Geographic competency

[McCarthy]

In 2013 I moved from Long Island, NY where for 16 years I did primarily suburban appraisals along with urban NYC appraisals. I also appraised the East End (The Hamptons to Montauk) which to me was rural. I had lived on LI my whole life and was very comfortable covering these areas. I moved upstate near the Adirondack Mountains (5-6 hours away). Very different world up here. Mix of suburban (hard to wrap my brain around comps that are 5 miles away. I describe it as rural/suburban) to very rural farming communities along the Vermont border and then North into the mountains with rural secondary/vacation areas. I did not know any of these areas at all. I moved here without knowing anything other than it looked like a good place to live. I started doing insurance inspections. It was frustrating work that paid very little considering the time and ground I was covering. My time in the car doing the insurance inspections took me all over this region. I could have started appraising sooner but was very afraid that geographical competency might get me in trouble. Took me awhile but within 9 months I felt comfortable enough to start appraising with some of the more populated areas in this large geographical locale. I started off slow and eventually added different areas. It took me 2 years before I would even attempt to do a lakefront property. These complex properties all have different markets and nuances. Very different than the waterfront I covered on Long Island which included direct oceanfront, soundfront, bayfront and canals. I asked a lot of questions of the brokers who met me on site. I would frame these questions in a way that I let them describe their market and how different features add to value. What I found was they were used to appraisers being sent up from Albany (1-2 hour drive) to appraise these homes and they welcomed my questions as so many of the Albany appraisers did not really know these areas and never asked questions. The broker who rented me my townhome became my go to person. She was great and helped me whenever I had a question. You need to choose what is best for you. Although I hated the insurance inspections and the company that ordered them it was invaluable to see firsthand what a lot of these towns looked like. Get your MLS up and running. Pull comps for the easier areas as if you were doing an appraisal and see where you feel comfortable and where you might need more time. Most populated areas are the same and starting there should be fairly easy. Ask about school districts. Go online and pull data for districts. Very important I think everywhere. Use Wikipedia. Sounds silly but I was able to use info found in the site for different areas. Start simple. Time will bring you the experience you need to move to different areas.

 

[McCarthy]

I am doing the Long Island east end market now and since 2007 Looking to relocate down south in a few years Traffic and the grind getting to be too much.

 

[Hudojni4ka]

Hudojni4ka

Remember we have nice fees here. I haven't done a sub $775 appraisal in years. Please don't low ball our appraisal market.

I was told by another appraiser here typical fees are $600-700. Is this wrong then? I will start quoting more. I have been doing $650-700 but if this is low, I will raise it.

 

[RCA]

For some areas, obtaining geographical competency if very easy, especially if you have access to good data and a good regression program like MARS. For other areas, even with these tools, it can of course be more difficult. And for some areas, the only way is to know a really good appraiser who has worked in the area for many years and is the sole source of vital information. And there are some areas, where you more or less flip a coin ... because there are almost no discernable buying patterns; for example a coastal town full of secondary vacation homes of minimal quality with an extremely slow turnover rate that occurs over many years.

The advantage goes to the appraiser who has access to good data and knows, really knows statistics. He can probably uncover adjustment patterns that long time appraisers aren't aware of. If he is also adept at calling local real estate agents to get information (which he must verify), that will also surely help. But beware, some areas have far different characteristics than others, even when they are geographically close.

 

[DWiley]

If you plan to do any GSE work in a new area, be aware that when one signs a GSE report one is certifying that, among other things:

11. I have knowledge and experience in appraising the type of property in this market area.

So, basically, one cannot (truthfully) do GSE work in an area until one has prior experience with similar properties in that area.

While USPAP would allow one to gain the competency during the assignment (assuming one followed the prescribed protocols in the COMPETENCY RULE), that flexibility does not exist for GSE work.

 

[Terrel L. Shields]

11. I have knowledge and experience in appraising the type of property in this market area.

Did that ever stop anyone before?

 

[DWiley]

I never moved my practice to a different state. However, I have moved to different markets within the same state.... several times. There are many ways to develop geographic compentence. Associate with a appraiser or appraisal firm in the area. Spend a lot more time than you would like researching and completing assignments. Spend a lot of time studying and learning about your new market.

You are correct in noting that there are many ways to gain geographic competency. However, I only know of one way to be able to truthfully attest to Cert #11.

 

[glenn walker]

I once had a Arrogant USPAP instructor, who a student asked about geographic competence. The instructor stated he could be dropped off anywhere in America and within 48 hours be competent. I then laughed and he was not very happy. After words at break time he confronted me and I told him that even in a cookie cutter area it can often take months not days. It Didn't matter his theory was 48 hours anywhere. I sure hope he has retired

 

[Hudojni4ka]

If you plan to do any GSE work in a new area, be aware that when one signs a GSE report one is certifying that, among other things:

11. I have knowledge and experience in appraising the type of property in this market area.

So, basically, one cannot (truthfully) do GSE work in an area until one has prior experience with similar properties in that area.

While USPAP would allow one to gain the competency during the assignment (assuming one followed the prescribed protocols in the COMPETENCY RULE), that flexibility does not exist for GSE work.

Yes, I am aware, thank you. Thankfully, I got conventional loan appraisal orders initially. Hardly have had any FHAs here, which is surprising given the higher than average typical home cost. By the time I had an FHA loan I had some experience in the area I also found two wonderful appraisers who were willing to provide guidance and mentorship when needed, one of which is a senior appraiser and was previously on the Board, and has lived here her entire life. Also, I have one realtor that I consult with occasionally, also here since birth and sold 18 homes in the first half of 2020 so plenty of experience with buyers.

 

[DWiley]

Yes, I am aware, thank you. Thankfully, I got conventional loan appraisal orders initially. Hardly have had any FHAs here...

???? GSE work is Fannie/Freddie work, not FHA. Most (though certainly not all) "conventional" work is GSE work.

To Terrel's prior post, it is common to see appraisers basically just ignore cert 11. Not saying you did that, just saying it is quite common when appraisers relocate.