Appraisal Myths, Fallacies, and Foibles, #1 is the first in a series. Hype vs Reality: Adjustments and Comps – is the title of my talk on August 4th, 2017, for the Northern California Chapter of the Appraisal Institute. In preparing for this talk, it came to me that much of our discussions revolve around how […]
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 […]
Damn, isn’t just plain thinking enough? Now he sez I gotta start thinking about thinking too?! Ted Whitmer was teaching his AI “Third Party Provider” class in Houston last week, the day before the Stats, Graphs, and Data Science1 class, for the AI Chapter’s annual 28 hour recertification week. I was privileged to drop in […]
Tools for work, tools for life. This time of the year for many is a time of reflection and hope. My reflection today is how some principles of our profession may be principles of a successful life; what those principles may be, and how they’ve contributed to my joy and sense of satisfaction and service. Integrity […]
No it’s not. Just do what you’re told. Do what you were taught. Follow the Rules. No thinking required. What are the “rules” of appraisal? Easy: Get your intended user’s expectations (scope of Work). Pick your comps. Apply one or more “approaches”. Provide your opinion (then explain, justify and support that opinion). How will you […]
A “black swan event” is random and unexpected. Popularized by Nassim Taleb in his book “The Black Swan,” which describes an event (such as the last economic meltdown) as an unpredictable event. I ask, are the repeat real estate crises of every 10-12 years unpredictable, or a bevy of black swans migrating in wedge formation? […]
Stats can be troublesome. Knowing the why, the what, and the how of statistics can help rescue the appraisal profession. Continued misuse and misunderstanding will help bury it. Let’s look at these three questions. We look at misused words, statistics, and the opportunity. First: “The main problem with statistics is words.” Statistics is the study […]
Does it mean objective analysis? Or does it mean objective appraiser? This is the main difference between the Traditional Appraisal Process (TAP) and Evidence Based Valuation (EBV)©. The TAP is well defined in both USPAP (Appraisal Foundation) and in the Appraisal of Real Estate (Appraisal Institute): [themify_quote]An appraiser must act competently and in a manner […]
Graphs are pretty, have colors, and show things. Graphs are visual. The human ability to see and to visualize is stupendous. It’s the main connect between the world about us and our ability to think, reason, and make decisions. Visualization includes graphic plots, tables, maps, moving and interactive displays, including three, even four-dimensional interface. Part […]
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 […]
A hybrid is: The offspring of two plants or animals of different species or varieties, such as a mule (a hybrid of a donkey and a horse). Per my Google online dictionary . . . An appraisal hybrid, as I understand it, is two people, doing two parts of the appraisal job. One looks at […]
Price indexing is also known by other words, such as time adjustments or market conditions adjustments or trend analysis. A number of techniques have been recommended over the years. Most are flawed. Oddly, the algorithm mechanics of calculating are fairly simple and intuitive. Best of all, once done correctly, the payoff is really high: You […]
Presumably, “public trust” is the foundational test. Have our institutions, rules, regulations, standards, and social expectations failed us? The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers. Preamble 2018-2019 Our mission is to foster […]
We’re told to “support” our adjustments. We hear words like “prove” your adjustments. . . as if there were some magic formula which can give an exact, correct, and absolutely true number. It used to be so easy. . . Our trainer gave us a sheet with the “right” adjustments. Simple. USPAP Standards Rule 1-1 […]
This is Part Four in a series on Hybrid Appraisal. Be sure to read Part One, Part Two and Part Three. The term “hybrid appraisal” (as it’s currently used), means that the appraiser sits at a desk, while someone else (not an appraiser) looks at the property. It appears that the non-appraiser may or may […]