Think up an adjustment amount, and then support that amount. Interesting, the ‘support’ language we use for our work. Form an opinion, and then support it. Isn’t that backwards? Shouldn’t it be “calculate an estimate”, and then form an opinion? Develop an opinion. A dictionary defines develop: “elaborate or expand in detail,” as in “to […]
Support and prove your adjustments! Never mind that it’s not possible. Just do it! Do that, or face the wrath of being declared in “violation” of USPAP. So what, exactly, does USPAP say about adjustments for real estate appraisal? Well? Go look it up. You have a copy. Did you find what I found? Yep, […]
When I first decided appraisal might be a great career, a couple of things felt good. First, appraisers were respected, even admired. Respected for their special knowledge and professional impartiality. Second, there appeared to be a real need for impartial service. Service which wasn’t provided anywhere else. There was no licensing. It was based on […]
We are taught that a comp should be similar, then we make adjustment. Easy. There are three types of adjustment results. Some are exact, others are approximate, and others are biased but can help us get near the right adjustment number. It is important to understand the basic differences in these three different outcomes. We […]
Would today’s appraisal process pass the Daubert “checklist”? Daubert vs. Merrell Dow Pharmaceuticals (1993), a US Supreme Court case, basically says judges act as gatekeepers when it comes to allowing or disallowing expert testimony. Residential appraisers today face some of the issues, but with other types of “gatekeepers.” Our gatekeepers: underwriters, reviewers, opposing valuation experts […]
Are You Worthy of Belief? Is your work “believable”? Standards require work to be “credible.” My curiosity got me this time. I researched “get people to believe you.” As you might guess, what I found is unsettling. First of all, one of the pieces of advice was to actually tell the truth! Imagine. Also, back […]
Appraisal Myths, Fallacies, and Foibles, #1 is the first in a series. Hype vs Reality: Adjustments and Comps – is the title of my talk on August 4th, 2017, for the Northern California Chapter of the Appraisal Institute. In preparing for this talk, it came to me that much of our discussions revolve around how […]
We’re pleased to have my friend and long-time student assistant, Joseph Lynch from Sacramento, CA, write this week’s blog. He’s certified in residential appraisal, working in Northern California, and is President of the Sacramento Chapter of the Real Estate Appraisers Association. Check out Joe’s blog here. Thank you, George, for inviting me to pinch hit this […]
Stats, Graphs, Data, and now – Science. Why is science relevant? Isn’t good judgement important? Science is: “the systematic study of the structure and behavior of the physical and natural world through observation and experiment.” So how does this relate to valuation? First, we can get rid of a big chunk. Appraisers cannot do experiments. […]
We’re told to “support” our adjustments. We hear words like “prove” your adjustments. . . as if there were some magic formula which can give an exact, correct, and absolutely true number. It used to be so easy. . . Our trainer gave us a sheet with the “right” adjustments. Simple. USPAP Standards Rule 1-1 […]
We read articles and advertisements on how to prove an adjustment. Is this possible? How wonderful it would be. To prove an adjustment, just push a button and bam! Out comes the correct answer. How could we have we missed this? Of course, if such a simplistic and exact answer was possible – anyone could […]
Make an adjustment. Support it. What does USPAP say? Nothing. It’s not in the integrity standards. It’s not in the performance standards. What does the AI Dictionary of Real Estate Appraisal say? It doesn’t define it. However, it does explain the result of adjustments: “Mathematical changes made to market data to facilitate comparison of understanding.” […]
What is an adjustment? In a prior blog, we noted that no one seems to really know! We looked at the AI Dictionary of Real Estate Appraisal. We looked at The Appraisal of Real Estate (TARE). And we looked at the “Uniform” standards. All these sources tell us that adjustments are important and should be […]
Can we compare “statistical adjustment” methods to traditional appraisal adjustment practices? ‘Adjustment’ is mentioned only once in USPAP; (Standard 5 on mass appraisal). However, in The Appraisal of Real Estate, “adjust” comes up 687 times! It must be important. Surely, it’s clearly explained. In each use, the context is critical. It states: ‘Adjustment’ builds on […]
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 […]