The Appraisal Foundation Advisory Opinion 41 is about “when technology is used” in an appraisal.

Is this a solution seeking a problem?  (I use “technology” in every appraisal.)

A snippy response might note that the modern electronic typewriter, with built-in whiteout ribbon, is technology – as is the modern ten-key calculator.  We have always used technology, since we discovered fire and invented spears.  The issue here is about modern technology.  Computers, data, space signals, and even thinking thinker machines!

The appraiser complies with Foundation rules (USPAP)  – things do not!  Even if the things are really clever, fast, and smart!

Here is the problem.  Tech things are math and probability.  Measurable reliability.

USPAP builds on one foundation stone, one word: “credible.”  Worthy believability.

Judging technology through the lens of believability – is quite a challenge!  Any future public policy must recognize that this is a battle of the legacy of the past – this one word: credible. “Worthy of belief.”  Any technology must fit, surrounded by that picture frame in the colors and hues of its worthiness.

Such is the challenge of AO-41, advice on the use of technology through the lens of believability.

The public (and the industry) need is for valuation to be reliable, accurate, and valid.  Public policy needs measurable collateral risk of home loan security.  Investors need measurable investment risk.  Judiciary/agency functions need fairness and equitability.  The cloak of “trust me, believe me” has long past.

This blog series is on technology, tools, and intelligence appraisal.  We return now to a tedious yet exciting journey through the lens of AO-41 and future of the appraisal, and the re-faltering public trust.

AO-41 “opportunities and challenges” it says. (p.3).  “The Issue” is described in sweeping terms.  It notes models, software, AI, AVMs, and data.

Glaringly, the word “science” is not to be found.

It recognizes a distinction between “obtaining information” and “relying on the tool.”

Before we go on, it may be critical to note the meaning of the word: information.  Information is data made useful through application of one of the three basic analytical tools (which we will expose in this tech series).  Information must be relevant and clearly specific.  Not “carefully selected by me.”  No magic rabbit out of the hat.

Equivocating and interchanging these two distinct words:  data and information – is a source of great misunderstanding of technology and the tools of analysis.  The foundation stone cannot be sandstone.

The standards board opinion suggests that a tool may be a data source.

This is problematic.  Data is data.  In and of itself. It is not technology.

An example:  The number and wattage of the light bulbs in the room you are in now – is not a tool.  It is data.  Not a tool.  The living area of a house is not a tool.  It is data.

The overall problem here is the viewpoint.  The Standards Board of individuals rightfully must advise within the boundaries of USPAP.  USPAP is credibility/believability based.  It is trust based.  It is not reliability, risk, or reproducibility based.

The advice frames technology and reliability within the bounds of credibility.  What is needed instead, is “modernized” advice which defines standards within the picture frame of modern technology.

Next up:  “recognized methods and techniques vs. new methods and techniques.”   Huh?