Driving 356 miles for an appraisal inspection

I am looking at an appraisal on my desk right now where the appraiser drove from Fresno to Mather to complete the appraisal. Google Maps estimates the 178-mile trip would take 3 hours and 10 minutes (that’s only one way – 356 miles roundtrip). This distance is a very long way to go for a standard tract home inspection, yet technically acceptable so long as the appraiser truly knows the local market. Keep in mind the roundtrip in gas would’ve cost about $45.00 based on 30 mpg.

In this case it’s questionable to think the appraiser understands the local market. There is no mention of “Independence at Mather” being a PUD with a monthly HOA fee. In fact, the appraiser says there is no HOA fee. There is no mention of the neighborhood being located within close proximity to the Sacramento Speedway or Mather Airport (formerly an air force base that is a Superfund site). The appraiser probably didn’t know portions of the neighborhood were formerly military barracks before new houses were built by SHRA and KB Homes. The appraiser was likely not aware of Aerojet, the meat rendering plant nearby, the limited amount of commercial properties and future plans with the Anatolia area. The appraiser most likely was not aware that Mather is not a city or CDP, but rather an area of Sacramento County.

I don’t bring this up to toot my own horn, but only to say that it’s important for an appraiser to know the local market well. This is called geographic competency. When you hire an appraiser, ask him if he has experience in your area and if he understands issues that may impact real estate values in the local neighborhood. Unfortunately there is very limited control over hiring a local appraiser for a loan, but home owners, attorneys and agents can still pick their own appraisers for estate settlement, divorce, bankruptcy, pre-listing, tax appeal, etc…

Questions: How do you think it might impact value on an appraisal report if the appraiser does not know the local market? If you are an agent, do you find most of your appraisers lately have been local, or are they coming from far away?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook or subscribe to posts by email.

Comments

  1. says

    In the days when trainees were part of our role as supervisors, it was not uncommon to have people a number of miles away to cover the top end of a contiguous county. For me that was Alameda, 50-60 miles one way in traffic was easier done by a trainee. Now lenders no longer want a trainee to sign a report acknowledging their work, further, the lenders insist that every supervising appraiser personally inspects the home directly. Clearly until/unless this policy changes, there is no room for legitimate trainees in this business. Then of course, an appraiser can lie and say he drove to Fresno personally, and end up as a desk review for geographic competence. Was it worth it for a small appraisal fee to jeopardize his license?

    • says

      You’re right. It’s not easy for trainees out there at all. I have met several people recently entering the appraisal field and I think they have an uphill battle to get to the certified level. However, if the trainees can connect with the right people and hang in there, there may very well be a shortage of appraisers some day.

  2. RRiicckk says

    Please, there is an easy alternative explanation about driving 350+ miles.

    Back in 2006, when I was reviewing for Indy, I saw an appraisal that indicated the appraiser, **and his trainee** drove some 115 miles (one-way) from Bayonne, NJ. to Wilmington, De. to appraise a cheap row home.

    Do you seriously think 2 appraisers would waste a minimum of 5 hours travel time, not to mention wear, tear, and gasoline, and the hassle of obtaining MLS information, for one $325 appraisal fee — especially during the feeding frenzy that existed 2004-2007?

    No, the primary appraiser hired someone local to do the work, at a discount, and then signed off on it.
    …and that’s probably what YOUR not-so-mad appraiser did, unless he sent an untrained “runner” to do the inspection, which is just as probable.
    .

    • says

      Thanks for the comment, RRiicckk. It’s certainly possible that the appraiser simply farmed out the inspection. He did sign the report as himself. It’s not unrealistic to think an appraiser drove as such though still. If work was very slow, some appraisers would take on assignments as such. Whatever the case, an AMC ordered an appraisal from an appraiser located very far away and that is a very valid concern for the industry.

  3. Scott Swanberry says

    Actually, the trip cost is closer to $0.55 per mile, figuring fuel, vehicle depreciation, and insurance. That would make the trip cost roughly $200.00………………OUCH !!

  4. Chris says

    I recent did a historical review of a Modesto, CA appraisal and the appraiser was from Oceanside, CA…that’s +400 miles one way.

  5. says

    Look, I feel that to much emphasis is put on “going to far” to do an appraisal. I have never heard how far to far is. We need to remember an importanant factor. Your state licence covers the entire state.
    In my opinion heres the key to traveling to a “far away” location. DATA. If you have good current data on the location you are traveling to and you know what you are doing the distance is not that big of a deal. You say a super fund site is near-by. Several things come to mind. Google the area/town/county you are going to. Check out the local governmental web sites.You also need county assessor data. And most important you absolutely need local MLS. If you can find a reasonable amount of comparables CLOSE to the subject won’t these properties reflect that super fund site? And by the way what if that Fresno appraiser had a friend or family member in Sacramento and included some business with pleasure. The proof is in the finished product. I’v seen some really bad appraisals and I’m sure you have also that were completed on properties from the appraisers own home town. Going further afield in these really tough times should not be frowned upon. Most of us need to make a living and thats really what this business, like any other business is about.

    • says

      Thanks for the comment, Vince. I agree with mostly everything you said. I think you’re right about competence being able to be established and some of the important sources for information. All I’m saying is that it’s probably not in the best interest of most parties involved in a loan trasaction for the appraiser to be coming from 178 miles away to do an appraisal on a tract home. Local appraisers will generally understand the local market a bit better than an outside appraiser, right? Don’t you think that’s generally true? I just got back from a week vacation in Huntington Beach. I could have technically fished for some appraisal orders from clients, but local work is really best left to local appraisers who know the ins and outs of local real estate.

      I don’t frown on appraisers who drive extraordinary distance for their work. However, I do believe there is a better way. If the appraiser is being paid very decent fees for such work, there is no issue of course. But if the fees are very low and all that time is being spent driving, there is not much profit to be had. Ultimately it may be prudent for appraisers in these situations to find avenues of local appraisal work that would pay better and not involve huge gas fees too. My humble two cents.

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