My friend, David Braun, points out in his book, The Valuation Analyst, that scope creep has turned into scope running. I’m sure many appraisers, particularly residential people will agree. He points out that as the reviewers ask for more, appraisers are finding ways to not be specific. This has turned into a self-perpetuating loop: “As […]
Can personal opinion be objective? The definition of “Appraiser” in USPAP requires “one who is expected to be competent, independent, impartial, and objective.” Clearly, the definition requires delving into the mind of clients, users, and perhaps the public. Can this be true? Perhaps we can look elsewhere in USPAP for help. The definition goes on […]
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) […]
Do you follow ethical rules, or moral principles? How does human psychology play in? It is proven that appraisers’ opinions mostly match sale price (for loans). Justifications are: The price simply reflects an efficient market. The price lands inside Richard Ratcliffe’s “transaction zone”. (The principle here is that a real “most probable” value does not […]
Exploratory Data Analysis (EDA) is an implicit part of traditional appraisal. The appraiser invokes education, training, and market area familiarity to decide on comparables and adjustments to be made. The process takes place fully in the mind of a competent practitioner. EDA is expressed in quasi-governmental standards (USPAP) as a focus on the subject property’s: […]
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 […]
MPI© (Market Price Indexing) is a holistic approach to market analysis and “time adjustments.” Here we look at the process, the theory, the judgment, and the benefits of this model. MPI – The process involves simple mechanics: Download the relevant competitive market data. Create a scatterplot with sale prices over time. Clean the data of […]