“I know a good comp when I see it! I have good judgment. I know my market. And I’ve been doing this for a long time.” (Oh yeah – I’m also pretty smart.) What do we learn to get an appraiser license? We are told that a comparable is competitive to the subject. Then, a […]
Judgment to analysis to science to econometrics? When will this foolishness stop? I liked appraisal the way it used to be. It was slower, but more fun: Pick six or seven comps, go look, take pictures Pick three or four ‘good’ ones. Explain, justify, and support your opinions Then data got easier – on line. […]
Believe or don’t believe. Is there a parallel between appraisals and how people respond to pandemic warnings? Appraisal reviewers decide whether an appraisal is “worthy of belief” (“credible”) or not. Similarly, people decide whether to believe in the need for public health orders. Steven Dinkin (president of the National Conflict Resolution Center) recently had some […]
We hear about models and algorithms. We are told the appraisal process is a model. And so are the cost, income, and comparison approaches. No big deal. Ok. So now we know there are big models, and sub-models. An appraiser must know how to model. We have also heard about automated valuation models (AVMs). Hmmm. […]
In Part IV, we continue our quest for modernization of appraisal. In Part I, we clarified that an appraisal is an opinion. We figured out that opinions don’t modernize well! We also saw that market price may or may not be true value. And that clients of all types need more than a historic point […]
The 1004MC form failed on every important principle of modern science of data analysis. Can we avoid yet another complex, ambiguous monster? What are the simple principles? Data science is new. It replaces much of the old “take a sample” statistics. And we learned this “inferential sample statistics” from professors who learned it in the […]
KISS — Keep it Simpler Science! What?! How can that be?! Einstein said “Everything should be made as simple as possible, but not simpler.” The beauty of science is that it strives to make difficult things understandable. Traditional appraisal uses four or five comparable sales. The human brain can compare and understand up to six […]
Inference is defined as a conclusion reached on the basis of evidence and reasoning. I have often said the biggest problem with statistics is words. (The very word statistics is used in more than one meaning – often in a misleading way.)[1] So what is logical inference, and how is it different from statistical inference? […]
Most of us grew up being taught pie chart statistics. In elementary school that’s how you probably learned about data and graphing. Proportions were taught by using a pie chart. This seemed relevant because it dealt with the practical problem of slicing a pie so five kids could share. Much else often is taught not […]
Do you follow ethical rules, or moral principles? How does human psychology play in? It is proven that appraisers’ opinions mostly match sale price (for loans). Justifications are: The price simply reflects an efficient market. The price lands inside Richard Ratcliffe’s “transaction zone”. (The principle here is that a real “most probable” value does not […]
[This is Part 3 of a series on Appraisal Modernization] “Appraisal modernization” is a crisp way to describe needed change. But what is really needed? To consider this question, in part 3, we must look at underlying motive. If we only look at the surface solution stuff, like “hybrid appraisals” we may be distracted from […]
A cobra farm raises and sells cobras to the government, whose objective is to control cobras in the wild. OK, lets try this again . . . Jeremy Bagott, MAI, AI-GRS was our guest speaker at the 2nd annual meeting of the Community of Asset Analysts – in Oakland on October 28, 2020. Jeremy just […]
We hear the word “technology” thrown around a lot. It’s a scare word. It gets attention. But what is it, and how does it affect our risk information industry? Technology can be defined as all the techniques, skills, methods, and processes used to produce a good or service or accomplish an objective, such as scientific […]
The legacy vs the upstart? What is the one single big difference? The traditional appraisal process is accepted. The Data Science viewpoint is new. (John Tukey predicted the impact of computer power on data analysis as an empirical science – in 1962.) Traditional appraisal has a proven legacy: It focuses on property analysis – leading […]
And what does cosmic cobra breeding have to do with valuation? (Part 1) Jeremy Bagott just sent me his new book.* It is about the joys of changing appraisal standards every couple of years. It’s about raising (then lowering) requirements for appraisers. And more. I’ve started to read the “Cobra”. Jeremy is an excellent writer, […]
