“Ya gotta make this stuff simple” I am told . . . Data Science: Get the right data, clean the data, apply predictives, get results. Property analytics: Get the right data, clean it, apply predictives, get results. So let’s expand this: Step 1. Identify the problem, download all the data you will ever need. Step […]
Consumer home loan valuations serve those who pay the bill – the lender. This cost is passed on to the buyer, and the buyer usually has a right to get a ‘copy’ of the report. However, the valuation is not there to help the buyer decide whether the price is fair or a good investment. […]
Evidence is a necessary part of any research or analysis. In a prior blog, we considered that it was a core part of EBV (Evidence Based Valuation©). We noted three basic types (or ‘support’ for a personal opinion). We have logical – “if A, then B must follow”. We have empirical – “If A, then […]
Reviewers ask why a certain sale was not used as a comparable. Why don’t they know I already used the best comps, just like I was taught? Don’t they know I used what was competitive, similar, and “able to be compared” – Just like The Appraisal of Real Estate 15th ed. says: A good comparable […]
Three comparables have been the standard for many years. On the residential appraisal side, some clients ask for more (such as current listings). For ‘general’ appraisal, typically four to six comparable sales are enough to achieve believability (credibility). Believability arrives at the user’s desk in a readable report. In the past, the standard residential form […]
Process: Current appraisal practices are controlled by the quirks of each ‘valuation’ industry: appraisal by obsolete assumptions of data difficulty, AVM ‘automated’ models by industrial secrecy, and other non-appraiser products which are under-regulated or over-regulated — depending on original intent. In order to fully consider the place of appraisal—we have to look at the entire […]
Some form of Universal Valuation Standards (UVS)© appears to be one way to resolve the multiple issues we see today. Our most recent series focused on the obsolescence of the traditional appraisal process. The primary cause of the obsolescence is the shift from subjective onesey-threesy methods of picking comps – to immediate electronic download of […]
Per FreddieMac (Scott Reuter, Chief Appraiser)[1] recently stated: “Appraisers need to spend time on developing a market conditions analysis in the appraisal. It’s truly the backbone of the appraisal.” Per the Fannie Mae Selling Guide: “The date of sale and the time adjustment (market conditions) are critical elements in determining an accurate value because the […]
The messenger. Psychology research easily points out our tendency to dislike the bearer of bad news. It’s also intuitive. Bad news messengers do not smile when they bring the news. Sometimes they even look guilty. We humans can be really basic. We see a correlation between the bad news, the frown, and the messenger. Appraisers […]
EBV measures markets, rather than compares comps. In the traditional appraisal process, the appraiser ‘picks some comps’, then adjusts any differences in each comparable to the subject feature. In EBV (Evidence Based Valuation©), the analyst identifies all the competitive sales, then applies predictive algorithms. Which system is more USPAP compliant? Which system is more accurate? […]
Diversity can be a goal in itself when diversity means breaking down barriers of groupthink and apathy. An expansive concept. Fairness, on the other hand is elusive, demanding definition. Fairness depends on the very point of view it attempts to define. “Fair” is in the eye of the beholder. EBV (Evidence Based Valuation)© (or EBA, […]
Appraiser credibility continues to decay over time. Even during the great runup in prices, and now the spotty, often rapid rundown in prices – residential appraisers mostly turned a blind eye to the need for this critical “time adjustment.” Non-residential appraisers have yet to see the coming value shifts. Shamefully, a time adjustment, (or market […]
Evidence Based Valuation – EBV is the future for valuation professionals. It requires the appraiser’s experience, judgment, and knowledge. It’s not hard, just new. EBV captures the huge advantages of modern technology: computer power, open-source software, and market visualization. EBV provides an exciting learning path toward better service, personal satisfaction, and income security. Most importantly, […]
Evidence Based Valuation – EBV © is the future for valuation professionals. It requires the appraiser’s experience, judgment, and knowledge. It is not hard, just new. It gives better results faster. EBV generates more than a point value opinion. Therefore it requires competence beyond old legacy appraisal “procedures.” This new competency is a merger of […]
Evidence Based Valuation© – EBV exemplifies the best of what has been called “appraisal modernization.” Do current standards help our progress, or are they in the way of the best future? Part I is an overview. Part II is on education. Standards intertwine with education. Here in Part III we start our multi-part look at USPAP […]