What’s missing? Appraisal reform is focused on current ‘urgent’ issues. The problem is that some fundamental, underlying issues are not in focus! The concern is that it’s the underlying foundation that may be the core of the problem.
Current (urgent) issues include:
- Bias: real and perceived
- Wide range of opinions of value
- Appraiser diversity: age and racial
- Large, complex regulatory burden
- Discriminatory industry regulation
- Lack of coordination of valuation stakeholders
- Reconsideration of value when “your opinion is too low”
- Focus on “believability” rather than reliability of appraisals
- Education, standards, and regulatory focus on outdated data assumptions
- Deadness of spirit in the profession
Each of the above issues is being recognized (maybe).
What’s missing?
What is not being discussed is “data selection” (formerly known as “picking comps”).
The appraisal process is basic:
- Define the problem and assumptions
- Identify the data needed (subject, market segment, and predictors)
- Apply predictive methods (adjustments/comparisons)
- Perception delivery (the ‘report’)
The missing solution should be the obvious one: a better product! The traditional appraisal product is based on personal experience and hands-on learning passed down from elders to newbies. In the case of appraisal, it has been from father to family. This training model perpetuates discriminatory results. It also perpetuates outdated practices.
The modern valuation solution is different. It is about data. The science of data. And perception.
It’s different in that the problem is quantified, not just described. The data is market determined, not just judgment based. Predictors are algorithmic, not judgment based. Reports are interactive, not static print-ready.
Traditional Valuations produce an opinion “worthy of belief.” Uncertainty is dodged. No forecasting allowed.
Modern Valuations can produce reproducible, auditable, results — scored for risk and reliability. Not just point-value opinion.
Appraisal reform is best built on today’s analytic technology, not yesterday’s picking comps and making adjustments.