The Appraisal Foundation Advisory Opinion 41 is about “when technology is used” in an appraisal. Is this a solution seeking a problem? (I use “technology” in every appraisal.) A snippy response might note that the modern electronic typewriter, with built-in whiteout ribbon, is technology – as is the modern ten-key calculator. We have always used […]
Lately, the word “technology” has been making the rounds. Partly this was triggered by the GSEs (Fannie/Freddie) “modernized” report requirements. The Appraisal Foundation also recently released its new 14 page Advisory Opinion 41 (AO41): Use of Technology in an Appraisal or Appraisal Review Assignment. The object is to “address the appraiser’s responsibilities” – under USPAP […]
Issues of housing, homelessness, wealth, technology, and appraisal — these may seem unrelated, yet they are. Public policy, albeit well-intentioned, has established a complex, convoluted, expensive, and confounding construct — a contraption that subtly affects every citizen (and non-citizen) who lives, eats, and works in our society. Yes – appraisal is important. Can it be […]
It seems that lately, we hear about mythical ethical. And of magical technical. We have ethical rules. And technical tools. We have Standards, Advisories, Guidelines, Users’ expectations, Peers’ actions, “approved” curriculum, seminars, classes, textbooks, and admonitions for “recognized methods and techniques,” “correct research and analysis,” “sufficient care,” “diligence,” and above all – do not be […]
EBV© (Evidence Based Valuation) was created to update the appraisal process to modern standards. The appraisal process, and appraisal standards were built to accommodate yesterday’s difficult and sparse data. Just collecting the data was 80% of the work. Who you knew was as important as what you knew. The process was simple: 1) collect some […]
Market Analysis Approach. A Heresy! Who does he think he is? Everyone knows there are three approaches. Everyone. It’s in the book. It’s in the classes. It’s in USPAP. Clients require it. It’s in state regulations. It’s the law. It’s not true. There are other ways. It’s not true . . . It depends. It […]
Appraisal education, practice, and standards have not kept up with changes in data, computation, and communication. Scope of work is supposed to include the extent of: Property identification Property inspection Data researched Analysis used There is a missing piece. This piece is ignored, avoided, deflected, and denied. The substitute is “my experience, superior knowledge, and […]
Credibility is defined as “worthy of belief.” The entire foundation of legacy appraisal practice and standards is “credible.” The word “credible” is found 289 times in my most recent USPAP edition (Uniform Standards of Professional Appraisal Practice). Wow. It must be important! The word “worthy” is found only once! And that is to help define […]
Scope of Work for an appraiser is an overriding consideration. In USPAP (Uniform Standards of Professional Appraisal Practice) it is nicely described. Once the “problem to be solved” is identified, the appraiser is to: Determine work necessary to solve the problem; Correctly complete research; Correctly complete analysis; Produce a credible These words seem obvious and […]
A new Scope of Work may require a better, modernized analysis – Intelligence Appraisal. Intelligence Appraisal (IA) combines AI with human intelligence, built on the science of valuation. The new UAD reports enable and even require a new appraisal development competence. Editor’s Note: This is a part of a series on Appraisal Intelligence. Read the entire […]
Early in my career, there was no “Scope of Work” part in the appraisal standards. The appraisers that trained me, however, did tell me it was good to figure out the problem, the property, and the perspective needed. My academic history told me: oh – yea! Kinda like a hypothesis! Editor’s Note: This is a […]
I just read these words “epistemic persistence!” Had to look them up! Last week’s blog talked about the power of words. On discovering these new ones, I was gobsmacked (another cool word)! These two words together concisely describe what has been bothering me about the appraisal function (and many other things we humans seem to […]
Last month, I started the series on the impact of artificial intelligence on appraisal. It seemed it would be an easy topic, one which would expand to challenge and forecast the future. And the deeper I went, the easier it went, and the deeper it went. How deep? I quickly realized that much of our […]
An appraisal is an opinion of value. It is not the report! Nearly all recent hullabaloo about modernizing has been led by the big customers: FannieMae and FreddieMac. The “UAD” and “new URAR” is about the report. Not your analysis! Yes, the report does affect the analysis. But it is not “the act or process […]
On March 13, the President’s office ordered actions “Promoting Access to Mortgage Credit.” An Executive Order. Read the full document here. This President’s order sets goals of “reducing lending costs” and to “remove regulatory distortions” to “the structure of the mortgage market…” Section 6, Appraisal Modernization, states: Modernize appraisal regulations and guidance; Expand the use […]
