Time “adjustment” is not really about time (or so they say). It’s about changed market conditions since the time of the comparable sale. This wording works fine for legacy appraisal practices. The modern, data-centric, data science approach is clear that the market conditions are measured at points in time (or a continuum of time). Thus, […]
Is time an adjustment? What is “acceptable” appraisal practice? The new GSE (FannieMae, FreddieMac) guidelines still require adjustments for market conditions. Market conditions are different at different points in time. Duh! Time adjustments have always been required. Seldom enforced. Seldom done. Now lenders will be required to actually expect market analysis on every professional appraisal. […]
My New Year’s resolution may work, or it may not. How do I create a high probability I will be successful? There is a science to this. There are issues of personal psychology. And there are some spiritual principles that work. Finally, physical action directly causes results. And how about willpower? How do I resolve […]
Ethics is a discipline about what is morally good or right. In this time of much religious celebration, we note that most religions are based on specific spiritual principles. These are behaviors that most recognize as being healthy for the individual and for society. Ethics easily touches other areas of study, including anthropology, biology, economics, […]
Fun insanity — time adjustment requirements made simple. A concise market conditions guide and summary. Let’s outline the new GSE requirements: Time “adjustments” will be a required field, even if exactly zero! (Zero is a number.) Time-series analysis is an established method in economic measurement. The appraisal challenge is the varying relevant data sizes. The […]
Time-series adjustments and market conditions are required by Fannie Mae and Freddie Mac. A recent FHFA research paper revealed that as few as 10% of appraisals had been even attempting a time adjustment, although in some markets, where the value was not “high enough,” the time adjustment came in handy to get closer to the […]
First, note that the time adjustment is core to market analysis. It is not about “comparing comps.” It quantifies two things. The change in: 1) the value of the dollar and, 2) market segment price levels. Reference: FHFA Working Paper 24-07: Disparities and Time Adjustments, the paper by William Doerner and Scott Susin (FHFA) relates […]
How do we connect Thanks Giving with Critical Thinking? First, we can recognize gratitude (giving thanks) as a neuro-spiritual tool – with benefits. And we can recognize critical thinking as a tool towards good judgments and action. So how do we connect these seemingly detached (thanks and thinking) ideas? Critical thinking is a necessary part […]
Recent GSE (Fannie Mae and Freddie Mac) guidelines for appraisers and lenders make some assumptions. In particular we can use, for example, the requirements for market analysis and time adjustments. USPAP (Uniform Standards of Professional Practice) Rule 1-4 states that an appraiser must “collect, verify, and analyze all information…and must analyze such comparable sales data […]
A time adjustment is needed because all our sales data is historical. A sale price 6 months ago cannot be properly reflected in today’s dollars. Two parts. Two components. Two reasons: The value of the dollar has changed. The competing market price level has changed. Editor’s Note: This blog is part 3 on the Time […]
Recently, Keith Wolf (representing Freddie Mac), coined a new term for claims about adjustments, calling it the “adjustment fallacy.” Adjustments to comparables first arrived on the scene as a way of explaining differences between the subject property and a compared comp. (A way to ‘support’ an opinion comparison.) In theory, an adjustment is supposed to […]
Should the AI (Appraisal Institute) teach AI (Artificial Intelligence)? This is Part 2 on the Series of the Appraisal Institute and Artificial Intelligence. Read Part 1 here. AI tools, such as ChatGPT, depend on prior knowledge being published somewhere out there in the cloud. Somewhere. The AI (the education provider) continues to emphasize the supremacy […]
The new UAD and URAR come on together. In this second part, we prepare to look at possible unintended consequences. (Catch up and read part 1 here.) In later continuing parts, we will look at how the URAR/UAD format “dynamic” may affect users: appraisers, lenders, AMCs, and others. Finally, we might look at how the […]
The upcoming UAD (Uniform Appraisal Dataset) was part of my presentation at the CRN (Collateral Risk Network) meeting at an appraiser conference in Las Vegas. The CRN panel was from a workgroup. That workgroup effort is for lender and AMC “readiness” for appraisal acquisition (ordering). This UAD topic is intertwined with the new integrated URAR […]
Around every corner, someone wants appraiser’s to buy their technology. We get techhype – buy our wonderful . . . “Prove your adjustments.” “Bulletproof your reports.” Technology of computers and especially software. “Buy our most clever delivery product.” We started with electric typewriters and adding machines. Then calculators (like the hp12c) and fast dot-matrix printers. […]
