Just what can a Certified Residential Appraiser Appraise?

[Scott R Marshall]

Okay, here's the scenario. I've received an order to do an appraisal for a client I've done a lot of work for in the past. The e-mail message that came with the order as well as tax info and zoning info have the property designated as a church. Now before everybody mauls me over "Am I competent to appraise a church", I'm almost certain that I will turn down the assignment as I have never appraised or even attempted to appraise a church in the past but hypothetically, can a certified residential appraiser appraise a church? I've heard talk that you can as long as it's value is under $250,000 but for the life of me I've never been able to locate any definitive statements addressing this subject.

I always believed that a certified residential appraiser can only appraise single family up to 4 unit properties, complex or not, and anything more than that has to be done by a general certified. Before I call the client to give them the bad news is there any documentation out there that I can refer them to or is it just a matter of am I competent enough to appraise it? Thanks in advance.

 

[bishop]

scott, if you're not sure then contact your state appraisal board.

 

[Mr Rex]

First of all, the minutiae differs state to state. USPAP is less forgiving. A quick review of the Competency Rule, page 11, will help you form the proper response to the potential client.

 

[PropertyEconomics]

In NM Mr Rex .. USPAP is the law. If you dont have competence in completing the assignment you must disclose to the client and then state how you will become competent .. or get someone to sign the report with you that is competent.
Its pretty clear I think.

Furthermore .. I dont think that NM Law will allow a Cert Residential to appraise a commercial property like a church .. but thats something that the board should answer.

 

[hastalavista]

Scott-

Most appraisal assignments (if done by a state licensed/certified appraiser) demand a number of minimum qualifying requirements to be met before the appraiser can accept them; the licensing level being one of the most obvious.

When it comes to accepting or declining complex assignments, I find it sometimes easier to ask not what qualifies me to take it, but what would disqualify me from taking it. In the case of the church, all of the qualifying pieces (for me) are in-place at the certified residential level except for the most significant; competency. By approaching the assignment in terms of what disqualifies me, it eliminates the danger of me trying to push my square-peg into the round hole (no off-color jokes, please!).

"Disqualify" is somewhat of an absolute. I could theoretically get "qualified" by obtaining the necessary assistance (and disclosing it), but that is not always an option that's in the client's best interest.

You asked for written specifics: Unless there are additional client-engagement requirements, then the written specific to fall back on is the Competency Rule.

(I think I'd try to find a CG to recommend it to, and offer to work as an assistant on the job so I could get the experience and determine if I might be competent the next time to take it on myself- good luck!)

 

[Susan Klimaszewski]

From the New Mexico Real Estate Appraisers Board

16.62.4.8 RESIDENTIAL CERTIFICATION: A holder of a residential certificate is eligible to prepare appraisals of all residential real estate for federally related transactions or other uses. He/she may appraise nonresidential real estate provided such appraisals are not described or referred to as meeting the requirements of FIRREA. The holder of a residential certificate may not assume or use any title, designation or abbreviation likely to create the impression of general certification.

A. The certified residential real estate appraiser classification qualifies the appraiser to appraise one to four residential units without regard to value or complexity. The classification includes the appraisal of vacant or unimproved land that is utilized for one to four family purposes or for which the highest and best use is for one to four family purposes. The classification does not include the appraisal of subdivisions for which a development analysis/appraisal is necessary.

B. All certified residential real estate appraisers must comply with the competency rule of the national uniform standards of professional appraisal practice (USPAP).

 

[Mike Boyd]

To paraphrase Forest Gump, Competency is what competency does. I appraised a church many years ago prior to licensing. I have no doubt that if I did one now I would likely end up in jail. They are very difficult if you do it right.

 

[Terrel L. Shields]

He/she may appraise nonresidential real estate provided such appraisals are not described or referred to as meeting the requirements of FIRREA.

Our state allows you to appraise any property under $250,000 with any license, but it varies from state to state. Look up your state law. Likewise, if it is NOT for FRT's then you should probably state that.
As for competency, you can learn how to appraise a church with a simple book or talking with an experienced appraiser.
I don't find them terribly difficult in terms of 'doing it'. But they are very time consuming. The Cost Approach generally rules. Income Approach generally won't apply but you can get an idea of rents by a little research and you will find new churches which are renting a building or old church. Generally you would relate the income to the seating capacity or SF. In the end, you likely will find a few church sales and they will be all over the map. Some may sell to a retail store, or a day care or some other similar non-religious use, but in larger towns, growing congregations often sell the old building once the new one is finished. Zoning issues are a factor because some allow churches in Res zones and some don't.

 

[hcollin2]

H. J. Collins, IFA

The simple answer is this: It is a non-residential property which calls for an analysis and value finding, i.e., appraisal report that is something other than a residential appraisal, therefore you cannot accept the assignment.

Okay, here's the scenario. I've received an order to do an appraisal for a client I've done a lot of work for in the past. The e-mail message that came with the order as well as tax info and zoning info have the property designated as a church. Now before everybody mauls me over "Am I competent to appraise a church", I'm almost certain that I will turn down the assignment as I have never appraised or even attempted to appraise a church in the past but hypothetically, can a certified residential appraiser appraise a church? I've heard talk that you can as long as it's value is under $250,000 but for the life of me I've never been able to locate any definitive statements addressing this subject.

I always believed that a certified residential appraiser can only appraise single family up to 4 unit properties, complex or not, and anything more than that has to be done by a general certified. Before I call the client to give them the bad news is there any documentation out there that I can refer them to or is it just a matter of am I competent enough to appraise it? Thanks in advance.

 

[Midwest Guy]

Appraisal Foundation has changed opinions of what is proper for different licensing levels over the years. Different states have changed competency regulations for their states at different times to match guidelines at the current time.

My Certification in both MO & IL allows 1-4 family residential only.

Okay, here's the scenario. I've received an order to do an appraisal for a client I've done a lot of work for in the past. The e-mail message that came with the order as well as tax info and zoning info have the property designated as a church. Now before everybody mauls me over "Am I competent to appraise a church", I'm almost certain that I will turn down the assignment as I have never appraised or even attempted to appraise a church in the past but hypothetically, can a certified residential appraiser appraise a church? I've heard talk that you can as long as it's value is under $250,000 but for the life of me I've never been able to locate any definitive statements addressing this subject.

I always believed that a certified residential appraiser can only appraise single family up to 4 unit properties, complex or not, and anything more than that has to be done by a general certified. Before I call the client to give them the bad news is there any documentation out there that I can refer them to or is it just a matter of am I competent enough to appraise it? Thanks in advance.