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 […]
Things become obsolete because they fail to keep up. USPAP (Uniform Standards of Professional Appraisal Practice) has served us well. And things have changed. And times have changed. Appraisal standards go back quite a ways, primarily by the forerunners of today’s Appraisal Institute. Also, assessor groups sought and created standards or procedures for mass appraisal […]
The future is here now. How can an average appraiser prepare? Some practical views. There are a lot of questions here. How are things changing? Will my knowledge be of any value? Is there any hope at all? Will clients require something different? If I am to survive, what do I need to do different […]
An appraiser must be worthy. You must be believable. Your work must be credible. That’s what it says in USPAP (Uniform Standards of Professional Appraisal Practice). Note that the source is the Appraisal Foundation—declared therein to be “the nation’s foremost authority on the valuation profession.” It uses the word “credible” 82 times in the Standards […]
Statistics for appraisers started to become a hot topic some 15+ years ago. I was more involved with the Appraisal Institute then, and often argued that with the changes in data sources—appraisers would have to learn to apply statistics. Around 2003, the AQB (Appraiser Qualifications Board) revised qualifying education to include the requirement for Finance, […]
Graphs serve several purposes. There are two main mindsets in building graphs. One of them seems completely ignored in traditional appraisal ‘procedures.’ The old way of appraisal is to gather 4 or 5 comparables. They are “competitive” and “similar”. We are told that if they are competitive and similar, they make ‘ok’ comps. Ok comps […]
