Geographic competency

[Hudojni4ka]

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.

I am definitely trying to find a job in a company first... If I cannot find one though, I have to figure out how to gain the knowledge to be geographic competent. Thank you for sharing this.

 

[Hudojni4ka]

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.

Thank you for the advice. I am happy I posted this question, so many good ideas.

 

[Hudojni4ka]

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:

View attachment 44369

I appreciate you sharing your way of working. Very valuable!

 

[George Hatch]

It's kind of ironic that the example I posted consists of a subdivision home, which I almost never appraise.

 

[Michigan CG]

I am definitely trying to find a job in a company first...

Use the Appraisal Institute site to find appraisers that might need some help.

 

[gregb]

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

What does Mr. Wiley say?

 

[Hudojni4ka]

Use the Appraisal Institute site to find appraisers that might need some help.

Thank you for this idea, I will start contacting appraisers through this site.

 

[Tim The Enchanter]

You always want to crush their hopes and dreams of a different outcome

Love it.

 

[chad hampton]

Geo-competency comes from living in the area. I would suggest driving around your market area every day for a month. Learn the roads, businesses, schools, shopping, transportation, etc.

It shouldn't take long.

 

[KHS445]

To me the biggest challenge will be to understand the boundaries of different neighborhoods and the commuting patterns to schools, shopping selection, work locations, etc. To an outsider houses on one street may look the same as houses on another street a couple of blocks away, but in the local market there may be something that places a greater value on one property vs. another. In my coverage area there is a 10%+ difference in residential market value and at times even a greater difference in commercial value as soon as I cross into an adjoining County. Not sure why, but that has been the case for 30 years.

You are coming from a large metro area and moving to another. My suggestion would be to do some research to see if there is a particular area or segment of the market that is being underserved. Ask your real estate friend and others. Then concentrate on that area or segment, while you are learning about the greater market area. Kind of like a mouse eating an elephant, one bite at a time. You could also ask your friend if you could prepare market analysis/appraisals for any of their clients or even help with a couple of pre-listing valuations. You might not be able to charge for them, but at least you will gain some experience and knowledge from local experts.

You have thousands of hours of invested in your training/experience to date, so investing another couple of hundred hours to gain local knowledge is not that unreasonable. Good Luck.