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, […]
Quiz: How many comps are “just right?” First we must ask: What is a comparable? We can take two attitudes: 1) “I know a good comp when I see it!” or; 2) What does our accepted literature say? The Appraisal of Real Estate says . . . “The data used for comparison … should come […]
For the Stats, Graphs, and Data Science1 class, we are often asked if the material is oriented to residential or commercial property. The question itself assumes that the property type defines the logic of analysis. Data science is the science of data. The class itself is about methodology, technology, and cognitology. Whew! The question about […]
I saw an article from the Washington Post, December 15, 2017, saying the administrative/enforcement branch of the U.S. government is banning the use of certain words or phrases. Two of the phrases include “science-based” and “evidence-based”. As many of you know, I am an active advocate of Evidence Based Valuation.© If valuation based on evidence […]
Appraisers have always worked with data. In the early days, we’d go to the county courthouse to examine the possible types available in the county recorder’s sales that might convert into useful “comps.” An experienced appraiser had a rough idea of what was being looked for, taking the first step in converting unsystematic data into […]
Why do we have scope creep? Possible answers include: The reviewer or clerk has to justify their existence; There is genuine concern about something; The work should’ve been there in the first place; It’s important to remember that our entire system of appraisal production and review is belief-based. It must be “worthy of belief.” We […]
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 […]
Is Appraisal belief based? USPAP says our work should be credible: “worthy of belief.” That’s the test. What/who tests worthiness? In the Scope of Work Rule, it is “client expectations” and “peer’s actions.” In the section on “acceptability,” it goes even further, stating that an appraiser must do what “would appear relevant to the client.” […]
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 […]
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 […]
It depends on the client. Clients complain depending on the motive of the complainer! Let’s first look at just residential loan clients. (The other types of clients are for another time, another post.) So, what are the “types” of complainers in the residential loan world? Some categories: Form checkers “Administrative” reviewers Technical reviewers Middle management […]
Part IV of VI: Data is data. It becomes useful in only two ways. Simple, huh? Appraisers and asset analysts add value to data by a systematic process. The analysis turns data into useful information. The information can then become knowledge, useful for making a decision. Analyst judgment is still required. The judgment is improved […]
Why Stats, Why Graphs, Why Data, Why Science? (Part VI of VI) How is this stuff different from the established classical, traditional appraisal “process”? Is this technology or a new theory? Are data, and science somehow better? Or is it just mumbo-jumbo to look impressive? Is there something wrong with traditional appraisal theory? The traditional […]
It was pointed out to me after part 1, that a hybrid like a mule, is sterile and the end of the biological line. Is this true about the hybrid appraisal? A hybrid appraisal, as applied today, means that someone other than the signing appraiser, usually an agent, goes out and does the property inspection. […]
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 […]