When I first decided appraisal might be a great career, a couple of things felt good. First, appraisers were respected, even admired. Respected for their special knowledge and professional impartiality. Second, there appeared to be a real need for impartial service. Service which wasn’t provided anywhere else. There was no licensing. It was based on reputation and designation. Letters like SRA, MAI, ASA, ARA, IFA, SRPA, SREA, RM, meant something to aspire to. There was a sense of value, of contribution, of intended excellence. The Appraisal of Real Estate impressed me. It seemed thorough, addressed multiple practical issues, emphasized care, and laid out a process for handling a difficult research question.
The research question accounted for the difficulties of gathering sales data, confirmation, and thinking processes needed to handle sparse, hidden, and even vague data. There was no internet, no printed “comps” sheets, no spreadsheet, no word processor. The MLS was wonderful. It came out every three months with actual sale prices and everything! Microfiche public records were soon a boon. A place to start. Whew!
The great news was that we had chapter meetings. We appraisers exchanged ideas and data. We needed each other, and received a sense of comradery, of belonging.
The next great news was that once you had 4 or 5 ‘comps’ you were almost done. The secretary/typist took care of most of the rest.
We were needed; and had what others didn’t. We had connections and data and method and a sense of ethical panache. It felt good.
What happened?
Over time, we no longer owned the data. Now we buy it. Over time our exalted judgment got replaced by a ‘show me’ world. Words I remember from my demo report writing class were “Explain, Justify, Support.” Form your opinion, then report support. It made sense. Show that your thinking is good.
Does this make sense today? We have complete data in most areas. Available in seconds. Confirmation then focused on key basics – like the sale price, motivation, and unusual conditions. It was important to extract deep, rich information for each of our illustrative comparable sales. It still is.
Verification is still important. But why do we pick 5 comps, and discard the rest of the directly competitive data? Why?
The world changed. We didn’t. “Trust me; I know a good comp when I see it.” Our literature, our education still insists: a good comparable is similar. A similar property is competitive. A competitive sale is comparable. Circular explanation. Trust me. Round and round. Competitive similar comparable.
But not one word, not one formula, not one algorithm, not one explanation of — what is a comp? Trust me. It doesn’t exist. Trust me. I know.
Greatness? We can be restored to greatness when we are respected for our analysis — not for our “trust me.” We will be respected when we stop discarding perfectly good, easily obtained data. We will be respected when we apply data science estimates, predictions, and results — in lieu of supporting our opinion. There is a difference.
Joe Lynch
April 19, 2017 @ 9:05 am
Hi George, appreciate the post. I had the opportunity to do a 1986 date of value recently and hunted down data in the old MLS books. I’m so happy not to work in that world…..
Gary Kristensen
April 20, 2017 @ 10:52 pm
From this day forward, it is only going to be appraisers first. We’re going to make appraisal great. It’s gonna be great. It’s gonna be absolutely fantastic. The AMCs will be out, total scumbags. They cannot beat us, couldn’t do it. Total losers.
George Dell
April 21, 2017 @ 4:12 pm
Gary, your earlier posts are much appreciated. It is not clear to me what you mean here. Perhaps just a bit of cynicism we all seem to have gotten behind feeling pushed around and into even catch22 situations.
Probably most here want to have things change. Perhaps we can provide the “how” this can be done, and “what” can be done. I believe there are many here who are willing to join in to a belief that s o m e t h I n g can be done. Each person who wishes to, can contribute in their own way.
My personal way is the potential to give appraisers new products and services to sell. Products that are much needed in the market. Products much needed for the economic good of our country and fellow humans. Products that are best provided by appraiser familiarity with markets, valuation techniques, training and education. What is missing is the application of modern technology. Broadly this is called “data science.” Simply put, it is a new valuation modeling paradigm, based on objective data selection, instead of the old “trust me, I know a good comp when I see a good comp.”
This belief is why I am putting time and resources into this place, this blog, speaking when possible, and providing learning in the necessary tools to push the profession forward. (Instead of being pushed into being homogenized and ‘minimalized’ by AVMs, BPOs, AMCs, accountants, financial advisors, economists and our clients, regulators, and others).
Micah Roy
May 11, 2017 @ 8:33 pm
I’m pretty sure Gary is channeling the POTUS in his tone.
Gary Kristensen
May 11, 2017 @ 11:38 pm
LOL George, there is no cynicism in my response, I’m just having fun with a Donald Trump impersonation since you used his slogan.
CIndy Harris
May 11, 2017 @ 7:57 am
George, Please teach your regression class in the Los Angeles area soon!!!!
g
May 12, 2017 @ 1:42 pm
Sorry Gary, and Micah!
I get it! (now)
I don’t know if POTUS thinks appraisers are great or not.