Probably the most probable definition (of value) in use in the U.S., is used for “federally related transactions.” The underlying assumptions assume “normal” or “typical” conditions. The “most probable price.”
“Most probable” presumes you can attach certain levels of possibility to different values – then just pick the one value which is the “highest” probability. Or, the highest and best value. Easy.
Sounds like we have some mathematical, statistical, probabilistic, approximative, estimative way. Math. Darn.
Too complicated they say. “The data just is too unsure.” It can’t be done! We must just use our judgment. Be believable. Be credible. Show our expert ability to be “worthy of belief.” Believe my opinion. I am worthy.
And the world wants more. Appraisal consumers don’t really care. They want more. Higher. Everybody wants higher. (Except those who want lower.)
Appraisers are mini-loan-underwriters: Why call it $545,000, when $550,000 makes the deal for everyone! Everyone! Everyone is happy. Isn’t happiness a good goal? Probably.
And besides, $550,000 is just as worthy of belief as $545,000. In fact, everyone involved feels it is more believable than the actual, “most probable” number.
This fiction — “most probable” — is the death knell of professional opinion. Share-of-the-market for ‘pure’ appraisal opinions has declined, and may soon go to zero. Results, not “support.”
This fake, most-probable opinion, is only a small part of what users actually need. Only a small part of what is needed for the public trust to truly be served. (Like to stop market crashes every 15 years.)
What can be done? Appraisers can provide more, for sure.
This word, “probability” needs to be explicitly handled!
Today, we have “technology.” We have tech of different types: Internet, data, analytics, econometrics, AI, visualization, brain-machine interface. And we have accurate data collection and wrangling methods. Ways to measure differences, associations, and ordinal measures. Ways to see things, like market structures. See them. See human forces. See connections. Connections like beliefs (including the influence of fake beliefs). Like “unsupported” beliefs. Connect to the brain.
Human intelligence interacting with artificial intelligence. The use of judgment, of ethics, of knowledge.
Algorithms alone will not do it. Opinion alone will not do it.
In coming issues, we will continue to show the interaction of expert experience, intelligence, and process technologies. We present how today’s appraiser can become the highly-paid asset analyst.
Quitters will quit.
Winners will learn.
The CAA and Valuemetrics.info provide the learning and the community.
January 27, 2026 @ 11:30 am
I’ve written about this before, and while it is true that mortgage lending is based on “most probable price,” mortgage lending is the ONLY space where this term is actually used. The definition of market value or fair market value is based on intended use, so anything besides a federally-related transaction likely requires a different market value definition . . I’m talking about eminent domain, civil litigation, estate, divorce, casualty loss, property taxation, etc. And none of those use the term “most probable price.” Most probable conjures up probability distributions and the like, which were promoted by the esteemed Richard Ratcliff decades ago. This article of mine was published in The Appraisal Journal back in 2018, and it is a good read for anyone interested in the history of market value definitions, and current conundrum with multiple definitions in common use:
https://static1.squarespace.com/static/64ff4c87e29e7059fecf5d45/t/6503505b7638367c4aeb8aa7/1694715995319/Market+Value-+What+Does+It+Really+Mean%3F+%282018+Swango+Award%29.pdf
January 27, 2026 @ 4:55 pm
I learn so much from you George Dell and all those sharing their expertise and comments every week. I sure wish I knew about you a long time ago! PS- I am printing out and reading Michael V Sanders article about the history of market value definitions. Thanks for sharing.