Limits of certified residential

[mp2277]

I'm in VA. What are the commercial limits of certified residential licensure? I have been asked to appraiser a non complex office building, real estate only they client is not interested in cash flow or income, simply the real estate. One partner is retiring and selling to the other, no lender involved, private transaction. Thanks FYI I've looked and just can't find it anywhere. An answer or a link will be helpful

 

[BRCJR]

https://www.dpor.virginia.gov/sites/default/files/Boards/Appraisers/40REGS.pdf

You should read this from front to back....

"Certified residential real estate appraiser" means an individual who meets the requirements for licensure for the appraisal of or the review appraisal of any residential real estate or real property of one to four residential units regardless of transaction value or complexity. Certified residential real estate appraisers may also appraise or provide a review appraisal of nonresidential properties with a transaction value or market value as defined by the Uniform Standards of Professional Appraisal Practice up to $250,000, whichever is the lesser.


You could also elect to do an Evaluation if the client thinks it would be appropriate in this case.
Just follow the guidelines in the IAEG for Evaluations and you should be fine.

 

[Ricky LaFleur]

Certified residential real estate appraisers may also appraise or provide a review appraisal of nonresidential properties with a transaction value or market value as defined by the Uniform Standards of Professional Appraisal Practice up to $250,000, whichever is the lesser.

I always thought it was interesting that they included a dollar amount to the restrictions. The dollar amount doesn't speak at all to the complexity or competency required, just the risk level

 

[mp2277]

I always thought it was interesting that they included a dollar amount to the restrictions. The dollar amount doesn't speak at all to the complexity or competency required, just the risk level

I agree since we are prohibited from accepting an assignment using value as the criteria.

https://www.dpor.virginia.gov/sites/default/files/Boards/Appraisers/40REGS.pdf

You should read this from front to back....

"Certified residential real estate appraiser" means an individual who meets the requirements for licensure for the appraisal of or the review appraisal of any residential real estate or real property of one to four residential units regardless of transaction value or complexity. Certified residential real estate appraisers may also appraise or provide a review appraisal of nonresidential properties with a transaction value or market value as defined by the Uniform Standards of Professional Appraisal Practice up to $250,000, whichever is the lesser.


You could also elect to do an Evaluation if the client thinks it would be appropriate in this case.
Just follow the guidelines in the IAEG for Evaluations and you should be fine.

I considered the implications of an evaluation before I posted this however (perhaps I'm missing something) it seems if an appraiser preforms and evaluation then it becomes an appraisal. Any insight you have to offer will be greatly appreciated, Thanks in advance!

 

[BRCJR]

I agree since we are prohibited from accepting an assignment using value as the criteria.

I considered the implications of an evaluation before I posted this however (perhaps I'm missing something) it seems if an appraiser preforms and evaluation then it becomes an appraisal. Any insight you have to offer will be greatly appreciated, Thanks in advance!

State law allows an Appraiser to do Evaluations. The product cannot be called an appraisal nor be used in lieu of an appraisal.

https://law.lis.virginia.gov/vacode/title54.1/chapter20.1/section54.1-2017.1/

 

[DWiley]

State law allows an Appraiser to do Evaluations. The product cannot be called an appraisal nor be used in lieu of an appraisal.

https://law.lis.virginia.gov/vacode/title54.1/chapter20.1/section54.1-2017.1/

As I understand our law, in my state an evaluation may only be engaged by and performed for a regulated lender; an individual may not order an evaluation.

 

[BRCJR]

As I understand our law, in my state an evaluation may only be engaged by and performed for a regulated lender; an individual may not order an evaluation.

Anyone can do an Evaluation (Appraiser or non-Appraiser) in Virginia from what I understand. Evaluations are not regulated by DPOR.

If an Evaluation is done for a regulated lender, then the Interagency Appraisal and Evaluation Guidelines must be followed.

If anyone knows different, please speak up....I do not want to give bad advice to the OP.

 

[George Hatch]

Allow me to state up front that all RE is local. With that said, in this region I've seen a number of appraisals on non-res properties which were completed by CR licensed appraisers and I can count on one hand that's missing a couple fingers the number of appraisals where the appraiser did everything a CG appraiser does who normally performs such assignments. The ones I have seen where the appraiser did well involved CRs who had worked in a CG shop at some point. Somebody spent the time to show them how to do it, which that's great.

Apart from prior exposure and speaking personally, I've never seen a CR who has gone commando WRT prior commercial exposure return a report which would square up with an appraisal performed by CGs who normally do such work. For that matter, I've seen CGs who only do SFR assignments mess up when stepping away from their specialty to appraise non-res properties, much like CGs screwing up an SFR appraisal because they never actually learned how to do one. That example is practically a cliche in the appraisal business.

My point is that licensing status notwithstanding, there will still be a competency benchmark to meet; and your peers for that assignment will be other appraisers who normally do such work. I'm not trying to talk the OP out of this assignment but I am saying it will take some extra time/effort on their part to bring themselves up to speed on what it takes to walk the walk.

Just having access to the right data for such an assignment can be a challenge, depending on how the properties are marketed and sold in this area And I'll say right up front that the operative unit of comparison for an office building will not be the sale price itself as is the case for SFRs and 2-4s. It will be the price/sf and you're going to want to seek out other office use properties with comparable configuration and occupancy (single tenant vs multi-tenant, general office vs medical/dental office, etc).

 

[J Grant]

Even if I felt competent to do a commercial assignment, as a res license I would not, just too many possibilities for a complaint ( even if the appraisal itself is fine(

 

[George Hatch]

War story.

Some years ago I had a CR contact me and ask for advice because the San Bernardino County Assessor had sent them up to the state board for one of their reports. The appraiser hadn't even done the report for that type of use; the borrower in a private money transaction had submitted the appraisal report from their loan to the County in order to appeal their tax assessment. AKA a blatant off-label use.

The Assessor (ostensibly) didn't send the report up because of the license, they sent it up because of SR1/SR2 issues. And they were not incorrect about those issues, so I advised the appraiser to not fight those issues. He ended up with a small fine and an agreement to comply with the COMPETENCY RULE in the future. The state didn't even require him to stop performing those non-FRT appraisals.