USPAP requires that an appraisal is an opinion. EBV yields an analytic result. Editor’s Note: This is part IIIb of George Dell’s series on How Do I Move to EBV? Links to the earlier posts are here. USPAP (Uniform Standards of Professional Practice) is promulgated by the Appraisal Foundation, publisher of the irregularly issued rules, […]
The three ways are: 1) pick using good judgment; 2) draw random sample; or, 3) use all relevant sales. Editor’s Note: This is part 2 of the series ‘Three Ways to Pick Comps‘. When I became an appraiser, good judgment ruled. Commercial data was not available, and the MLS comp book came out every three […]
Ah, this is easy – pick comps! This was pretty easy, compared to the many other things I had to learn. It was a little harder than making adjustments though. For adjustments, I had an adjustment sheet. I foolishly asked how the numbers were arrived at. The answer was “It comes from many years of […]
How many comps should I use? What do “authorities” say? Historical appraisal practice, as passed on from trainer to trainee, in the outdated master/apprentice model that imposed strong inviolable dictates. For residential forms, the magic number was three, sometimes up to five or six. Three and a subject column fit perfectly on a 8 1/2 […]
Reform? What is the real problem? We know of meltdowns. We hear of bias. And we see the “American Dream” may be just a dream. So what about government? Why? And what part might appraisals play in these issues? More importantly, what keeps us from implementing solutions? Can government agencies (such as FFIEC and the […]
Graphs for analysts and appraisers are how we see. It is difficult to vision a median or clusters or market relationships using just numbers. It is even blurrier when someone uses p-values, R-squared’s, and t-scores, claiming these somehow ‘support’ their personal opinion of value. Bad enough in regular work. Even worse gobbledygook when used as […]
“I know a good comp when I see it! I have good judgment. I know my market. And I’ve been doing this for a long time.” (Oh yeah – I’m also pretty smart.) What do we learn to get an appraiser license? We are told that a comparable is competitive to the subject. Then, a […]
We have been taught that appraisal solved one problem: the opinion of value. We were taught an “appraisal process” (now a “Valuation Process”). The process is called a procedure. It goes like this:[1] Identify the problem Decide on your scope of work Collect the data and describe the property Analyze the data (include market analysis) […]
Appraisers provide clients a point value. From two weeks ago. An opinion. What clients need: A forecast, a risk analysis, an underlying “fundamental” value; annual and spot update revaluations. Why not? Why not us? Why not you? What are competitors providing? AVMs provide testable reliability (risk) measures BPOs are faster and cheaper Economists provide analytic […]
We’ve heard that Fannie and Freddie are developing new forms. So, what might the next 1004 form look like? Will it require three comps, two listings, and a pending? Will it require a full data download, or a description of search parameters? Will it still even be designed to fit on 8 ½ inch paper? […]
This week’s blog, Do You Confirm Comps or Verify Them? is a guest post written by Timothy C. Andersen, MAI, MNAA, MSc, CDEI. See below for a more detailed bio. Do you confirm your comps or verify them? Is there a discernible difference between “confirm” and “verify”? Is one the due diligence of a professional? Do our […]
Our education tells us a comp is similar and competitive. So how do we measure “comparability”? If our job entails studying market data to get an answer … might it be important to know exactly how to describe a comp? In researching the literature, including journal articles, I find little help. Only two or three […]
Bruce Hahn, MAI, SRA, ASA is sitting in for me with this week’s post, “Data Science Makes Appraisal Fun Again”. Bruce is the owner of Landmark Valuation and a past president of the Northern California Chapter of the Appraisal Institute. Find him on Linkedin or at www.LandmarkValuation.com. Thank you, Bruce! 2018 marks the start of […]
In an earlier post we noted that the ideal comparable data set is the complete CMS, the Competitive Market Segment(c) , not just three comps. Some readers disagreed, believing that three comps is enough. A primary reason for the use of all sales which competed directly with the subject property is that it improves the […]
We asked about comp selection in a “big data” world. Why do we still use three comps on a form, or six comps on a spreadsheet? What is the right data? It has been claimed that three comparables was used because they fit on an 8 ½” by 11” sheet of paper. For commercial work, […]