What is “Modernizing”? What is “Appraisal”? This is the first in a blog-series to look at “modernization” from the viewpoint of the appraiser analyst, and not the view of the client-user report. In the valuation world, the word “modernizing” has been commandeered by the GSE’s (FannieMae and FreddieMac) who give it a particular meaning. Primarily, […]
Appraisal is the process, not the report. While the quasi-governmental agencies (the Government Sponsored Entities FannieMae and FreddieMac) are the dominating (monopolistic?) entities, they cannot and should not dictate how analysis and value opinion is done. We start this multi-part series by looking at how we got here – our legacy. This includes our history, […]
This is Part Two of a multi-part series on Modernizing Appraisal. Read more here. Issue #1: “Modernizing Appraisal” can mean different things to different patrons and different “authorities.” An appraisal is defined as an opinion of value, provided by a licensed appraiser. An appraisal report is the delivery mechanism (paper or electronic). Unfortunately, the entire […]
Why is modernizing necessary? This Modernizing Appraisal series is about the analysis process, not the reporting revisions –(New URAR, UAD3.6). We step through: scope, data, and ”adjustments.” It sets today’s path to competence, using data science with artificial intelligence. […]
With modernized methods, appraisers can gain respect, income, and provide a genuine public service. This Modernizing Appraisal series is about the analysis process, not the reporting revisions –(New URAR, UAD3.6). We step through: scope, data, and ”adjustments.” It sets today’s path to competence, using data science with artificial intelligence. […]
Artificial Intelligence (Ai) applications need data science! This Modernizing Appraisal series is about the analysis process, not the reporting revisions –(New URAR, UAD3.6). We step through: scope, data, and ”adjustments.” It sets today’s path to competence, using data science with artificial intelligence. […]
Is traditional appraisal theory different from modern analytics theory? This Modernizing Appraisal series is about the analysis process, not FannieMae and FreddieMac reporting requirements. The process is identical: 1) The problem; 2) The data; 3) Predict or adjust; 4) Communicate. We continue here on #1 – defining the problem to be solved. Read the earlier parts […]
Intelligence is “the ability to acquire and apply knowledge and skills.” For valuation and risk decisions, we have three relevancies: Human intelligence applies research, market knowledge, and proper methodology skills. Artificial intelligence (Ai) follows instructions and context provided by the analyst. Human art – is an expression of ideas, intuition, and skill. This Modernizing Appraisal series is […]
There are several appraisal standards. One, which is financed through appraiser licensing fees is called USPAP – Uniform Standards of Professional Appraisal Practice. In theory, USPAP is for “federally related transactions.” This Modernizing Appraisal series is about the analysis process, not FannieMae and FreddieMac reporting requirements. The process is identical: 1) The problem; 2) The data; 3) Predict or adjust; 4) Communicate. We continue here on #1 – […]
Modernize comps? Silly do. Everybody knows what’s a good comp! Or do they? This simple claim forms the major dividing line between the old way, and the new way – the legacy “trust me” appraisal paradigm – and all other forms of valuation and risk assessment. This Modernizing Appraisal series is about the analysis process, not FannieMae and FreddieMac reporting requirements. […]
Will new regulations modernize AVMs? Will they equalize the large administrative regulatory cost burden of real appraisals? And who is subject to the “new rule”? Is it the AVM vendors and developers, or others (like banks) who use the output to make loans? This Modernizing Appraisal series is about the analysis process, not FannieMae and FreddieMac reporting requirements. The process is […]
This is silly – modernize value . . . Everybody knows what value is. Even if we have several different definitions of the word. It’s market price. Easy. No need to explore. Or is there? This Modernizing Appraisal series is about the analysis process, not FannieMae and FreddieMac reporting requirements. The process is identical: 1) The problem; 2) The data; 3) Predict or adjust; 4) Communicate. We continue […]
Bank lending risk comprises borrower credit and liquidity, and those related to the interest rate, operational, business) issues, and market reversal. Market (trend) problems typically only become important when other risks trigger foreclosures. But trend declines can trigger the other four main risks. Market risk is now the highest it has been in many years. […]
Artificial intelligence (“Ai”) does things which mimic human intelligence. This includes learning, problem-solving, reasoning, and making decisions. These Ai systems use huge (or restricted) data to find patterns and make predictions. These are also the construct of data science. How does this relate to appraisal? This Modernizing Appraisal series is about the analysis process, not FannieMae and FreddieMac reporting requirements. The […]
Modernize What ?!!! This is the last of this “modernize” series! Out with the old! In with the new! Modernize! The GSEs (Government Sponsored Enterprises – FannieMae and FreddieMac) adopted the “modernize” word. This in relation to their new data requirement electronic form. Which is now called generically the “UAD” (“Uniform Appraisal Dataset”) which is […]