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Important detail in interpretation.

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I occasionally flirt with the $1 miilion level with my lowly licensed status. Personally, I will decline assignments where I think I will get close, just to avoid the perception of a problem. For example a property could legitamently appraise for $975,000. The borrower could complain that it should be $1.1 million and I deliberately under appraised it to stay under my limit. I avoid these opportunities very strictly.

The closest I have come was a property that was contracted at $975,000. Even then I was nervous, as it could have easily appraised for more than $1 million.

Discretion is often the better part of valor.
 
When appraising for a lender, the transaction amount is the loan amount. The transaction is the money that changes hands.
 
The one thing anyone should consider with any assignment is that the workproduct will be judged against what the power users would normally expect and against what the appraisers who normally appraise those properties would normally do.

I have an unrestricted license that, in theory, allows me to appraise any property type in my state. Nevertheless, I pass on assignments that are over my head in terms of competency on a regular basis.

I have yet to see an unsupervised residential appraiser perform and report a non-residential appraisal in a manner consistent with what the commercial appraisers normally do. I'm sure it happens and I'm sure there are some residential appraisers who can do it, I've just never seen any examples of it yet.

FTR, your state board will probably not cut you any slack just because you "only" have a residential license. They will be looking for the same things in your report that they would in any other commercial appraiser's report, and it better be there.

Look before you leap.
 
Is the $$ limit for commercial work based on the total market value/sales price, or based on a percentage of the amount being borrowed?
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depends.
The FRT guidelines are based on TRANSACTION value, not property value.
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correct. But in Arkansas it is based upon the appraised value....$250,000 is the maximum that a CR can appraise a commercial property without a co-sign. That was not very clear to many people, including myself during the early years and I know appraisers to this day who did appraise over the limit on non-FRT work.
 
Lobo Fan said:
I occasionally flirt with the $1 miilion level with my lowly licensed status. Personally, I will decline assignments where I think I will get close, just to avoid the perception of a problem. For example a property could legitamently appraise for $975,000. The borrower could complain that it should be $1.1 million and I deliberately under appraised it to stay under my limit. I avoid these opportunities very strictly.

The closest I have come was a property that was contracted at $975,000. Even then I was nervous, as it could have easily appraised for more than $1 million.

Discretion is often the better part of valor.
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In Florida it is FRT amount and not the market value of the house, for the very reason you describe. If you make it about the market value, you have appraisers playing with value. Not a good thing. With FRT transaction amount the $ is fixed and you know it is under $1,000,000 when you accepted the assignment.

If you have a 5,000,000 sale and the the federally regulated bank is financing $975,000 and the $4,025,000 is coming from the buyer directly, the FRTA is less than $1,000,000 with the private transaction amount well above that. You as a licensed appraiser, at least in most states I am aware of, would not be disqualified from the report due to your level o license.

I don't know what it is in NM but I'd check if I were you. I can't imagine a state using a market value as a limit when that could obviously influence the appraiser.
 
I'm a CRA and made the decision to never cross over to the other side, except for 2/3/4 family apartments. I've never had training from a Cert Gen and I feel I would be dead meat if a commercial appraisal ever ended up in court or before the state.

Just a chicken I guess (or danged smart) I don't know which.
 
I took 90 tested hours of commercial appraisal courses and have a friend who is an MAI and a darn good commercial appraiser who reviews my commercial work, when I get it...I put his name in the report, with his permission obviously, as having contributed significantly and explain what he did.

If ever I do one where the FRT amount is over $250,000 he will go on the inspection with me.

In my area your appraisal experience is accepted without a supervisory signature if it complies with USPAP and if you are already licensed or certified residential. I believe real estate agents can do it too without a supervisor as long it complies with USPAP.
 
....please cite source for $250,000 commercial limitation for Cert Res in FRTs or others....thanks....rs
 
Appraisal Foundation website. Quickest place to find it is one of the brochures that they have on there about becoming an appraiser. It explains the guidelines of each licensing/certification type, so the limits are listed there.

As for the FRT, I've not seen it published anywhere. I have data from my State, but I had to specifically approach them with the question. If I had seen it published somewhere........there wouldn't have been the need for this thread. :new_smile-l:
 
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