Aw shucks, first we have to agree on what “smart” means! It can mean clever, shrewd, correct, intelligent, glitzy, or something that smarts, or “stings.” And it seems we must also consider what is our context. What world are we in? I recently tried to do a simple, core analysis that we do in SGDS […]
Data entry – or data analysis? The new URAR – using UAD 3.6 standards – is a way to fill up the GSE’s (Fannie/Freddie) database. Using appraiser appraisal output, the database will contain an extraordinary amount of information on every unit in America, if appraised by an appraiser or inspected by an unlicensed property inspector. […]
Ethics: Rules are Rules! Or are they? The appraisal profession professes to be ethical. What does this mean? Does it mean I follow certain rules – or does it mean I lead an ethical life – a behavior? Let’s look. We get our ethical rules from two basic sources: USPAP (Uniform Standards of Professional Appraisal […]
What adjustment is the “right” one? The world of appraisal adjustments is problematic. We get a wide range of promises and incantations. Proprietary sellers of appraisal software tend to make claims like: “Use our software to prove your adjustments!” Education providers tend to use vague promises verbally describing “techniques” which are inherently mathematical in nature. […]
Is there something missing — in the appraiser software designed to fill in the UAD 3.6 FannieMae/FreddieMac residential database form? An appraiser is charged with analytically predicting the “most probable” selling price. The science is straightforward: 1) Identify the problem (scope); 2) Select the data; 3) Apply a model/algorithm; and 4) Pick a certain single-point […]
The new URAR (UAD 3.6 “DATA RECEPTOR”) claimed to modernize appraisal. It seems it does not! In fact, it is not a form. It is a “dynamic, data-driven report, not a static form.” This per the FannieMae, Freddie Mac documentation. It requires “UAD 3.6 software, job aids, and XML, mapping tools.” What does all this […]
Is Tech-Knowledge the appraisal “approach” of the future? Yes. Two main reasons: The legacy “three approaches” were each enabled through the technology of that day. The legacy “three approaches” were each motivated by the valuation needs of the of that day. The Technology motivations: The cost approach, first on the scene, was driven by industrialized […]
Does Evidence Based Valuation (EBV) renew – or replace — traditional appraisal process? Is this a new thing, or an old thing made better? To answer this question, we need to look at the basics. We need to compare the steps of TAP (Traditional Appraisal Process) with EBV — modern Data Science applied to valuation. […]
Are Appraisers Obsolescent? The new URAR replaces the old URAR. What’s the difference? The old was designed for difficult, sparse data, and hand calculator analysis. Nearly 50 years old in its original design, with minor changes. Three comps on a “grid.” Describe the neighborhood. Use your trainer’s “adjustment sheet.” Regurgitate and explain the uncertainty and […]
. . . But what can UAD software not do? Worth a look. Whatever the software cannot do, an appraiser (or someone else) must do! UAD is “Uniform Appraisal Dataset.” Data set. Not analysis set . . . It appears that (with minor exceptions), appraisers are expected to continue with the un-modernized, legacy appraisal process: […]
Appraisal Analysis is not a part of the UAD 3.6 “form” as required by the Fannie Mae and Freddy Mac. Critical thinking requires we get stupid before we get smart. Like: “what is an appraisal”? The commonly accepted meaning is the appraisal report. The numbers and words thing you hold in your hand, or see […]
Appraiser curriculum for today’s aspiring trainees rests firmly on “recognized methods and techniques.” The old stuff. “Methods” are a work-around for the sparse and messy data. Methods are not models. “Techniques” are procedures: Practical skills. The art. What today’s trainees actually need is an understanding of empirical models, repeatable algorithms, and brain-machine interface. Including proper […]
Current appraiser trainee requirements involve principles, practices, and standards. Unfortunately, trainees are being grounded in the old “experience” basis, instead of today’s analytics basis! USPAP Standard 1-1(a) first sentence says, “The principle of change continues to affect the manner in which appraisers perform appraisal services.” Yet appraiser-training stays stuck in outmoded ways. Recently, the same […]
The recent Appraisal Institute appeal to HUD to apply Evidence-Based Valuation Enforcement is a (nice) move in the right direction. If regulators and users begin to apply it, demand it — the appraisal profession will finally have to comply, and provide modern evidence-based analysis. Read this earlier post here. Today’s “pick comps, then adjust” model […]
We hear a lot about evidence. For valuation, there may be two relevant definitions. One would be the legal concept, the other being the “support” required to be credible, “worthy of belief.” In the law, evidence is factual information. It can be testimony, documents, physical, demonstrative, or circumstantial. Relevance can be probabilistic. Colloquially, evidence is […]
