Misused terms: AI (Artificial Intelligence), ML (Machine Learning), makes you look smart. It makes for clever marketing. And it may be BS. The most important “algorithm” for valuers is A+B=C. Words are important. They help us understand each other and avoid wars. Marketers, in particular, tend to bandy about clever words, designed to impress you […]
I was curious about what is “critical race theory”. I didn’t understand what it was about. The Sunday paper article – yes, I still read the morning newspaper every morning . . . seemed to summarize CRT and the oblong political football it seems to have become. Why critical? Why Theory? And what does this […]
Once upon a time, appraisers did not give an opinion! They provided estimates. Why the change? It seemed appraisers were getting sued over their estimates of value, which opened the door to attack on how the analysis was done. An estimate comes from an analysis. The professional response: “We will just deliver an opinion!” Safe! […]
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 […]
Reform? What is the real problem? We know of meltdowns. We hear of bias. And we see the “American Dream” may be just a dream. So what about government? Why? And what part might appraisals play in these issues? More importantly, what keeps us from implementing solutions? Can government agencies (such as FFIEC and the […]
Modernized Appraisal is a necessary part of coming lending regulation. Some think old methods are just fine. Others think advanced quantitative methods are necessary. What to do? Most of us started out learning about things like median, mean, maximum, minimum, and even standard deviation. “Descriptive statistics” they called it. Our teachers also showed us pretty […]
Everyone knows what’s a market — (or do they)? Market Value is the ultimate goal of appraisals, of AVMs, of evaluations, of BPOs, hybrids, exceptions, and all forms of opinions (everyone has one). So, market value must be based on “the market”! To measure it, we must first know what it is. The dictionary has […]
Obsolete! Such a harsh word. Can it be? Is the problem convolution? Does it mean I will soon be obsolete? Not needed? Not loved? Terrible. What can be done? Yet all the little signs are pointing that way. “Automated” valuation models have much of the market, and continue to gain. Other valuation methods and appraisal […]
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 […]
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 […]
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. […]
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 […]
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 […]
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, […]
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 […]