The AI (Appraisal Institute) is experiencing pain. But it’s the result of sickness, instead of the growth pains of advancement.
Why?
As noted before, organizations tend to die due to one of two causes:
- Failure to respect its original, declared mission
- Failure to adapt to changing conditions.
In the past, it was a world of difficult, sparse, and even bad data. Our mission was the science of valuation: “the systematic study, by observation or experiment – by an expert in scientific method and the field of study.”
These solutions recognized the data limitations of those days. Analysis methods had to cater to the human analytic capacity of that day.
While the work process back then recognized that appraisal is market analysis – it also recognized that it was effectively impossible to gather all the relevant, available market data (as required by USPAP). The best we could do was to hand-pick a sample of “some comps” which (in our judgment) nicely represented the competitive market segment. The quality (similarity) of our comps relied on our judgment – based on training, experience, education, and ethics.
But the old way is credible, accepted, well-established, embedded, and required. The old way then becomes the sickness. New competitors, workarounds, and waivers take over market share. Membership declines, education becomes stale, and prestige is a leftover.
The sickness manifests in different ways. It can be conflict of “tribes,” or it can be personal – the giving up of the group mission for personal power. Usually these two get intermixed, and it can become difficult to sort out who is the “enemy” and who is a dedicated leader.
Eventually, the symptoms of the sickness are recognized by some. Usually not in a specific way, but in sort of a general way. This is difficult. A fight versus groupthink gaslighting. But the gaslighters do not even recognize they are gaslighting. They themselves have been brainwashed by loyalty, a sense of following those in front, and a sense of commitment to the original mission, a worthy mission.
I came up “through the ranks.” Chapter committee. Committee leader. Chapter officer then President. Then regional officer, and member of national committees. Teacher and author. And awards and “special” treatment. Then elected a Director of the National AI. It felt good.
For me it felt good in two ways. An opportunity to serve. But also, a boost to my ego. I was someone. Someone in a respected profession, in a position of leadership. I got some respect, whether deserved or not. Some entitlement. A fight for entitlement. A goal different from the real organizational mission.
I had some special qualifications. In my case, it was extensive graduate education in statistics, econometrics, computer things, and even risk (insurance, from the math department). Many, many courses.
The difference was that I was already an appraiser. Each and every class I took kept answering the question: “How does this apply to valuation?” The classes were not easy, but each encouraged the next. 14 years.
I had something special to give, and something special to be recognized for.
This is why today I can feel for those who love the profession and our organization as they watch the sickness revealed. Those who still have hope for the future. Those who believe in the original mission statements of our merged organizations (the SREA and the AIREA).
The mission was the science of valuation. The mission was market analysis (not comparing comps). The mission required some giving up of self – for the good of the client, the profession, and the public trust.
Do we have a chance for hope?
At Valuemetrics.Info Appraiser Education, we measure Markets, not compare Comps.