Appraisal Bias

[J Grant]

An appraiser providing a range is like saying to the client, "$300,000 and $310,000 is equally credible, so rather than just assuming I will put down the highest number, or the middle, but definitely not the lowest, how about you pick the number that fits your risk profile and leave me out of it? Thanks."

This is different than an AVM providing a range. Why? Because AVMs pick point values too! And yet, there are still major differences in the usefulness of an AVM and appraisal.

That has already happeed, it is called a WAIVERF/value acceptance and guess what, it totally, 100% eliminated the appraiser from those orders.
I've said it for years right here on this board, when the appraiser objects to giving a point value, the stakeholders will find a computer program or person to do it instead. (which they did) They are NOT going to pay appraisers just to develop a range.

 

[J Grant]

AVM's absolutely pick point values - and most often associate those with a confidence interval. Which is very closely related to an appraiser's adjusted sales range...

Even an AVM picks a point value, but you dont' want to pick a point value.

 

[J Grant]

JG it seems in the last week or so you have told almost everyone on here they should not even be an-appraiser . Why hold out and let George off the Hook , maybe he should be included in your weekly list of the unfit and non-redeemable LO

He had not argued against a point value so he escapes my god like judgement lol

 

[George Hatch]

That has already happeed, it is called a WAIVERF/valepE

They cleary said they are agaiinst a point value, that they dont' believe in it etc. They want to provide only a range. Read their posts for content.

I read every post for content and all I got out of it was that a range would be an improvement in terms of transparency WRT our limitations. And that you think anyone who disagrees with you shouldn't be appraising.

FWIW, in my own practice I sometimes do both. I don't do range-only.

 

[alebrewer]

Even an AVM picks a point value, but you dont' want to pick a point value.

Please provide me even one citation where I said I don't want to pick a point value. You are one of the most arrogant, judgmental, accusatory folks on the forum. Please stop making stuff up. What I HAVE said - and I'll say it again, as you seem to have trouble grasping the concept - (typing as slowly as possible) I don't believe point values exist as pertains to a property's true value. I believe a property will ALWAYS exhibit a range of value. The primary reason for this is the inefficiency of the real estate market. We're not valuing gold bullion - I'll stick a point value on a one ounce brick of gold ANY DAY! Real estate, however, is NOT homogeneous, the barriers to entry are HIGH, there are asymmetries of information, and there is no centralized clearinghouse for the product. In other words - it's an inefficient market, which means there is a lot of subjectivity introduced into purchase/sale decisions - subjectivity that cannot be quantitatively distilled into a single point value.

 

[J Grant]

Here is what I think shoujld happen ( and the reason why even though allowed, it is not happening

The appriaser picks a point value , say 305k. Then the lender can decide to lend more or less than that, in whatever tolerance range they want - 3 % more or less, for example, depending on borrower strength, property quality or whatever criteria they want to use

But, this is already allowed, yet lenders are reluctant to do it, becasue any decsision on their part wrt value makes them liable wrt an apprasial

That is why and how Fannie waiver/value acceptance gamed the system by removing the burden of the regulations around an appraisal and letting the lender pick the point value free of liability because waiver /value acceptance is not an appraisal

Idk where the mind is of those who even now are saying appraisers should not pick a point value -do they want to wipe out the remaining 50% left of lender work?

 

[J Grant]

I read every post for content and all I got out of it was that a range would be an improvement in terms of transparency WRT our limitations. And that you think anyone who disagrees with you shouldn't be appraising.

They are disagreeing with 'USPAP , you white washed what they said, some of them vehemently denied a property can even have a point value. That is why I said that about them. And who cares anyway, I get insulted on a regular basis here, so I return it once in awhile, meaningless either way.

 

[George Hatch]

They are disagreeing with 'USPAP , you white washed what they said, some of them vehemently denied a property can even have a point value. That is why I said that about them. And who cares anyway, I get insulted on a regular basis here, so I return it once in awhile, meaningless either way.

Citation needed.

As for insults, you're getting called an idiot; that's different than when you call them unethical.

 

[J Grant]

Please provide me even one citation where I said I don't want to pick a point value. You are one of the most arrogant, judgmental, accusatory folks on the forum. Please stop making stuff up. What I HAVE said - and I'll say it again, as you seem to have trouble grasping the concept - (typing as slowly as possible) I don't believe point values exist as pertains to a property's true value. I believe a property will ALWAYS exhibit a range of value. The primary reason for this is the inefficiency of the real estate market. We're not valuing gold bullion - I'll stick a point value on a one ounce brick of gold ANY DAY! Real estate, however, is NOT homogeneous, the barriers to entry are HIGH, there are asymmetries of information, and there is no centralized clearinghouse for the product. In other words - it's an inefficient market, which means there is a lot of subjectivity introduced into purchase/sale decisions - subjectivity that cannot be quantitatively distilled into a single point value.

Lol you just did in the above what you deny doing! Writing a commentary disparaging point values, right here !!

What is a "true value"?? You keep using that term. Where is it in USPAP or any appraisal literature?

We are not hired to give an opinion for the "true value" ( whatever that is supposed to mean) of a property. We are hired to provide an opinion of market value for the property, only relevant to and used in our own appraisal. . Most of those assignments the client wants the opinion of market value as a point value.

 

[J Grant]

Citation needed.

As for insults, you're getting called an idiot; that's different than when you call them unethical.

whatever, it was wrong of me to insult them, apologies.

Okay, I will now insult myself!! I am an idiot, a terrible person and an appraiser who is arrogant, judgmental and annoying!!