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Please Define

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Bill Gutman

Sophomore Member
Joined
Aug 25, 2003
A licensed appraiser can appraise non-complex 1-4 residential units having a transaction value less than 1,000,000 or complex 1-4 residential units having a transaction value less than 250,000. So, my questions are:

1. What exactly is the definition of "complex" and "non-complex?" Does this refer to properties such as duplexes, 4-plexes, etc...?

2. Does the word "units" refer to the actual number of units in the property? Such as a four-plex having four units?

I am a new appraiser who is not licensed yet but is working towards the educational and work experience requirements required to take the Arizona state Licensing Exam. I know these questions are probably entertaining for some of you seasoned vets, but that is why I'm asking. Who better to ask than those who know right? Thanks.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
Bill,

1. What exactly is the definition of "complex" and "non-complex?" Does this refer to properties such as duplexes, 4-plexes, etc...?

"Complex 1-to-4 family residential property appraisal means one in which the proeprty to be appraised, the form of ownership, or market conditions are atypical.


2. Does the word "units" refer to the actual number of units in the property? Such as a four-plex having four units?

Yes. Units as used above means apartment units.

I take it from your questions that you are trying to define your limitations with respect to your appraisal license. A complex appraisal assignment as defined above pretty much inlcudes almost any property that is in any way out of the ordinary, which unfortunately, covers a whole lot of ground. If you have a straight residenial level license (not Certified Residential), the limitations desribed could be construed so far as to say that if the property in question isn't a tract home or its eqivalent, you shouldn't be appraising it. Even if it is a tract home, if it is proposed construction, major rehab or REO, some folks would consider those to be complex assignments not suitable for that level of licensure. I would, too.


I know at least one (like 12 or 15 years exp.) veteran appraiser who recently got cut from a bank's approval list and lost a ton of business because he never bothered to upgrade his appraisal license from Residential License to Certified Residential. The bank decided that the enough of their residential work fell under this "complex" category that they no longer wanted to try and decide which ones he could do and which ones he couldn't. Now, this is not to say the appraiser had a competency problem with respect to these assignments or that he was doing a bad job on them; the main issue is that his licensure level was insufficient for that type of work and the lender didn't want to get busted for allowing a ResLicensee to do ResCert work.

In other words, a straight licensee should upgrade to Certified Residential as soon as they qualify for it so that they can avoid these kinds of restrictions. If you aspire to appraise apartment properties with more than 4 units, you should be shooting for your General Certification.
 

Tejus

Member
Joined
Nov 1, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Ask your state appraisal board for their definition. Since the board enforces the rules, their definition is the one that counts. The definition may vary from state to state.

My favorite recent "grab my groin" response from the state board was:

"The recently updated state appraisal regulations do not reflect the state appraisal board's intent. You have to follow the state board's intent, not the written regulations published by the state board."

In situations like this, I believe the State Board/Attorney General's office have an attorney you can write and request the State Board get their act together. I was considering this, but some battles are not worth fighting.

bueno suerta.
 
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