Geographic competency

[Hudojni4ka]

In the FHA Handbook:

The Appraiser must be knowledgeable of the Uniform Standards of Professional Appraisal Practice (USPAP) and FHA appraisal requirements. The Appraiser must meet the competency requirements defined in the USPAP prior to accepting an assignment. The Appraiser must be knowledgeable in the market where the assignment is located.

 

[DWiley]

In the FHA Handbook:

The Appraiser must be knowledgeable of the Uniform Standards of Professional Appraisal Practice (USPAP) and FHA appraisal requirements. The Appraiser must meet the competency requirements defined in the USPAP prior to accepting an assignment. The Appraiser must be knowledgeable in the market where the assignment is located.

Yes. And the GSE docs, including the cert, say the same thing

I would dispute the claim that one cannot comply with the certs. When I worked at an AMC we dealt with this quite often. It can be done, and we worked with appraiser to help them do it, it just isn't easy or convenient. It is not the only example of it being inconvenient to sign a sworn statement that is actually true.

 

[Hudojni4ka]

Yes. And the GSE docs, including the cert, say the same thing

I would dispute the claim that one cannot comply with the certs. When I worked at an AMC we dealt with this quite often. It can be done, and we worked with appraiser to help them do it, it just isn't easy or convenient. It is not the only example of it being inconvenient to sign a sworn statement that is actually true.

I do get help from other appraisers. Would this suffice then?

When I used to work in AZ, all of my co-workers there (senior appraisers) stressed the importance of being competent prior to accepting an assignment for FHA/USDA deals, but never for conventional deals, and this is how it stuck in my head Although, I have read the Appraiser's Certification in the 1004 form.

Can you say how you helped appraisers when you worked at the AMC?

 

[DWiley]

I do get help from other appraisers. Would this suffice then?

When I used to work in AZ, all of my co-workers there (senior appraisers) stressed the importance of being competent prior to accepting an assignment for FHA/USDA deals, but never for conventional deals, and this is how it stuck in my head Although, I have read the Appraiser's Certification in the 1004 form.

Can you say how you helped appraisers when you worked at the AMC?

The question one must ask is this - can you truthfully sign Cert 11 or not? If one can, good. If not, then one must ask if he/she is OK with signing a false certification.

We helped appraisers who moved by helping them find non-lender related appraisal work that did not require use of the GSE forms. In one case, we helped the appraiser by finding another appraiser who agreed to hire the appraiser as a staff appraiser for six months.

 

[Hudojni4ka]

The question one must ask is this - can you truthfully sign Cert 11 or not? If one can, good. If not, then one must ask if he/she is OK with signing a false certification.

We helped appraisers who moved by helping them find non-lender related appraisal work that did not require use of the GSE forms. In one case, we helped the appraiser by finding another appraiser who agreed to hire the appraiser as a staff appraiser for six months.

The answer right now is yes, but as far as the beginning.... Can someone truthfully sign Cert 11 if they lived in an area for a few months before starting to work and in the mean time studied the market?

 

[DWiley]

The answer right now is yes, but as far as the beginning.... Can someone truthfully sign Cert 11 if they lived in an area for a few months before starting to work and in the mean time studied the market?

It is pretty simple. Cert 11 says that you have a appraised a similar home in the same area before. If one has done that, one can truthfully sign cert 11. If one has not appraised a similar home in the same area, then one cannot truthfully sign cert 11. Studying the market is not the same thing as completing an appraisal.

What cert 11 really means is that one must do some no-GSE/non-FHA work first. So, one could do private work (pre-listing, for example), or lender work that was for portfolio purposes, or any other such work.

 

[Hudojni4ka]

Thanks for explaining. Yes, it is pretty clear cut "Appraising this type of property in this market area"

 

[RCA]

They are only unprofitable because the appraisers allow it. I don't mind the oddball properties as long as the client accepts my quoted fee.

I'd have to argue that is not the whole story. Suppose you have a low-end property that you want appraised. Low-end and high-end properties are typically difficult because they are often impossible to bracket and the price curves are very steep. Your low-end property might require 3 times the effort, yet an expert appraisal would most likely just confirm how low-valued the property is, whereas a cheap appraisal would more likely overvalue it. Why pay 3 times more for a "better" appraisal when it just causes you more grief?

Moral of the story: Many parties that need an appraisal do not necessarily want the best possible, i.e. best-supported opinion of value. They are OK with a rubber stamp, as long as it passes muster with the authorities and doesn't rub them the wrong way.

Now is there some kind of need for accurate appraisals? Well, yes. When you get into the realm of mass appraisals, AVMs and automated decision making that results in billion dollar decisions, including predictions that are sensitive to inaccuracies.

Oh, and let's not forget those individual investors who may be investing a significant portion of their assets into a property - they are definitely interested in accurate appraisals.

 

[RCA]

Honestly, the best help I get is from real estate agents, especially when in unfamiliar territory. I find in some areas they are fantastically cooperative and good-natured. They will tell you about the real problems in selling different properties: water permits, insurance issues, zoning, actually fairly complex stuff that may be specific to a small town or community.

Appraisers are often encumbered with bad habits and opinions I don't agree with. Even the "best". Not that that is bad. We all have our opinions.

For example, homes which back up to a steep mountain-side and are situatted a couple of hundrerd yards from a major earthquake fault. Who would be crazy enough to buy one? Well, a lot of buyers pay top dollar for these damned homes. My job is to opine market value, not some kind of "real" value. So, that is what I do. Somebody comes along and asks me to appraise a similar property down the street --- look all I can do in my cold-blooded way of thinking is really disregard the issue - because the market says so. I don't agree in the sense that I would never pay that price for such a property, but my opinion in that regard really doesn't have much bearing. Market value is market value. Although, certainly, I can imagine another appraiser who wouldn't agree, and might venture to discount the value in that regard.

I really don't like unrestrained market value.