Geographic competency

[Hudojni4ka]

Hello,
I am a certified residential real estate appraiser that will be moving from Phoenix, AZ to Portland, OR within a month. My husband's job has transferred there already and I need to find a job there or work on my own. My question is to appraisers who have moved to another state, where they need to acquire geographic competency in order to produce good quality appraisals. Did you start working for a company first or did you use other methods to acquire geographic competency? I have 5 years of experience in Arizona and was working in a high paced environment. I know things might be different in different states and I might need to see what is usually more valuable or less valuable in another state... Any advice would be greatly appreciated
Thank you in advance.

 

[Terrel L. Shields]

Might be good to work with someone for a short time, but you probably just need to determine what your peers do and what sources they rely upon. Join the MLS, run some typical property analysis with the MLS market tools and judge what you think the market is doing. Join a local appraiser group.

 

[Hudojni4ka]

Might be good to work with someone for a short time, but you probably just need to determine what your peers do and what sources they rely upon. Join the MLS, run some typical property analysis with the MLS market tools and judge what you think the market is doing. Join a local appraiser group.

Thank you, I know a realtor there, and she is very knowledgeable about neighborhoods, but wonder if gaining knowledge through her and MLS would be sufficient to start working on my own. I appreciate your input.

 

[George Hatch]

I would suggest doing a deep dive into the long term trends on every assignment you get into. Like, going back 5 and 10 years and looking at *everything* occurring in your subject's immediate neighborhood and in your subject's market segment. Which listings did sell and which didn't sell.

As an appraiser....
Regardless of where you're starting from in any given assignment, if by the end of your assignment you're not familiar with *more* data than even the local brokers know about then you're doing it wrong. It's not difficult to do, just a little time consuming.

Oh yeah, and don't forget to explain that process in your report. You want your reader to understand the lengths you went to in order to develop the supportable conclusions in your report. You don't ever want a reader to labor under the misunderstanding that your analysis of the market was limited to the 3 or 5 sales you're showing in your Sales Comparison. You want them to understand those direct comps only represent the tip of the iceberg of data you researched. That makes it a lot tougher for them to think that you somehow "missed" some relevant sales data which will change your opinion.

You always want to crush their hopes and dreams of a different outcome, or to allege that you weren't familiar with the market.

 

[Terrel L. Shields]

Why not? If you are competent to value property where you were, then the nuances of the mechanics of valuation are behind you. Your competence can then concentrate upon learning the local market.

 

[Hudojni4ka]

I would suggest doing a deep dive into the long term trends on every assignment you get into. Like, going back 5 and 10 years and looking at *everything* occurring in your subject's immediate neighborhood and in your subject's market segment. Which listings did sell and which didn't sell.

As an appraiser....
Regardless of where you're starting from in any given assignment, if by the end of your assignment you're not familiar with *more* data than even the local brokers know about then you're doing it wrong. It's not difficult to do, just a little time consuming.

Thank you, this is also a great idea, something I did not have to do in AZ but very sensible to do in another state.

 

[George Hatch]

I work in market segments in which I have no local exposure all the time so I'm doing these sorts of analyses in most of my appraisal assignments, except when I do have recent exposure. Here's an example of a summary I include in every SFR assignment I do:

 

[CANative]

Regardless of where you're starting from in any given assignment, if by the end of your assignment you're not familiar with *more* data than even the local brokers know about then you're doing it wrong. It's not difficult to do, just a little time consuming.

Oh yeah, and don't forget to explain that process in your report. You want your reader to understand the lengths you went to in order to develop the supportable conclusions in your report.

2019 Selling Guide, Page 535:

Knowledge and Experience

Lenders must use appraisers that

• have the requisite knowledge required to perform a professional quality appraisal for the specific geographic location
and particular property type; and

• have the requisite knowledge about, and access to, the necessary and appropriate data sources for the area in which
the appraisal assignment is located.

Appraisers that are not familiar with specific real estate markets may not have adequate information available to perform a
reliable appraisal. Although the Uniform Standards of Professional Appraisal Practice (USPAP) allows an appraiser that does
not have the appropriate knowledge and experience to accept an appraisal assignment by providing procedures with which
the appraiser can complete the assignment, Fannie Mae does not allow the USPAP flexibility.

 

[Mr Rex]

Ask to sit in on RE offices weekly sales meetings (offer to bring donuts and/or Starbucks) and ask questions. Study the MLS trends like you are about to be tested. Read the local newspapers online fervently.

 

[George Hatch]

So the question becomes, does the

requisite knowledge required to perform a professional quality appraisal for the specific geographic location​

and particular property type​

mean that the appraiser is required to already be familiar with the subject attributes and every sale they're citing in their report prior to accepting the assignment? Or does it mean the appraiser is required to have the means and ability to identify and analyze all that data in order to produce the competent report?

Do I have to have the clairvoyance to know what appliances the subject has in their kitchen prior to accepting the assignment, or is it okay if I simply possess the skills to perform the research and analysis to come to that understanding by the time I finish my assignment?

Asking for a friend. As usual, Fannie has engaged in fuzzy terminology when they use the term "knowledge" instead of "competency".