The best general definition is: "Competence is the ability to effectively and efficiently perform a task or role to a high standard. It encompasses a combination of knowledge, skills, behaviors, and attitudes that enable an individual to achieve successful outcomes in a specific context or job function. Competence implies not only having the necessary qualifications and expertise but also the capacity to apply them appropriately in different situations."
We need a standard or protocol for determining degree of competence. Such a standard might attack the problem from different angles, that is different kinds of tests.
Competence in doing a complex task, is not just dependent on the person doing the task - but also the infrastructure and tools at his disposal. A trained surgeon of many years cannot be expected to successfully remove a stomach cancer without a satisfactory operating area and surgical tools. An auto mechanic with years of experience taking engines and transmissions apart and reassembling them will need al kinds of equipment plus reference books on the engines he is working on that layout the steps to take in execcuting certain procedures. Engineers need standards to effectively design buildings and bridges that meet the approval of government authorities - without having to redo all of their work.
99+% of appraisers do not have the supporting infrastructure of good standards, nor the statistical knowledge and computer assets to do good appraisals in complex residential areas. So I assert that most residential appraisers do not have the competence to do good work in complex areas because of the lack of supporting infrastructure such as satisfactory standards, lack of specific education on the use of advanced statistical tools such as MARS and R, and in some cases a lack of minimum intelligence required to do the job.
Now, needless to say, many existing appraisers don't know what they don't know, so I am wasting my time communicating the above to most.
Tests
1. Differing Values: Given reasonably good sales data, if you have two appraisers that differ in their value conclusions by more than 5%, then there are definitely flaws in the appraisal standards and/or the personal competence of at least one of the two appraisers.
2. Value conclusions are supported by two types of data: (a) Critical measurements (such as GLA and Lot Size) and (b) Explanatory data that simply attempt to explain the residual value. The explanatory data (such as verbal or approximate condition, quality, aesthetics) does not have to be accurate or even correct but should be a best attempt, as they don't impact value since they are protected by a firm residual value. But the critical measurements should be a best attempt at accuracy. If a review appraiser can find a more reasonably effective way to improve the accuracy of critical measurements, then that questions the accuracy of the original appraisal. In particular, if the reviewing appraiser can improve the accuracy of the appraisal by more than 5%, that certainly is an indicator of incompetence. Understand that 5% is not a Golden Standard - it is a suggested Minimum Standard. A good standard should lead two or more independent appraises to value conclusions that are within 1% of each other, although admittedly critical measurements often have to be at least partially estimated. There might be extreme cases where more than 5% deviation must be allowed because critical measurement accuracy is not possible beyond a certain degree, i.e. rough estimates have to be relied on. And a good standard should provide guidance on what degree of accuracy in estimation is required, - there has to be limits. If you can't get reasonable estimates of building area and lot size, then the best you can do if probably some large range - that might very well not meet the given SOW, - leading you to reject the assignment.
3. No one can find any correctable flaws in the appraisal, including measurements or value conclusion, that are improvements to the original appraisal, beyond a shadow of doubt. If you are the best, the only question, is whehter your procedures meet the agreed upon standards and SOW.
... I am sure we could think of more.
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