Opinion is the required end product of appraisal, mandated by the quasi-governmental regulations. By “appraisal waiver” exception, analytic results may be allowed. (No opinion is necessary.) modernized Editor’s Note: This post is an intersection of Appraisal Modernization, Part 6 and Bias Part 5 The FHFA (Federal Housing Finance Agency) wants input on: Appraisal modernization; Data […]
What is “Appraisal modernization”? (This is part 5 in an ongoing series on Appraisal Modernization. Part 1 starts here.) The Federal Housing Finance Agency (FHFA) is seeking input to “create a more streamlined and accurate collateral valuation process.” It also wisely recognizes that new regulations “could have negative unintended consequences.” Said director Mark Calabria. While […]
In this time of New Year’s resolutions, bias has been much in our consciousness. Bias Pt 3. As a new appraiser, I knew little about bias. I did know that appraisers were expected to be unbiased in their opinions. It seemed simple. Be fair, and don’t let anyone bribe you to give the ‘value’ they […]
A year ago, in a land free of enemy Covidians, the topic was the failed resolution. We suggested a new attitude and new way to tie intent to results. Simple. Do yesterday to change today! Then know that today becomes yesterday in a blink. Blink. So today we suggest certain steps. These involve unlearning (as […]
Is it time to recognize the importance of EDA in all valuation products? EDA is Exploratory Data Analysis, sometimes called PDA (Preliminary Data Analysis). Who does it? Is it necessary? And why do we care? EDA (Exploratory Data Analysis) is a key part of the modern, data science solution to value and risk. It’s an […]
The “Appraisal Process” requires good judgment in picking comps. USPAP (Uniform Standards of Professional Appraisal Practice) uses the word comparable 95 times. Comps MUST be important. However, it is not defined. The Appraisal of Real Estate states a comparable must be similar, competitive, and “able to be compared.” In the 14th Edition, it is used […]
Three approaches to value evolved from the scarce data of the last century. With abundant data, three predictive models have evolved. What is the difference? Approaches vs models. The difference is like looking at a cube from the side or from the top. The top gives one view. The side shows another. In fact, they […]
Bias, We Got it Handled? We got standards, we got smarts. And we have issues . . . This is the second of a series asking questions and seeking answers about bias in valuation. Part One is here. President Biden proposed to “establish a national standard for housing appraisals.” The purpose is to ensure adequate […]
Judgment vs. Data. Computer quants vs field experts. Each thinks they have a better hammer. Quants think the experts have their eyes closed. “Experts” think the quants are hammering screws. Both have sore thumbs. Better In part 2, we considered heuristic analysis which focuses on mental efficiency to help make judgments and decisions quick and […]
Reasonable reasoning please! Its not as bad as it sounds! We can figure this out. That’s what abductive reasoning means! Figure it out! The three types of reasoning go along with three types of logic: deductive, inductive, and abductive. Deductive reasoning means a general rule leads to a specific conclusion, always true; Inductive reasoning is […]
Evidence is a necessary part of any research or analysis. In a prior blog, we considered that it was a core part of EBV (Evidence Based Valuation©). We noted three basic types (or ‘support’ for a personal opinion). We have logical – “if A, then B must follow”. We have empirical – “If A, then […]
More graphs: in data science, why are they so important? Graphs provide the way for the human brain and the computer to connect. And why is that important? More Computers are really good at certain things. They can handle lots of data and can quickly carry out complex instructions (algorithms) with no mistakes, with perfect […]
Judgment vs. Data. Computer quants vs field experts. Each thinks they have a better hammer. “Experts” think the quants are hammering screws. Quants think the experts have their eyes closed. Both have sore thumbs. Judgment Here, in part 2 we will look at the field-related expert, excelling in experience and judgment. In part 3, we […]
No computer can replace my expert judgment and experience! We’ve heard words like this. And there is a contingent of “quants” who rely on a high level of competence in quantitative methods, which may include statistics, machine learning, and artificial intelligence. Each expert type has a hammer. And each is right in their own way. […]
Consumer home loan valuations serve those who pay the bill – the lender. This cost is passed on to the buyer, and the buyer usually has a right to get a ‘copy’ of the report. However, the valuation is not there to help the buyer decide whether the price is fair or a good investment. […]
