Can science be unscientific? Why do we care? In USPAP (Uniform Standards of Professional Appraisal Practice), the word science is not used. Not once! The word scientific is used only in Advisory Opinion 9, where it refers to “scientific aspects” of environmental contamination. In The Appraisal of Real Estate, 14th ed. the word is used […]
“General” appraisers may not care about the 1004MC (market conditions addendum), or its replacement. But they should care about what happens next! The 1004MC was created by Fannie Mae/Freddie Mac in response to the economic meltdown around 2009. Appraisers were blamed. Everyone else tried to avoid looking culpable. Especially those who had profited greatly. Our […]
What are the elephants in the room? The elephants are our beliefs. These are the beliefs we all assume to be true. Let’s look at the first of our herd of elephants: number 1 – judgment. We often hear it said that no machine can replace human judgment. Or that appraisal will always require someone […]
We seem to be hearing stuff about risk recently. Why? Back in the old days, before internet but after the wheel – It was my challenge as a new appraiser to scratch together four or five comps, then put three of them on a form, or perhaps even all five on a table. We called […]
Asset Analyst: More than an appraiser? It is clear that the need for personal value opinion is going away. Yet the old appraisal practices and standards require an opinion. The new way is cleaner. Show your work – Just like your third-grade teacher told you. The old standards focus on the appraiser. The new standards […]
How does price validation differ from your traditional appraisal opinion? One of the arguments against the value of appraisals is that appraisers almost always just land on the sale price. How does this happen? Why? There are some obvious answers. The market system works, so the sale price should be near “market value.” Pressure exists […]
If you are disrupted, you can plant your feet in fear, and not change. If you are disruptor, it’s wise to know the game and play your best position. So what do we need to understand about “data disruption”? Several things: I have seen a list of nine such general principles. So lets see each […]
In Part 1, we saw that context is important in the use of an algorithm. In Part 2 we note the role of algorithms in modern asset analytics — the data science valuation view. The “problem to be solved” is the context for the use of algorithms. But what are the benefits of algorithmic thinking? […]
Three different types of clients , one appraisal type. Does this make sense? Different user-clients have different needs. Lenders need to know the potential for loss, to balance against the benefit of monthly payments. Investors need to know what their potential income flow will be, and/or the probability of gain on sale. Other clients, such […]
An Algorithm can leverage appraiser market knowledge and experience. Algorithm combines computer power with informed human brain power. Algorithms are the key to the future of valuation work. Let’s continue on from What is an Algorithm? Part 1. The future appraiser must own competencies in the use of models, algorithms, visualization, and the delivery of […]
I am a smart and educated, award-winning appraiser. It is not possible for me to be irrational. Of course not. You can see that. I can see that. A high IQ and education won’t necessarily protect you from highly irrational behavior—and it may sometimes amplify your errors. David Robson, in an Excerpt from The Intelligence […]
A student recently asked this question (algorithm) in a Stats, Graphs, and Data Science1 class. It is an important concept for the future of asset analytics. Yet the class did not really explain or even define the word. Is it about thinking? About computation? Or is it like a new approach to value? To explore […]
The new body of knowledge for valuation incorporates much of the old appraisal body of knowledge. What is the difference? The fundamental dividing line is actually simple. Editor’s Note: This is part 1 of a series. Part 2 is here. Traditional appraisal practice was developed almost 100 years ago — in a dramatically data-different world […]
If we had an Appraisal Inspection Standard, how would it look? To frame this question, we need to look at what we have today regarding inspections, and what is really needed in the world. Let’s look then under common United States specifications. What we have today is left entirely up to the appraiser. The only […]
How can spreadsheet software hinder the profession? A Wall Street Journal article, and a presentation at the Appraisal Institute National Conference have similar stories. One addresses accountants, the other is about appraisers. Editors Note: The Stats, Graphs, and Data Science classes taught in Detroit the week of September 23-27, 2019 included the first ever meeting of […]
