Freddie Mac: Quality & Condition Ratings

[George Hatch]

How many appraisal reviews might have gone the other way if the question was framed in terms of reasonable instead of accurate?

A reference of fact can be characterized as either accurate or inaccurate.

"The subject site zoning is reported as RS-1-7, Residential Single Family" ​

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The results of the analyses, opinions and conclusions are heavily reliant upon the accuracy of the facts upon which they are based. You cannot get to a usable result with inaccurate data. Accuracy is king when it comes to the facts.

But SR-3 doesn't characterize the analyses, opinions and conclusions in terms of "accurate", nor does SR-3 defer to some external benchmark other than "the requirements applicable to that work".

 

[J Grant]

How many appraisal reviews might have gone the other way if the question was framed in terms of reasonable instead of accurate?

A reference of fact can be characterized as either accurate or inaccurate.

"The subject site zoning is reported as RS-1-7, Residential Single Family" ​

​

The results of the analyses, opinions and conclusions are heavily reliant upon the accuracy of the facts upon which they are based. You cannot get to a usable result with inaccurate data. Accuracy is king when it comes to the facts.

But SR-3 doesn't characterize the analyses, opinions and conclusions in terms of "accurate", nor does SR-3 defer to some external benchmark other than "the requirements applicable to that work".

View attachment 94311

The problem is not reviews ( needs its own topic )
The problem is not about data accuracy since correct data is in and of itself is "accurate."

The problem is that an appraisal, or any form of valuation including AVMs, is a blend of "accurate" data and modeling- the models of adjustments, for example. Or a model of cost or of lease rates. Whether an appraiser develops a $12000 per bath adjustment or a computer does it, not every buyer is going to spend $12,000 for an additional bath - the 12k is an average or a model of what most well informed buyers might pay pay for an amenity ( or what $ discount a buyer would expect for a defect )

Add to that the complexities of comp selection, the fact that markets are often in flux and changing, and that financing plays a role, and for res RE, buyer emotion and seller motivation also play a role

Yet the fact remains that any finite point value number is "accurate" in and of itself - but how credible and reliable it also is counts - and the verbiage around a MV opinion in an appraisal is that the value opinion is the most probable price (which acts as a disclaimer) - add that the MVO is also tied to a DOM market exposure estimate qualifies it as well.

In a multiple bid situation on a property, whether on MLS or at auction, buyers put forth different $ amount offers within a short time frame on the same property - that tells us something right there that evolution is a model since it is useless to give 100 different varying price points as the opinion or estimate .

 

[George Hatch]

You know, after all these years on this forum I had assumed that you already knew that "accurate" isn't the benchmark for the measure of assignment results in SR1. That's why I veered off into SR3 when we got to talking about reviews.

Go back and read top of the page in SR1 for what it actually says. Maybe you'll remember it better if you think it through for yourself. And when you do run into the operative term, don't forget to go back to the comment which explains the context for applying that operative term, which appears in the SOWR.

 

[J Grant]

You know, after all these years on this forum I had assumed that you already knew that "accurate" isn't the benchmark in SR1. That's why I veered off into SR3 when we got to talking about reviews.

Go back and read SR1 for what it actually says. Maybe you'll remember it better if you think it through for yourself. And when you do run into the operative term, don't forget to go back to the comment which explains the context for applying that operative term, which appears in the SOWR.

We are saying the same thing in different ways.

However, the fact remains that a point value in and of itself is one singular number and is not the other 10 or 100 reasonable possible numbers within a range. It is the misunderstand around that which causes the problems imo-

 

[George Hatch]

No we're not speaking the same language here. "Accurate" can be factual or non-factual. That's not the basis for measuring opinions and conclusions.

IMO most USPAP-related controversies stem from adding to the material beyond what it already says. Especially when it comes to some of the terms people use.

 

[J Grant]

No we're not speaking the same language here. "Accurate" can be factual or non-factual. That's not the basis for measuring opinions and conclusions.

IMO most USPAP-related controversies stem from adding to the material beyond what it already says. Especially when it comes to some of the terms people use.

It's not my decision to measure opinions and conclusions by accuracy !

The URAR form states it as an expectation for the value opinion, and the review form asks it repeatedly -Argue it with them - not me...

 

[George Hatch]

Like I said, I think its a dumb way to look at value when you know that the 10 appraisers which slightly vary can all be considered credible within the context of the intended use. Not to mention the point that in many assignments its impossible to get 10 appraisers - all working to specs - to come up with the same point value.

USPAP is intended to function as a minimum standard that we can expect from everyone, all the time. It is not an aspirational challenge that nobody can meet all the time. Hence the explicit reference to judging assignment results in terms of what's credible ("worthy of belief") , not to accurate. And the reference to "meaningful and not misleading to intended users". Not to external benchmarks which go beyond.

Even "worthy of belief" doesn't speak to accurate.

 

[Mejappz]

The URAR form states it as an expectation for the value opinion, and the review form asks it repeatedly -Argue it with them - not me

 

[George Hatch]

Yeah, that jumped out at me the first time it popped up here. TBH, it shocks me to see an MAI/SRA traffic in that term.

Why don't you ask him how accurate he thinks his appraisal is on that Class A ofc bldg or that 50ac parcel of ag land. Because if that is what he is asserting then his conclusion can only be either accurate or inaccurate.

Yeah, it's all fun-n-games until you get out of SFR-land.

 

[Mejappz]

Move over USPAP and let Lyle take over.