Appraisers are taught that there are three “approaches” to value. Follow the path, and you are safe. Standards, regulations, users, and peers all expect the “process” to be followed. Follow it, and you are safe. Appraisers are also harangued to be ethical and unbiased. Just be “impartial, independent, and objective.” No problem. Problem. Appraisers are […]
Should appraisal practice go back to original historical principles? Yes! Is the appraisal “body of knowledge” now well established — and finally in place? We here have long campaigned for the profession to “get with it” and start teaching modern methods. Modern methods include artificial intelligence, data science, and critical thinking processes needed to supplement […]
What is an “accurate” appraisal? First, we note that in Standard 1 of USPAP (Uniform Standards of Professional Appraisal Practice), accuracy is not required. What is required is that an appraisal be credible, or “worthy of belief.” Perhaps reviewers know how to judge “accuracy.” Good news. Standard 3 does say specifically that the reviewer must […]
A Body of Knowledge committee? I was just getting acquainted with the Appraisal Institute service structure. At one of the first of many times at AI national or Board meetings, it seemed a good idea to find a committee focused on where I might be able to genuinely contribute. Upon noticing there was a Body […]
Pick comps, make adjustments are the “recognized methods and techniques” which must be “correctly” used by appraisers. Originally, the practice was just “find comps and reconcile.” Some hundred years ago, the main task of an appraiser (usually also the local broker) was to track down sales. This involved phone calls to agents, people they knew, […]
I just attended the American Statistical Association joint conference in Portland. I learned some things: 1) I have forgotten a lot from my extensive graduate stats classes. 2) My narrow focus on valuation and risk has narrowed my world. 3) “Statistics” has widened, progressed, advanced, and gentrified. Statistics has progressed. Valuation has not progressed. Both […]
It’s easier to get paid if your service provides a real value. Old expectations, or new client expectations? Are you an “old way” appraiser? — or a “new way” appraiser? To see yourself, it may be good to observe what real value our appraisal customers want. The Old Way: Appraisal meant the customer had to […]
We compared what you know with who you know in part 1 – in the context of diversity (or lack thereof) in the appraisal profession. In the past many appraisers entered the profession because they were born into it or married into it. A third path was to become an admin assistant (or secretary), learn […]
The word bias brings up personal feelings in almost everyone. Even anger. Even a desire to strike back. Grrrr. This makes sense. Bias, and concepts of bias are personal. It’s about me. Or about THEM! Those people! They should just see things my way . . . The more writing I do, the more I […]
Who you knew was important when I was a trainee. What you knew was simple: compare comps. Find some comps. Make adjustments. Or — avoid adjustments. (My expert MAI trainer said “if you make adjustments, then the other attorney will ask you how you got the number.” “Just say better, worse, or similar!) Finding comps […]
Bias is an important topic right now. So what are we really talking about? Is someone right? And others wrong? Again, so much divisiveness today is the result of misunderstanding, and the tendency to believe whatever supports your prior opinion. I have heard: Appraisers are biased (meaning racially biased). Appraisers are not biased, so stop […]
Patriotism. Easy, everyone knows what that is! It’s Independence Day! It’s fireworks! It is a time to declare our devotion, love and support for the country. But devotion, support, and love are “feelings” not facts. And do we relate this sense of feeling to our personal actions? Our “support”? Can these feelings run deeper? Does […]
Adjustments to comparables seem to be required by lender clients, the quasi-governmental GSEs, and some other users of appraisals. But are they actually required? USPAP (Uniform Standards of Professional Appraisal Practice) says no. No. The word “adjustment” is nowhere to be found. (However Advisory Opinions say an adjustment should be “appropriate.”) Got it. Appropriate. Adjustments […]
The seminal appraisal model was espoused by George Schmutz in the 1940’s. His “appraisal process” followed the works of others starting in 1927 with Arthur Mertzke who translated economic principles to the unique economic features of real estate. Those works presented “systematic procedures” for applying the three traditional approaches to value. Editor’s Note: Find Part […]
Time adjustments have long been required as good appraisal practice. On the residential side, they are required in guidelines issued by FannieMae and FreddieMac (the GSEs). Unfortunately, the requirement for time adjustments (“market conditions”) has been ignored by the lenders selling to the GSEs (Government Sponsored Enterprises). Why? Editor’s Note: Read Part 1 of this […]
