We know there is science in art. Musical scales. Perspective and the golden ratio. The ordered sequence of a good novel. It’s difficult to be a good artist without knowing, or at least intuitively applying the truths found in the logic.
Both science and art reflect our search for the truth. Our primal human nature is to resist the truth, even as it hits us in the groin. Resist the change. Fear. Give up something that has protected you. Something that gives you a place. A belonging. A prestige. An ego. A place where you are respected.
Then someone or something comes along and says there is a better way. I resist. The old way is good. It is proven. My peers do it. My teachers still do it. My tribe still teaches it. It cannot be wrong. How can it be wrong?
Dissonance. What we have is a conflict between our basic needs and higher needs of self-actualization. One side demands safety, food, physical needs, and perhaps our need to belong and feel loved and be esteemed by ourselves and others. The other side pushes us on to what Maslow called self-actualization self-fulfillment—achieving full potential, including things of a creative nature.
One side of us argues that we know the truth, our path, our righteousness. The other side bothers us with irritating new questions, new truths. Worst of all, some of those new truths are of science. Data. Computation. Programs. Algorithms. Software. Dashboards.
Yet we see some ‘science’ as lies. Magical software promising to ‘prove’ adjustments. “We are a technology-based company.” We have ‘proven’ with a nationwide “statistically significant” research which shows that homes with high-pitched roofs sell for less than homes with flattish roofs. In fact, the steeper the roof, the lower the price! Proven. Scientific. See how smart we are.
What’s wrong with this picture? How can this be? Steep roofs cost more, take more lumber, and more nails. This is scientific fact! How can this be?
This can be because of one fact. Science takes art.
The art of science is the question. The art of science is the model. The art of science is recognized in science. It has a name. It’s a form of reasoning.
There are three types of scientific reasoning: deductive, inductive, and abductive.
- Deductive reasoning is the simplest. If ‘A’ is true, then ‘B’ must be true.
- Inductive reasoning is less comfortable: If ‘A’ is true, then ‘B’ is likely to be true. Probably true. Now the new question is: “And how probable is it that it’s true?” In fact, the probability is all that is important. The truth becomes an assumption, a hypothesis, a belief I would like to convince you of. But all I have is a probability.
- Abductive reasoning is even better. It is the essence of the art of science. It’s the expert’s or the amateur’s reasoned assurance that a question is worth asking.
When I was a brand-new appraiser trainee, I was assigned a house appraisal. I was slow. I wanted to be diligent. I spent a day poring through MLS books. Photocopying. Underlining. Guessing key features for “similarity.” It was a house.
Then I went out in the field, clutching my bank of ‘comps.” I looked at the subject. It was a house. But it was not a house. It looked like a house. But the yard was paved over. It had parking stripes. And over the door—a sign. An ominous sign. A sign from the universe: “Fortune Teller Tells All.”
The sign told me was my hypothesis was wrong. It wasn’t a house. It was a retail property. My abductive reasoning worked a hundred times. But not this time.
Abductive reasoning was my ‘best guess’ given what I knew before I started actual research. My hypothesis was false.
But I came closer to the truth. True science is joy in finding an untruth.
And accepting an untruth about my prior comfort zone is called “growing up.” Things change. Technology intrudes. Discomfort ensues. We can only find comfort and safety and belonging and art by asking the right question. Grow up.
What can I do? What can my profession do? Change happened. Have I? Have we?
Scott J
April 11, 2019 @ 8:35 am
I’m tempted to ask (sardonically) what the Fortune Teller said.
A lot of people expect appraisers to be fortune tellers. “What will my house be worth in 2 years?” or worse, “How can my house be worth so little today?!? An appraiser told me it was worth more 3 years ago!”
Relocation companies want projections modified by likely and foreseeable outcomes of current events — a combination of those inductive and abductive reasonings.
Too many lenders want a number and few red flags — sort of like many people going to see fortune tellers — also, sort of like mis-applied inductive reasoning. “If the house is worth the contract price, then we must find this and that evidence (and ignore or minimize facts that we stumbled across to the contrary).”
mhlappraisal
April 11, 2019 @ 3:03 pm
One of the most valuable aspects of using residential appraisers is the inspection, research and analysis performed by a single human. Not sure if many residential buy, sell, rent or remodel decisions are made on the product of an algorithim, maybe a lot but when risk of an incorrect real estate decision is perceived as high, might want to get at least one appraisal. What about highest and best use – shouldn’t there be robust analysis and reporting? How about the new hybrid appraisal process where the fundamental human experience is segmented so that the trained, experienced and passionate appraiser is deprived of the some of the most important part of process – site visit! In my book it helps to be there to explain why there is no or how much there….is…there.
BenH
April 12, 2019 @ 8:51 am
Wow George, this seems to be a little weird coming from you. From what I’ve read before, I thought you were the 100% big data and statistics guy? What you said in this article makes a lot of intuitive sense to me. I always worry about over analyzing and attempting to extrapolate too much information from a sale. The problem with using big data on sets of sales comps is that the only real “objective” piece of information from the comparable sale is the Sales Price and maybe the sales date. But comps shouldn’t just be a collection of Sales price info either.
The only critique I have of using mass data and statistics is that by definition we don’t have the “inside story” on each comp in the data set. If I appraise a local property and for all the comparable sales used, I know the commercial buyers in the area, know the lease rates of the properties, know the tenants, know the history of the comparable property over time, I get a much wider perspective. I know the investment criteria of the big buyers in the area, know what they own, and if they are likely to buy my subject, I can “know” my comps at a much deeper level.
This is better than just choosing random comps that hit my number for sure. Which I think has been your running critique of typical appraisal theory. It also may be better or another factor to consider instead of just inputing all of the MLS data into a computer and running statistics based on the “sale price” only. Besides a deep data set, what about a deep knowledge of each comp I choose?