No it doesn't. You're wrong about that. Incorrect. Error in fact.
The COMPETENCY RULE doesn't require the appraiser to know everything about an area, a larger region, a specific town or a subdivision. Let alone know it all at the outset of the assignment.
There is what the RULE and SR1 actually say, and and whatever they don't say they simply don't say. SR1 provides the elaboration of the COMPETENCY RULE as it applies to appraisal development, and SR1-2.e speaks to the this issue:
"(e) identify the characteristics of the property that are relevant to the type and definition of value and intended use of the appraisal"
Note the SR doesn't refer to requiring the appraiser to identify everything, but does refer to those characteristics that are relevant to the type and definition of value and intended use of the appraisal. Which in this context includes the location, physical, legal and economic attributes of the property being appraised.
The URAR is an appraisal report format that was designed by Fannie (the dominant superuser) for their use, and which has been widely adopted by almost all residential users as their default.
Fannie has told appraisers that the form drives the development, which makes anyone who is USPAP-savvy crazy because they're incorrect about that aspect, but nonetheless that always been Fannie's view so I think it's safe for anyone to take them at their word that the level of detail they ask for on that form represents the reporting element of the level of development that they consider to be meaningful and sufficient for their use.
You can expand that to include the 1004mc analysis, which actually speaks to the subject's market segment, not necessarily the immediate neighborhood, but the application is the same in any case.
The GPAR is another form residential appraisers use, and it's basic format is the same except for some of the housekeeping elements. The AI forms were designed by the AI and IIRC even their form doesn't go beyond the subject's neighborhood, or if it does it's asking generic questions you can extract from a Wiki entry.
Now you can move the goalpost and say Fannie didn't really mean it when they limited the macro view of the analysis to extend no further than the neighborhood but you'd have a tough time demonstrating how they were actually asking about the region, the county, the city or even the community in which that neighborhood is located. because those are questions they didn't ask, and which most local buyers aren't considering in making their choices within this or nearby competing neighborhoods.
Moreover, most SFR appraisers don't even get into the specifics of neighborhood composition in that section, and many appraisers simply defer to the meaningless boilerplate, so there's no indication those appraisers even know anything about that neighborhood except what they saw of it while they were there. That right there demonstrates what your peers actions are WRT identifying relevant characteristics that occur outside the subject's parcel boundaries.
So what questions does Fannie ask about that neighborhood that you would be unable to answer from your desk prior to even setting foot there? None. If you have the appropriate datasources and those datasources are reasonably complete and reasonably accurate to answer such a question you could do it all from your desk. Unless the quality of the available databases are sub-par you can figure this stuff out in just a few minutes with a little digging.
You know it, I know it, and so does everyone else here.
If all your comps are located within that neighborhood then it basically doesn't matter what else is going on in that community or that region because the comps that matter are subject to all the same factors as the property you're appraising. Not that Fannie or most of the lenders are even asking those questions because they aren't.
if all your comps are recent and located in that neighborhood then what difference does it make that Mr Bert Lizard is the neighborhood's dominant broker or that XYZ andscaping has a cult following? If these attributes are significant to the marketing of a property then it will be mentioned prominently in the listing.
So yeah, we can attribute the pixie dust factor to what we do in these assignments and tell people it takes meme magik to complete properly, but none of that enters into what these users think is meaningful to their decisions.
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. I still fail to see the threat that you allude to regarding competency spilling over into geo competency- is it a USPAP supplemental or additional standard addressing geo competency as a component of competency you see coming ? If so, what might it look like?
