Flag waving and appraisal.  Huh?

The Fourth of July is a day celebrating the anniversary of national independence.

Appraisers are supposed to be impartial, objective, and independent.

The new nation wanted independence from a King.

Appraisers are to be independent of all the other participants in the real estate deal:  buyer, seller, listing agent, selling agent, mortgage agent, lender, GSE– Government Sponsored Enterprises (like the FHA, VA, Farmer Mac) – and the multitude of state and other government regulatory agencies which combine legislative, administrative, and judicial functions all in one place.  Many, many “single-places.”

Each of these groups – participants in the financial processes – has different motives.  These motives are tribal in nature.  Benefits for the tribe, and for the individual in the tribe.  Tribal nationalism.

I have identified just three basic motives, which may apply to each of the above housing entities.

• Make the deal – the motive is money.
• Protect the bank – at least in the short run.
• Preserve the public good – short and long run.

So let’s look at just the public good aspect.  Patriotism is love of and pride in one’s country, usually with that motive of good public good.  Perhaps even the good of all humanity.  Nationalism is a more severe motive, which puts first “our tribe against your tribe” (country).  It could be called a more selfish form of public good!

So how does appraisal work into this?  Our appraiser tribe is smaller.  We ask: when is an appraiser’s attitude patriotic, and when might it be nationalistic?  And how does independence play into this?

The ultimate appraisal public good – our independence, and freedom from our little  kings – is that the valuation process is fair, and shows true value on a given date.  So what is “true value”?  We have been taught, and we must comply with the king’s proclamation: that value is price.  The actual price, or “most probable price.”  Aha!  The king has spoken.

But there is no true price – only a probability.

That is our starting point for the future!  We can serve our country better in the future — by answering the question: How probable, how reliable is our result, our opinion?

Appraisal patriotism seems a good thing: attention to independence from influences which will detract from being objective and impartial.  Our standards combine the three concepts:  Impartial, independent, and objective.  May we add the word:  “reliable”?

Appraisal nationalism may be suspect.  It would tolerate tribal influence.  Influence which may harm the overall public good.  Good results are reliable.  Credibility (believability) requires good salesmanship!

Let us celebrate that we do have the tools to be objective.  We have technical methods to impartiality.  Independence must come from the regulators and controllers.  Who are they?  And what tribe are they?

Is the “controller” tribe impartial and objective?

The Community of Asset Analysts: We measure markets, not compare comps. Start your journey to the CAA with Stats, Graphs, and Data Science 1. Details at Valuemetrics.Info.