Appraisal Statistics

[DWiley]

I will show someone an accurate value opinion as soon as they show me a round square It defies basic logic to address the "accuracy" of an opinion. That is why USPAP refers to credibility, not accuracy.

 

[Rlong]

I will show someone an accurate value opinion as soon as they show me a round square It defies basic logic to address the "accuracy" of an opinion. That is why USPAP refers to credibility, not accuracy.

Well that's "accurate"!

 

[Meandering]

I will show someone an accurate value opinion as soon as they show me a round square It defies basic logic to address the "accuracy" of an opinion. That is why USPAP refers to credibility, not accuracy.

Wander on over to the thread where the judge set the price. The judge’s opinion is accurate and enforced by law

 

[J Grant]

Marion-Wander on over to the thread where the judge set the price. The judge’s opinion is accurate and enforced by law

There is truth to that- an opinion, price, or estimate, is considered "accurate" because people using it agree to accept it . Their acceptance of X number as "accurate " might be reinforced by law, contract, or custom.

Sale price: 152,000. A buyer /seller agree to 152k price. Could they have agreed on 151k or 153k ? Yes, but they didn't. They agreed to 152k, and their agreement makes 152k the contract price.

An opinion or estimate of market value: Engage different appraisers or run different AVM's on same property and there can be variances in results. It would be the acceptance of a result as "accurate" for reliable use by the parties that endorses it as such.

An opinion of value comes with caveats of being adequately supported, credible/ USPAP compliant- if challenged and found how the value was derived is faulty, such as by a reviewer or UW, the opinion of value may no longer be accepted as "accurate" for it's intended use.

 

[Artemis Fowl]

I always thought accurate referred to the data you use in the report. Hard to have a credible opinion when accurate data not there. They work together.

 

[Meandering]

I always thought accurate referred to the data you use in the report. Hard to have a credible opinion when accurate data not there. They work together.

That, or,
Just have an appraisal contingency in the sales contract,

That way the sale price will reflect what the appraiser said.
Can't get more "accurate" than that.

Have the bull's eye chase the dart.



.

 

[J Grant]

Definition of accurate
1: free from error especially as the result of care

• an accurate diagnosis

2: conforming exactly to truth or to a standard : exact

• providing accurate color

3: able to give an accurate result

• an accurate gauge

The mistake is equating the concept of "accurate" as just mathematical precision.

The above definition nails it...while an appraisal report can be acceptable with a minor error, a material error affecting results can invalidate it. Same for truth..the math can be correct and the appraisal free form errors, but if the value was based on a misleading element, such as failing to disclose subject backs a busy road, and/or failing to account for affect on value of the busy road, the accuracy is discredited. (truth). Report conforms to a standard: (USPAP)

 

[glenn walker]

The appraisal may be Accurate but it's not Exact meaning it would have to be perfect and not approximated in any way- Another way of thinking is the appraisal may be Accurate but it's not Precise !

 

[George Hatch]

You guys are using Fannie's perspective on appraisal results, which is in conflict with an appraisal standards perspective. As Danny said earlier, USPAP does not refer to opinions and conclusions in terms of accuracy, but in terms of credible. For some specific reasons.

We relate accuracy to matters of fact. Once stated, a contract price is a fact and reporting it is a matter of accuracy. Accuracy is a useful (even critical) measure of factual data. You can't get to credible results with grossly inaccurate data. So accuracy is still extremely relevant and important to us in that usage. But by contrast, opinions are not facts; hence the distinction.

This is a go/no-go distinction that is drilled into the USPAP Instructors during the USPAP Instructor's cert course, and (among other concepts) you won't pass that course unless you understand this.

If I'm reviewing an appraisal I'm looking first and foremost to the factual accuracy of the descriptions of subject and the properties (and their transactions) being presented as comparables. That's because with SFR appraisals prolly 95% of unreasonable value conclusions are primarily dependent on significant errors of omission or commission WRT these data and/or how comparable these sales really are that are being presented as the most similar and relevant. Calling it a C3 instead of a C4, or skipping more similar in favor of using less similar in the comps selection.

If the facts are accurate then I don't have that much concern for the adjustment factors being used so long as they're applied consistently, which is the next most common problem (which is to say, not that common). The actual amount of the adjustment factors is usually far less of a problem by comparison because the worst thing that happens is you end up with an unnecessarily larger range of adjusted indicators.

I almost never hassle an appraiser's choice of adjustment factors unless they're completely mindless and ineffective.

 

[George Hatch]

Let me switch gears on this a little. Value conclusions are not the only opinions that show up in an appraisal report.

Would you want a reader to measure your opinion of HBU in terms or accurate or reasonable/credible?
Would you want a reader to measure your opinion of exposure time in terms of accurate or reasonable?
Would you want a reader to measure your opinion of site utility in terms of accurate or reasonable?

Conversely,
Would you want a reader to measure your summary on site zoning in terms of accurate or reasonable?
Would you want a reader to measure your summary on GLA size in terms of accurate or reasonable?
Would you want a reader to measure your summary of a lease or rental agreement in terms of accurate or reasonable?


There's a big role for accurate in appraising, but it's not the role that a lot of people are thinking it is.