The topic of geographic competence is all the rage these days among commercial appraisers. Here’s why:
The commercial appraisal industry is regulated by the Uniform Standards of Professional Appraisal Practice (USPAP). Understandably, USPAP specifies that an appraiser must be ‘geographically competent’ and become familiar with local market nuances. As with many professions, appraisers tend to be territorial. A defense of that territory is often launched by those hoping to protect it by accusations that appraisers coming in from outside the area are not geographically competent. Apart from goodwill and general kindness, there is little incentive for a local appraiser to cooperate with one who isn’t.
Fair enough. I do indeed believe that a commercial appraiser should be geographically competent and understand the nuances of the local market. But there’s another side to this coin.
There is a certain type of geographic competence that only comes with experience appraising a wide variety of property types across a broad geographic region. Plato’s allegory of the man in the cave is fitting here. The availability of information on the internet is making the world a much smaller, and more comprehensible place to live and work. The appraisal of some buildings, particularly those that are marketable on a regional basis, might best be performed by those who have stepped out of their cave.
But I’m interested in your perspective. What do you think it takes to make someone geographically competent?