Recent GSE (Fannie Mae and Freddie Mac) guidelines for appraisers and lenders make some assumptions. In particular we can use, for example, the requirements for market analysis and time adjustments. This is part 4 on our series on GSE Guidelines. Read the series here. USPAP (Uniform Standards of Professional Practice) Rule 1-4 states that an […]
A time adjustment is needed because all our sales data is historical. A sale price 6 months ago cannot be properly reflected in today’s dollars. Two parts. Two components. Two reasons: The value of the dollar has changed. The competing market price level has changed. Editor’s Note: This blog is part 3 on the GSE […]
Recently, Keith Wolf (representing Freddie Mac), coined a new term for claims about adjustments, calling it the “adjustment fallacy.” Adjustments to comparables first arrived on the scene as a way of explaining differences between the subject property and a compared comp. (A way to ‘support’ an opinion comparison.) In theory, an adjustment is supposed to […]
Should the AI (Appraisal Institute) teach AI (Artificial Intelligence)? This is Part 2 on the Series of the Appraisal Institute and Artificial Intelligence. Read Part 1 here. AI tools, such as ChatGPT, depend on prior knowledge being published somewhere out there in the cloud. Somewhere. The AI (the education provider) continues to emphasize the supremacy […]
The new UAD and URAR come on together. In this second part of our series on UAD and URAR as we prepare to look at possible unintended consequences. (Catch up and read part 1 here.) In later continuing parts, we will look at how the URAR/UAD format “dynamic” may affect users: appraisers, lenders, AMCs, and […]
The upcoming UAD (Uniform Appraisal Dataset) was part of my presentation at the CRN (Collateral Risk Network) meeting at an appraiser conference in Las Vegas. The CRN panel was from a workgroup. That workgroup effort is for lender and AMC “readiness” for appraisal acquisition (ordering). This UAD topic is intertwined with the new integrated URAR […]
Around every corner, someone wants appraiser’s to buy their technology. We get techhype – buy our wonderful . . . “Prove your adjustments.” “Bulletproof your reports.” Technology of computers and especially software. “Buy our most clever delivery product.” We started with electric typewriters and adding machines. Then calculators (like the hp12c) and fast dot-matrix printers. […]
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 […]
