Geo Competence Part 2

[George Hatch]

If you're looking for the effects of one or two specific variables then the main way you'd do that is make the assumptions for other elements more/less consistent. Not mix/match on an unequal basis.

If you're asking about geography and assuming MLS access for some but not all you're not going to be able to isolate the effects of geography from the effects of MLS access.

If you want to measure the effects of MLS access then you should structure your question that way, and leave most of the other assumptions the same for each category.

 

[George Hatch]

Now, to answer your actual poll question:
(my bold)
If I am not given the opportunity to gather the data necessary for any market, given the SOW requirement, then I'm not going to do the assignment.

But that's the answer every appraiser should give so I don't understand the reason for the poll? Unless you think it may expose some lack of USPAP knowledge?

I think her question is about what people can/will do during what she considers to be the normal course of business, not about the concepts involved in a competency discussion as such. I'm actually a little disappointed that she didn't include mention of a specific fee as a means of further illustrating her point.

 

[J Grant]

I think her question is about what people can/will do during what she considers to be the normal course of business, not about the concepts involved in a competency discussion as such. I'm actually a little disappointed that she didn't include mention of a specific fee as a means of further illustrating her point.

Thanks for everyone's replies, I meant the poll to measure what people think they can competently when appraising out of an area they are not geographically familiar with, - considering the reality of what I know ( and many have experienced ) with tight turn times the norm and the possibility of MLS- that might range from none to limited to good access- I just know that for independent fee appraisers, as it stands now, most do not have access to MLS outside of whatever areas they practice in.

As to fee- I have no idea of what the fee is but if it is for desktop portion of a SFR ordinary appraisal I would not anticipate a very high fee as the assumption.

 

[J Grant]

There is currently no issue with out of area review work that I am aware of. As has been pointed out, most QC is just that - QC, not STD 3 reviews. So, it is a non-issue for most with regard to review work.

I have stated my primary reason for interest in the topic - fear of unintended consequences for "traditional" work. I see a train wreck coming, and I would like for it be avoided.

What is the train wreck you see coming of unintended consequences for traditional work?

 

[Terrel L. Shields]

Donno about DW, but the train wreck I see is lenders (that rather nebulous embodiment of the trusting public?) will assume all appraisals - origination or not- can be done cheaper by all appraisers regardless where that appraiser lives & they can cut costs by using out of area desktop appraisals. They assume all appraisals are equally reliable whether a full inspection or a desktop, hybrid, or drive by. By driving the deminimus to $500,000 perhaps 90% of properties in many states and areas would qualify for evaluations...but lenders think a hybrid APPRAISAL is much cheaper than a non-appraiser EVALUATION.

 

[DWiley]

What is the train wreck you see coming of unintended consequences for traditional work?

I have already outlined that multiple times. See prior posts.

 

[George Hatch]

Donno about DW, but the train wreck I see is lenders (that rather nebulous embodiment of the trusting public?) will assume all appraisals - origination or not- can be done cheaper by all appraisers regardless where that appraiser lives & they can cut costs by using out of area desktop appraisals. They assume all appraisals are equally reliable whether a full inspection or a desktop, hybrid, or drive by. By driving the deminimus to $500,000 perhaps 90% of properties in many states and areas would qualify for evaluations...but lenders think a hybrid APPRAISAL is much cheaper than a non-appraiser EVALUATION.

The various lenders already have had ample exposure to alternative valuation products, and they already have opinions about when to use them and when to go to a traditional appraisal. There's no reason to assume their experience with these "lesser" appraisal products will proceed any differently.

One thing appraisers do that many of the competing valuation products don't do is that we disclose what we didn/didn't do in that assignment. The main reason someone would equate a BPO or an Eval from a non-appraiser with an appraisal from an appraiser is because of the lack of disclosure by the former leads to an unfounded assumption by the reader that they're the same thing - even when the SOW is so very different.

 

[hastalavista]

One thing appraisers do that many of the competing valuation products don't do is that we disclose what we didn/didn't do in that assignment. The main reason someone would equate a BPO or an Eval from a non-appraiser with an appraisal from an appraiser is because of the lack of disclosure by the former leads to an unfounded assumption by the reader that they're the same thing - even when the SOW is so very different.

Evaluations, what they are and how they are used, are defined in the IAEG. Non-lenders can get them (I suppose) but if they get them from an appraiser, it becomes an appraisal.
I cannot speak for all users, but the institutions I work directly with fully understand when to use them and how they should be used. For them, if it is a close call, then the tie goes to the runner (where the runner is an appraisal). The last thing they want in an audit is to be told, "You should have gotten an appraisal!".

 

[George Hatch]

I've performed lots of appraisals for eval purposes over the years. In my experience the lenders don't mind at all paying an appraiser a little more for a given SOW than they'd pay a non-appraiser.

 

[Terrel L. Shields]

Non-lenders can get them (I suppose) but if they get them from an appraiser, it becomes an appraisal.

Non-lenders? Secondary market isn't universal. About 50% of bank lending is in-house or private non-FHA, VA, or Fan/Fred. Some banks have no loans thru secondary market. They are internally funded. Tyson, Walton, etc. are putting their own money to work, not the secondary market.

In my experience the lenders don't mind at all paying an appraiser a little more for a given SOW than they'd pay a non-appraiser.

You need to get further from home George... you know, places where a 1800 sf house doesn't cost $1,000,000. Explain the demand for raising the de minimums to $500,000 then. In Wally World hdq. (Bentonville, AR) that's most commercial and residential property. 26 properties sold for over $500,000 (last six mo.) in a place with over 600 sales and the bulk of sales were between $250-500,000. Never mind Hel's, personal loans backed by RE, etc. The evals are running hot and fast as is. Ten years ago appraisers did almost all below de minimums work. A couple in house appraisers who also reviewed, a couple of small banks had a non-licensed evaluator.

So again, if all this is strictly a secondary market issue why would banks want to raise the de minimums? Whose skin is in the game?