also use OLS regression and sometimes apaptive regression splines.

That sounds interesting. I'm not sure it would work with this reviewer unless you gave some explanation as to why three specific comps were not included in the report, but it does sound interesting and I wold like to learn it.

Edd, that you had to resort so quicly to the personal attacks is good confirmation of a bankrupt argument. You have never seen any of my reports, you are not "geographically competent" to say what is in them. But your contribution to the thread is noteworthy, because you just showed how a reviewer drawing ham-handed inferences on insufficient data goes wrong. In fact, your comments are the only evidence posted in the thread that clearly show bad reviewing.

Well, sorry you took it that way. No attack launched, and to whatever extent your comments are defensive, it was unnecessary.

You are entitled to your provincial opinion, but in terms of USPAP, that is just plain wrong. Reviewing someone's work has nothing to do developing your own value opinion.

The emboldened is my point, is the issue in all of what I said and the reason I take a firm stand on this issue. Unfortunately it is done routinely and as far as I can tell is the issue for the thread starter. The reviewer's inquiry into why specific comps are not included crosses the line and launches the reviewer into value questions.

Incdentally, the realquest comps I mentioned showed up in a review done for some unkown reason on one of our residential appraisers.

It has become spaghetti review.

 

[Lee Lansford]

Where is the part of USPAP that says one appraiser cannot ask another why “three more recent and proximate sales” were not used?


[
MIke didn’t quote the part that says one is supposed to disclose the scope of work. Perhaps the most significant part of the work is the determination of which nearby sales get weight and which ones don’t.

If you are expecting to be reviewed, then why not identify the “three more recent and more proximate sales” and say they are fixer uppers and non-conforming. In the original post, it sounds like he left the kind of red flag that someone doing a limited scope review is almost sure to see flapping.

I am in complete agreement.

I saw nothing in the original post other than a request from the reviewer as to why certain properties were not included in the appraisal. Following, I do not see USPAP violation "this" or "that".

 

[xm72mhd]

I am in complete agreement.

I saw nothing in the original post other than a request from the reviewer as to why certain properties were not included in the appraisal. Following, I do not see USPAP violation "this" or "that".

Apparently this long distance "desk top" stuff" must be a well entrenched review practice. Just the thing I like to bite into.

Maybe I'm reading too much into the significance of Desk Top Review (whatever that is) by a reviewer in GA of appraisal in WA and scrutiny of specific comps. I guess the reviewer could have familiarity with competency in the market being reviewed, but I am skeptical.

I don't have competency in Kansas and its right next door.

 

[Peteopia]

Thanks for all the responses. The review supplied three additional sales with which they concluded that the market value of the property should have been reported $40k lower then my value. The sales that they reported were riddled with error due to the fact that they were obviously using inaccurate data. Like in the Tawfik's case the reviewer in GA did not have access to the local MLS and other data sources used in the normal course of business in my market which would have proven these sales irrelevant nor did they understand the limitations of the county records with which they found the sales. My point is that a local "peer" should be reviewing my work not some appraiser located over 4,000 miles away that us incompetent to appraise in my market.

Tawfik, it sound like we had the same type of review.

 

[Tawfik Ahdab]

"Tawfik, it sound like we had the same type of review"

Indeed, and maybe you'll have the same type of response I'm making by filing a complaint with your Washington state board. As Edd stated twice, this nonsense has to end. It's bad enough we have bad appraisals prepared by incompetents out there. It's even worse when the review function and process is diminished by persons who don't know what they're talking about, and worst of all when that incompetence has an impact on the appraiser under review.

 

[Fred]

I'll let my State Board do all the answering when they process the complaint and let you know the results.

You don't have to. Officials in Oregon have no authority over citizens in other states. However, they have authority over you.

The review supplied three additional sales with which they concluded that the market value of the property should have been reported $40k lower then my value.

I guess this is part of where the confusion comes in. Using sales to develop an opinion of value is not a "review." It's an appraisal.

 

[Fred]

The reviewer's inquiry into why specific comps are not included crosses the line and launches the reviewer into value questions.

Not necessarily. Edd, the last time this came up, I put up a link to one of the many appraisals that the auction companies post on line. Maybe it's a dumb hobby, but I store these reports on CD's. I don't know if you recall, but the one I linked for you had obvious errors and I asked who could spot them. Just at a glance, I noticed some adjustments had the wrong sign, but more importantly, an assembled commercial site in which two of the parcels were on the interior, residential side of the block no rezoned. Both of those observations go to comparable sales and the treatment of them. I never said a thing about the value, but clearly the appraisal as it stands has some problems. What difference does it make if that subject property is right in front of my window or on the other side of the world?

Another point, if you choose to go after someone's competency, don't throw stones from a glass house.