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 […]
Editor’s Note: This is Part 3 of the series on Excess of Appraisers and how this cyclical phenomenon is affected by the five frictions of modernization. The emerging excess of appraisers is inevitable and recurring. We have questioned the first two of the five frictions on modernization: practices, standards, education, regulation and client expectation. In this […]
Some form of Universal Valuation Standards (UVS)© appears to be one way to resolve the multiple issues we see today. Our most recent series focused on the obsolescence of the traditional appraisal process. The primary cause of the obsolescence is the shift from subjective onesey-threesy methods of picking comps – to immediate electronic download of […]
Appraisers have standards. AVMs have no standards. Other valuation types are “waivered” or exempt. Appraisers have licenses. AVMs have no licenses. Other valuation types are “waivered” or exempt. Appraiser’s foot the bill for much of the valuation world – reviewers, evaluators, programmers, checklist checkers, and unlicensed “valuation analysts.” Today we have unequal regulation, costs, taxes, […]
This post starts the last in our series on the “five frictions” of valuation reform. The question we ask : Is there a simple single solution to our convoluted regulation of a simple product? We have considered that government regulation is a significant friction — holding back scientific and practical progress. We identified the only […]
Government regulations should serve the public trust. How can this not work? Being government is not easy. There are always trade-offs. Sometimes, new regulations can solve problems; at other times they can embed old problems, or beget unintended consequences. Government regulations, by their very nature, can bog down progress. Regulations follow some general principles regarding […]
You’d think client/user expectation would follow wise professional leadership. Hah! Innovation and leadership in knowledge and education has declined. The profession and its key organizations have long lost their default position. Pride in designations are diminished. Replaced by licensing, outdated appraisal processes, echoed education, and octopus-like regulation. These are built upon subjective, belief-based ‘credibility’ standards. […]
Obsolete — Standards?! This is third in a series, as we look at this question from the viewpoints five forces of friction: process, standards, education, client expectation, and regulation. This issue is about valuation standards. We will end with part 7: the mystery solution. In the United States, the predominant standards are USPAP (Uniform Standards […]
Process: Current appraisal practices are controlled by the quirks of each ‘valuation’ industry: appraisal by obsolete assumptions of data difficulty, AVM ‘automated’ models by industrial secrecy, and other non-appraiser products which are under-regulated or over-regulated — depending on original intent. In order to fully consider the place of appraisal—we have to look at the entire […]