Glossary of Terms
Geographic competency means having the local market knowledge needed to perform a credible appraisal assignment in a specific geographic area. Under USPAP's competency requirements, an appraiser must be competent to perform the assignment or take appropriate steps to gain the necessary competency.
Local knowledge covers factors that may not be apparent from market data alone, including which neighborhoods buyers consider comparable, how school district boundaries affect demand, whether a highway divides distinct submarkets and what construction characteristics are typical for the area. An appraiser can hold a state license and still need additional knowledge before accepting an assignment in an unfamiliar market.
Lenders and appraisal management companies may consider an appraiser's geographic coverage, recent experience and familiarity with the local market when assigning work. Strong geographic competency helps the appraiser select relevant comparables, recognize local market influences and develop a well-supported opinion of value.