Around 1986, licensing and education efforts started – in order to “help prevent another crisis” like the Savings and Loan meltdown of those mid-1980’s. Effectively, the standards of the professional appraisal organizations were adopted in a joint effort of those groups. Then the “congressionally authorized” non-profit Appraisal Foundation took over licensing as well as standards […]
Current efforts in the regulation of appraisal quality and fairness are fettered by obsolete appraisal methods. Traditional appraisal methods were designed to tackle sparse, subjective, non-electronic data. These vintage practices enable bias, hinder diversity initiatives, and conceal risk quantification. We have written about the “Five Frictions” hindering improvement in regulated appraisal valuation. Most other valuation […]
The three ways are: 1) pick using good judgment; 2) draw random sample; or, 3) use all relevant sales. Editor’s Note: This is part 2 of the series ‘Three Ways to Pick Comps‘. When I became an appraiser, good judgment ruled. Commercial data was not available, and the MLS comp book came out every three […]
Appraiser credibility continues to decay over time. Even during the great runup in prices, and now the spotty, often rapid rundown in prices – residential appraisers mostly turned a blind eye to the need for this critical “time adjustment.” Non-residential appraisers have yet to see the coming value shifts. Shamefully, a time adjustment, (or market […]
Everyone knows value. Of course! It’s easy! Value is what I can sell something for. Well, sorta. No, wait – value is what I am willing to pay for something. Editor’s Note: This is Part 2 of Market Value or Other Value. I have an apple. You want one. I threaten to take a bite […]
Market value, of course! Or is it? The great recession, and things like that, which come around every 12-15 years, all concur with the ‘accepted’ definition of market value, as written in the USPAP book Advisory Opinion 30. In short, the definition requires: Most probable price Competitive and open market Prudent and knowledgeable consumers No […]
Bias against minorities has been “proven” against property value message measurers – at least once. It has also been “proven” that the undervaluation is as much as $500, on average. Something must be done! Let’s blame the appraisers! They keep on “determining” values too low! Does the flurry of blame-placing help resolve the problem? But […]
Ah, this is easy – pick comps! This was pretty easy, compared to the many other things I had to learn. It was a little harder than making adjustments though. For adjustments, I had an adjustment sheet. I foolishly asked how the numbers were arrived at. The answer was “It comes from many years of […]
To regulate or improve something, you first measure it. The word credible appears in the most recent version of USPAP (©1999) some 276 times. The Uniform Standards of Professional Appraisal Practice as published from time to time by the Appraisal Foundation. The word credibility is used an additional 39 times, specifically as a measure of […]
Editor’s Note: This is Part 6 of the series on Neighborhood. We’re told we should analyze a neighborhood. This is mostly a residential concept. For non-residential appraisal the focus is often a “district” – a group of similar property uses. (Rather than a group of complementary uses.) In previous Analogue Blogs, we have looked at […]
Multiple regression works very well under some conditions. We ask: Are these conditions true in most real property valuations? This is actually a vast topic, so we can only reflect on some of the conditions or assumptions which are required for a multiple regression to be valid. Much (if not all) “advanced” appraiser education makes […]
Market, the word, is used over 2500 times in The Appraisal of Real Estate. And over 650 times in the current (2021-2024) version of USPAP. “Market” must matter! But what is it? “Market” has two main meanings which correspond to the definitions in The Dictionary of Real Estate Appraisal. One is a system to bring […]
Neighborhood” seems like an obvious choice for analysis. But is it? (Part 5 of a series.) The knee-jerk reaction to this question is that obviously we need it. It is a starting core of analysis. It’s what we were taught. It’s required for our license test. Leaving out a neighborhood section (form or narrative) would […]
Errors and mistakes can be “statistical.” They can be modeling Blunders. Or they can be of a third type: misjudging what the data is showing you. As we continue to grow the CAA (Community of Asset Analysts), we find that our body of useful algorithms and shared programs continues to deepen and widen. The accuracy […]
Evidence is shortly defined as “Something that shows proof.” It’s precisely defined in the law, and also addressed in philosophy and epistemology. Epistemology deals with methods, validity, and scope in the theory of knowledge. In the philosophy of science, evidence is what confirms (or not) your hypothesis. Evidence justifies belief, but only if respected. It […]
