Cognitive dissonance is the mental stress we feel when we’re confronted with conflicting beliefs and requirements.  How could this possibly be a USPAP issue?

USPAP, (Uniform Standards of Professional Appraisal Practice) may cause psychological dissonance in appraisers – because the review standards and practice standards have different requirements!

For the appraiser, Standard 1-2(h) requires results to comply with the Scope of Work Rule.  The test of acceptability is:

• Do what intended users expect; and
• Do what appraiser peers would do.

Simple. No Dissonance.

So, what about appraisal review methods?  In Standard 3, the reviewer is to “develop an opinion as to the completeness, accuracy, adequacy, relevance, and reasonableness in the work under review.”

Each of these five criteria are wholly subjective.  However, we can look at the elements:

Completeness – having everything needed.  This must be in the context of the “context of the requirements applicable.” Credibility (worthy of belief) is always the test.

Accuracy is a bit trickier.  Appraisal deals with numbers or opinions of numbers or estimates of numbers or categories.  Simple.  So, what is accuracy?  Accuracy is the quality of being true, correct, or exact.

In order to form an opinion, to compare — a reviewer must know the true, correct, or exact number. Do reviewers have magical powers of true knowledge?  Or do they have to form their own opinion –a number to compare to?  And how close does the appraiser opinion have to be to the reviewer opinion – for it to be sufficiently close to be accurate?

Alternately, how far off does the appraiser opinion have to be from the reviewer secret true number?

Adequacy – sufficient for a particular purpose.  Again, context is the issue.  It appears that adequacy depends on completeness, and accuracy.  “How close is close enough?”  “How complete is adequate enough?”  Many clients, especially in the world of collateral or litigation, only judge adequacy on the basis of making the deal or winning their case.

Relevance – “connected with the matter at hand” is a colloquial meaning.  In the world of data, and analysis, it means the information is applicable to estimate the result.  Some data is helpful, some is not. (GIGO – garbage in garbage out).  Where is the line to determine “relevant”?

But there is another “relevant” relevant to appraisal.  Does the result answer the question asked?  (If we assume an unbiased result is truly wanted.)  Again, we are faced with the problem that the reviewer must have their own opinion of what is relevant and what is not.  Perplexing!

Reasonableness – finally!  Let’s be reasonable.  “Able to be reasoned with.”  Alternately, this word might mean “within a reasonable range of my opinion.”  Again, the “reviewer” must first have an opinion to test against for “reasonableness”!

So, what do clients expect?  And what does everybody do?

Do that!