It’s not me, I’m not biased! Is it me, the model, or the data? A great problem with legacy appraisal is that bias is about personal bias, rather than analytical bias. USPAP (Uniform Standards of Professional Appraisal Practice) only addresses human bias. Similarly, The Appraisal of Real Estate by the Appraisal Institute only addresses analytical […]
Bias, We Got it Handled? We got standards, we got smarts. And we have issues . . . This is the second of a series asking questions and seeking answers about bias in valuation. Part One is here. President Biden proposed to “establish a national standard for housing appraisals.” The purpose is to ensure adequate […]
In this time of New Year’s resolutions, bias has been much in our consciousness. Bias Pt 3. As a new appraiser, I knew little about bias. I did know that appraisers were expected to be unbiased in their opinions. It seemed simple. Be fair, and don’t let anyone bribe you to give the ‘value’ they […]
Opinion is the required end product of appraisal, mandated by the quasi-governmental regulations. By “appraisal waiver” exception, analytic results may be allowed. (No opinion is necessary.) modernized Editor’s Note: This post is an intersection of Appraisal Modernization, Part 6 and Bias Part 5 The FHFA (Federal Housing Finance Agency) wants input on: Appraisal modernization; Data […]
A great deal of economic, social, and political talk has been around affordability of housing. To explore this topic, it may be helpful to ask some questions. Good policy starts with the right questions. In simplest terms, some people have the resources to have nice homes in nice neighborhoods, others have just tolerable homes for […]
Is it possible discussions about bias are biased? Oh no! Surely personal motive cannot affect my position on bias. Can it? Editor’s Note: This is another intersection of Modernization (Part IX) and Bias (Part 6). It is difficult being a word nerd right now. Particularly writing about bias. This is a topic which is much […]
Legacy appraisal practice “the valuation process” is well established. Therein lies the problem. It is not designed to use modern methods toward objective, unbiased results. First, lets distinguish the different kinds of bias. We need to separate personal bias from analytic bias. Personal bias can be intentional, or unintentional (unconscious). Analytic bias itself can come […]
Is there bias in the American Dream? Do we need a “loan conditions” adjustment? Read this series here. Loan conditions have nothing to do with ‘financing’ adjustments as we know them! One is local. The other is global. So how might loan conditions affect “market value”? Financing conditions are often related to motivation in sale […]
Could the very definition of market value hold bias? Let’s look. First, we need to figure out what types of bias there might be. There are two major categories: 1) analytical bias; and 2) human bias. And there may be some overlap! Analytical bias generally comes from two places: Error in data selection; Error in […]
USPAP (Uniform Standards of Professional Appraisal Practice) ethics rule specifically states that “An appraiser must not perform an assignment with bias.” It defines Bias as “a preference or inclination that precludes an appraiser’s impartiality, independence, or objectivity in an assignment.” As we noted in a prior Analogue Blog, there are two types of bias: personal […]
Appraisal standards and regulations are mostly designed to discourage personal bias. But what about traditional appraisal practice? To understand this question, we must separate personal bias from analytic bias. Personal bias can be open, declared prejudice – or it may grow from basic human instinct – towards those who look like us. This basic tribal […]
Picking comparable sales is critical. Selecting the ‘best’ four or five ‘comps’ requires experience and training. Appraisal education tells us a good comparable is competitive, similar, and able to be compared. Customary training and practical experience generally focus on analysis and presentation of three to six comparables. Unfortunately, this is NOT what is required by […]
Are valuation procedures a set up for bias failure? Let’s look to see what systemic issues there may be regarding bias in valuation. This is an enigma of multiple overlapping issues. Let’s connect the “established” appraisal practice of USPAP (Uniform Standards of Professional Appraisal Practice), the established body of knowledge (EBOK), and human behavior reality. […]
The 1004MC “market conditions” appraisal addendum was created by Fannie Mae and Freddie Mac to require a form-based market analysis. This added to the traditional practice to collect a handful of ‘comps’ to opine and foretell market price. There are problems and unintended consequences. The ANSI requirement is that residential appraisers measure houses according to […]
Bias is a much used and misused word. Variance too has more than one meaning. Words rule. Words trigger our thoughts, our feelings, and our opinions. Bias itself can mean different things. It can mean different things to different people. And it can mean different things to the same person, depending on context. Bias can […]