North Dakota is seeking a 5-year temporary waiver for certain property types depending on the property value. Here is my quick take.
I am a commercial real estate appraiser based in Minneapolis and have been working in western North Dakota since 2012. Starting in about 2009 and extending to present, the commercial real estate market has experienced unprecedented supply and demand changes and corresponding impact on property values.
As Simonson Appraisals has continued to add clients in this region (and open for more), we have added appraisal staff in the local office area of Minneapolis/St. Paul to ensure turnaround times and fees remain typical and reasonable.
North Dakota’s economic volatility observed in the last 10 years results from a commodity-based economy heavily dependent on oil and agriculture. Having now appraised property in 13 states during my appraisal career, I can say with 100% certainty the western North Dakota market is very unique and requires intimate knowledge to understand property values. Over the past five years, it has not been uncommon to see revenue on income producing properties drop 50%-70% in less than 12 months and then rebound at nearly the same pace 24 months later. Coupled with limited market data at times results in greater challenges to appropriately support property values as they change from one extreme to another. All of this results in greater lending risk and time required to adequately support the value conclusions.
I recommend that the Appraisal Subcommittee deny the request for a temporary waiver of appraiser certification and licensing requirements.
Mitchell Simonson, MAI has been in commercial real estate for 15 years and founded Simonson Appraisals on January 1, 2019. Mr. Simonson enjoys writing about and discussing commercial real estate, personal development and business. Do you have questions on these topics? Contact him today!
There is no need for this. Do you realize that because of the AQB dropping the requirements that this proposal will go from 2 years training down to 6 months. How can this be beneficial?
There is no appraiser shortage, even of you believe that there is the dropping of the requirements will change that and it unreasonable to use data prior to the gutting of qualifications.
Ive been in the real estate industry for going on 18 yrs. I started like most, working for an appraisal firm, then built my own. I managed appraisal firms and even went to work for a national reverse mortgage company, and later a national servicing company working acquisitions and portfolio management for some large lenders.
I have done review of appraisals and assets in all states including Puerto Rico. One thing is certain… there is a justifiable need to hold and maintain the independent and hnbiased opinion of a 3rd party appraiser. Like any good reviewer, we rely on tools… there is a huge need to understand the market, the asset and the marketability of that asset…
The average person has no idea what is out there… from the single family home, to the barnodominium to the yurt or geodesic done with never ending views… the idea of having any kind of waiver that does not give eyes and ears to a lending institution is ridiculous. Even in tract developments, the idea that photos can be taken or aerial shots used will never replace the appraisers observation that something could be wrong. A simple general glance at a foundation, or puddling water, or even cosmetic repairs that look good on photos but are completely visible on inspection… whether the electricity is on, or the water….
You will never replace the eyes and ears of an appraiser. Who would buy the loans on these homes? Who would ensure such properties?? I would hope and pray that this does not happen… while an appraisal, like an AVM or BPO, is a tool to understand value, most loans are not valuing just the number, but the asset… and if the value is not there in the asset, there will be no monetary value in the future.
While this