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Early in my career, there was no “Scope of Work” part in the appraisal standards.  The appraisers that trained me, however, did tell me it was good to figure out the problem, the property, and the perspective needed.  My academic history told me: oh – yea!  Kinda like a hypothesis!

Editor’s Note: This is a part of a series on Appraisal Intelligence. Read the entire series here.

A hypothesis:

  • I need a value.
  • It’s a house.
    • The client told me so.
    • I looked. Yep, it’s a house.
  • It competes with other houses on the market.
  • Therefore, probably it will sell at a price like other sold houses.
  • AHA! All those hard micro-economics classes may finally pay off after all!

My historical work problem:

  • The sold houses must be similar and competitive.
  • The data is hard to gather, found only in MLS books that are months old.
  • I have only a few sales. They are not exactly similar. They are from the past.
  • And, the value of the dollar has gone down, AND the mix of buyer/seller motives has changed!

Solution scope:

  • Find some similar sales: “a sample”–  cause that’s “enough,” and what the form requires, and what everybody does, and what lenders expect.
  • Come to a value conclusion – my credible opinion.
  • “Explain, justify, and support” that conclusion opinion.

But Wait!  I have Standards!

I have to comply with the Standards!  What do they say?  1) I’ve identified the problem;  2) I’ve done the scope, credibly! and;  3) the client knows about the form.

And:  I am prepared to demonstrate sufficiently a believable (credible) point value.  I don’t need to do it – just be prepared to!

But wait!  I have to add:  The lender-client, the intended use for a loan, the definition of market value (dictated by the lender-hierarchy), the subject address and stuff, and assumptions.

And above all:

  1. I must do what these clients expect (not “desire” – but what they expect)!
  2. Do what all my peers do: pick 3 comps, adjust.
  3. Make sure things “appear relevant.”

The then-new Scope Of Work was written some 45 years ago.  It may be time to see how today’s process technology (data, analytics, visualization, and delivery) — demand an updated Scope of Work.

Is it enough to adapt technology to the old scope of work standards? Or should the Scope of Work section be caught up to today’s AI accelerated intelligence appraisal?

New tech -> Changed Scope