Artificial intelligence is a blinding light through a stormy hole in the sky. Punctuated at times by lightning bolts. People yelling “look out.” All this, in a world of UAD and “new” requirements like for time adjustment! Whew!
Gonna quit. Gonna retire. Gonna see. Gonna wait. Let’s see how it goes.
Fight, flight, or freeze?
We will look at this question as it is today, and as it is clearly arriving. Any question, any problem, any search for a direction follows the same path. The same process as one does an appraisal:
- Identify the problem
- Select right data
- Predict result
- Report
We will consider each of these parts of the “appraisal process.” We will also review how this process works overall. However, it is wise to widen our viewpoint. Why? Because an appraisal is a personal professional opinion of value. Yet the appraisal product is just one form of valuation product.
Appraisal, then, is simply the valuation process, model, algorithm, where the result is restricted to just an opinion, with that opinion “supported.”
“Form an opinion, and find a way to support it.”
If we are to consider the role of artificial intelligence, we must consider: what is support? Is support somehow better than evidence? And which comes first: the opinion, support, evidence, or analysis? And if there is actual analysis, is the result support, or is it an analytic result, an estimate, or prediction? And what actually is the role of the expert, the intelligent human participant?
And if we are to add AI to this mix – how does this change things?
It appears we have here a triad, a threesome of interaction: The “process,” the intelligent expert, and the “artificial” intelligence.
Lets start with basics, and understand the power of words!
What is “intelligence”? It is “a broad mental capability encompassing the ability to learn from experience, reason, solve complex problems, and to adapt to new situations.”
Wow! A heady, lofty explanation.
And if we add the elements of aging professional requirements, standards, administrative laws, peers’ actions, user expectations, and outdated licensing education (pick comps, then adjust) – this gets sticky.
It looks like intelligent valuation involves a lot of things. My head hurts. My head needs a couple of pillows, not the hard wall of quasi-governmental authority, and “recognized methods and techniques.”
We will do our best in future blogs, and in our curriculum, and webinars – to provide useful information for appraisers, risk analysts, lenders/investors/regulators/consumers.
We will find and destroy the complexity and uncertainty of the legacy appraisal practice. We will organize the modern replacement. We will simplify the process to match todays technology.” Evidence.
There is a clear path. Let’s look.