100% correct!

Jack, disagree re FHA ignorance. Call your regional center-usually outstanding folks and well informed barring exceptions. They may adopt dumb policies about every ten years or so, but they usually fix them when folks stop doing work for them and tell them why. Remember the old mandatory use of M&S and no allowance for market driven entrepreneurial profit beyond that allowed by cost service? I stopped working for them for three years that time.

As someone who services one county (100+ zip codes) with 3 million people in it all within 30 miles of me, there are nearly a thousand licensed appraisers located in my county alone (competition). If one has serviced a single county for 10, 15, 30+ years, etc. and via government involvement (HVCC / amc’s), ones geographic competency by definition of a client gets shrunk from a single county to within a few miles of ones home/office (some computer matrix), then many will disagree with your liking of proximity rules. I could be the most qualified, but via proximity rules, have 300 other appraisers be closer than the ten miles I am from the property in question. As I previously stated, its one thing to get paid less for a report that may take twice as long to complete, but its another thing on paper/computer for ones work area to be reduced/eliminated by up to 80%. Not saying this is the path I took (VA covers the entire county), but when 80% of residential work gets filtered via amc’s and their computer algorithms,, this is fact for many.

While very rare, I have performed appraisals of property in New York, Florida, and Pennsylvania. I helped develop a system for appraisals in Delhi India. I bid on jobs in Mexico and the Caribbean. Every one of these assignments included added time to familiarize myself with my subject markets.

In the case of the India assignment it meant learning fundamental differences in simple (Vedic based) counting, and translating that to western numeric concepts. It also meant understanding government imposed (presumed) values or ‘circle rates’; and the grey market sales that predominate.

Before becoming an appraiser, the worst value mistake I ever made was in the area I grew up in, about 1/2 block from my high school. It was also my real estate sales ‘farm’ area. I knew it like the back of my hand.

However, the market didn’t limit itself to the physical boundaries I knew about since I was a child. The competitive market had already expanded the area I knew so well. That mistake prompted me to become an appraiser.

Geographic Competency (GC) is one of those buzz phrases people like to throw around without having to learn what it means. By itself it means nothing.

A good appraiser performing to accepted practices and principles can appraise anywhere in the United States competently…as long as they take the time and exert the effort to do so. That costs extra.

So, my take on GC when used by a lender is “We are too cheap and unrealistic in our turn around times to pay for a competent professional, or to allow them enough time to do the job properly. Therefore we will settle for ‘next best’.” Perhaps someone that knows the area like the back of their hand and that wont have to bother with all those pesky appraisal standards.

Y’all know them. They already know that the adjustment for GLA is $25  sf (maybe even $40 or $50 in high cost areas) just like it was in 1986; and that bedrooms are $10,000; common rooms and full baths are $5,000 and half baths are $2,500 and that no line adjustment will ever exceed 10%. The ones that learned rote adjustment from the Property Science Mill…or FNMA.

Although its been many years Tom since I’ve done a non VA appraisal for Wells Fargo, their computer matrix at the time frowned upon any distance further than 5 miles from ones starting point. What these companies do is often city, county, regional, and state specific, thus what they do in my area, WILL almost always be different from what they do in your area. If prior to HVCC ones coverage area included one county (3 million people) (as most appraisers do in my area (Ocean to the West, Mexico to the South, Desert to the East, Government land to the North), and post HVCC your area became a 5 mile radius, then by default the lenders reduced ones geographical competency area by 80%. In my opinion, many appraisers in the higher population centers (more appraisers in the area), face these unusual circumstances. Its one thing to earn less money (AMCs), take twice as long to complete the reports (scope creep), but an entirely different animal when your work area is reduced to 20% of what you used to cover. Not saying this is the path I took (AMC enslavement), but with 80% of the work being filtered to AMC’s, this is the path for many.

Seek the truth.