Tagged: Adjustments

Appraisal news for real estate appraisers and real estate professionals regarding appraisal adjustments. News relating to the Appraisal Industry.

Big Data is the BuzzWord. Can We Trust Regression in Amenity Valuation? 13

Can We Trust Regression…

I would like to give a background as to what prompted this article. A few years back, word on the street was that the Collateral Underwriter was going to be using big data collected directly from our reports from the inception of UAD to aid in determining what should be “reasonable adjustments”. In order to be preemptive, I consulted an acquaintance of mine who just so happened to have a PhD in Statistics from Princeton. We worked through a number of real case scenario data sets to try and figure out if there was a way I could use regression...

Property Selection for analysis & Statistics in Appraisals - Appraisers Blogs 10

Property Selection for Analysis & Statistics

The importance of proper property selection and ‘statistics’ in appraisals… Appraisers, I would like to direct you to info written by Mr. George Dell in his latest blog post circulated on July 3, 2019. This is one of the best explanations I’ve seen him write on this topic, of how to select and analyze properties when doing appraisals, and why correct ‘statistics’ presented in reports is important. I first became aware of the importance of proper property selection and ‘statistics’ when I attended an appraiser’s training class in 2008 in Las Vegas. The primary speakers were Mr. David Braun and Mr. Patrick...

Science & Art Reflect our Search for the Truth - Is There an Art in Science? 8

Is There an Art in Science?

We know there is science in art. Musical scales. Perspective and the golden ratio. The ordered sequence of a good novel. It’s difficult to be a good artist without knowing, or at least intuitively applying the truths found in the logic. Both science and art reflect our search for the truth. Our primal human nature is to resist the truth, even as it hits us in the groin. Resist the change. Fear. Give up something that has protected you. Something that gives you a place. A belonging. A prestige. An ego. A place where you are respected. Then someone or something comes along and says there is a better way. I...

Should We Real Estate Appraisers Stop Making Adjustments? 39

Should Adjustments Actually Be Done?

How much credit should we give ourselves when it comes to making adjustments? Making adjustments is controversial. USPAP says nothing about adjustments – it does not require us to make them. They are a GSE construct. So, should we real estate appraisers stop making adjustments? Clients pay us for opinions of value, so our adjustments are really opinions based on what the market tells us (or that’s what we should base them on), but they are still opinions we form; they are not facts we find. So, maybe, should we stop making adjustments? We derive our adjustments from sources such...

USPAP or Not Mueller REO report 36

Mueller REO Hybrid Appraisal Report

Another Mueller Report has surfaced. The report is a Mueller REO Hybrid Appraisal Report and it was given to an appraiser as a sample. This one raises more questions than the last one! The photos from the property inspection do not tell the appraiser one thing. The photos are dark and the repairs the inspector states are needed, simply are not seen in the photos. It begs the question, does the appraiser have adequate information to complete a credible appraisal? Now take a look at the Mueller REO Hybrid Appraisal report. Pull up the report and follow along. Some things have...

Increased Regulatory Persecution of Real Estate Appraisers - USPAP 21

Increased Regulatory Persecution of Appraisers

The current and proposed revised version of USPAP also opens the door to increased regulatory persecution of licensed and certified real estate appraisers, while leaving all others that opine about values with no constraints, rules or limitations. I was recently asked to consider a proposed change to USPAP. As received in my email: “Also this, in the 3rd exposure draft 239 The appraiser is not required to title an appraisal report using specific terminology because 240 USPAP compliance is measured by the substantive content of a report, not by what the 241 report is called. The use of labels such as analysis,...

Report Observation & Trigger Points - Don't Fall Into a Trap! 10

Report Observation & Trigger Points

Appraisers, this is another essay written about a report I have ‘observed.’ I’ve mentioned before that I “come in contact with” appraisal reports from a variety of sources. Those that I determine have significant issues I write about. Conclusions about the ‘real value’ will be disclosed below. Trigger points for having reports formally reviewed are discussed. I do this because a majority of appraisers do not participate and interact with their peers on a consistent basis, and therefore may not get exposed to items that clients and lenders see in reports, which they question. I believe it’s important to expose items in reports that...

What Does it Mean Support and Prove? Uncertainty Is Risk 2

What Does it Mean ‘Support & Prove’?

What we do is subject to uncertainty. I searched the words: support and prove in both USPAP and in The Appraisal of Real Estate”. Interestingly, the word prove is not found in either document in this context. The fuzzier word support is found throughout both. The word ‘support’ seems to support supporting your opinion. How is the word “support” used in the context of making adjustments? I decided the dictionary would provide some support for how the word ‘support’ is used. The results are curious, perhaps troubling. Which comes first: the opinion, or the analysis? Do you support your opinion, or do you come to a result from doing your analysis? As a verb, the meanings of ‘support’ include: suggest the truth...

What is Truth or Accuracy for Appraisers? How Do We Find Accuracy? 12

What is Truth or Accuracy for Appraisers?

Are we supposed to be paid truth-seekers? The appraiser is supposed to be accurate. What is “accurate”? Dictionary meanings say accuracy is “the condition or quality of being true, correct, or exact.” Tell the truth. Can it be? Hmmm. A search for truth. OK. So how do we come to know the truth? Are we supposed to be paid truth-seekers? Cool. I read that there are four ways to “know” truth: Tradition, Authority, Insistence, and Science. Wow! Let’s look at these briefly. This sounds serious! Let’s look at USPAP and The Appraisal of Real Estate. Appraisers have long been steeped in the...

Is It Possible to Prove an Adjustment 4

Is It Possible to “Prove” an Adjustment?

We read articles and advertisements on how to prove an adjustment. Is this possible? How wonderful it would be. To prove an adjustment, just push a button and bam! Out comes the correct answer. How could we have we missed this? …prove an adjustment, just push a button…Of course, if such a simplistic and exact answer was possible – anyone could push that button.  An AVM run, a BPO agent, an “evaluator”, or anyone else. Who needs all that USPAP competence and integrity stuff? Even a lender-appointed hybridized “field inspector” could just push the button. The whole process could even skip working with the licensed appraiser completely!...

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