Comparable selection is fundamental. In the traditional “valuation process,” first the “relevant characteristics of the property” are identified. Then in the “data collection” step, “Comparable Property Data” is collected. The subject is depicted by relevant characteristics (predictor variables), and comparables are chosen to fit that depiction. In the traditional procedure, these are called “elements of […]
We asked about comp selection in a “big data” world. Why do we still use three comps on a form, or six comps on a spreadsheet? What is the right data? It has been claimed that three comparables was used because they fit on an 8 ½” by 11” sheet of paper. For commercial work, […]
Daddy, how do You pick comps? We asked about comp selection in today’s “big data” world. We considered why we used three comps on a form, or put six comps on an accountant’s spreadsheet. But what are the different ways appraisers use to pick comps? We can use “good judgment” to pick comps. Or we […]
Actually, they are not new. The economics are not new. The designated three alternatives — cost, income and comparison — approaches remain valid. What is new are today’s technologies. The ones important to us are: 1) the extensive and complete data bases of market data, 2) computation power and algorithms, 3) interactive brain-machine interface. The new […]
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 […]
An email subscriber’s question: Sent by Alfred O. How do we make the appraisal profession great again? We know WHY we do this. Appraisal means something to us. We have something to give. We’re here because we care about this profession and believe it’s the best answer to what our society needs. Appraisers have the […]
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 […]
My friend, David Braun, points out in his book, The Valuation Analyst, that scope creep has turned into scope running. I’m sure many appraisers, particularly residential people will agree. He points out that as the reviewers ask for more, appraisers are finding ways to not be specific. This has turned into a self-perpetuating loop: “As […]
Quiz: How many comps are “just right?” First we must ask: What is a comparable? We can take two attitudes: 1) “I know a good comp when I see it!” or; 2) What does our accepted literature say? The Appraisal of Real Estate says . . . “The data used for comparison … should come […]
Every profession I know that deals with numbers also provides some estimate of the reliability of the result. An engineer would not say “the most probable life of this bridge is 87 years.” The engineer might provide a minimum, or a range, or some indication of how reliable the estimated life is. My new journal […]
In an earlier post we noted that the ideal comparable data set is the complete CMS, the Competitive Market Segment(c) , not just three comps. Some readers disagreed, believing that three comps is enough. A primary reason for the use of all sales which competed directly with the subject property is that it improves the […]
For the Stats, Graphs, and Data Science1 class, we are often asked if the material is oriented to residential or commercial property. The question itself assumes that the property type defines the logic of analysis. Data science is the science of data. The class itself is about methodology, technology, and cognitology. Whew! The question about […]
Yes. Appraisal as we know it is dying. Can it be saved? No. So what should I do? What should “we” do? To answer these questions, we need to look at causes and conditions. Some of these are obvious. Judgment is good; Analysis is better. Human generalization is excellent; Computation is fast. Good comps are […]
Our education tells us a comp is similar and competitive. So how do we measure “comparability”? If our job entails studying market data to get an answer … might it be important to know exactly how to describe a comp? In researching the literature, including journal articles, I find little help. Only two or three […]