Regression for GLA Adjustment

[George Hatch]

Isn't that an other way of saying that the users decide what is/isn't meaningful to their use? How much development is enough, how much reporting is enough, how much precision is enough. What additional level of work they will and won't pay for.

Everyone here understands the markets are imperfect. That's why I disagree with the underlying idea that appraisers can be smarter than the entire market as a whole. Smarter than this individual or that individual is one thing; smarter the entire group of 100 of them is something different.

 

[Terrel L. Shields]

Sorry I was really not talking about a spouse but sometimes it happens. Often we tend to think its not as serious as it really is until too late.

I have been lucky to have a close and happy relationship with my own family, parents, brother, uncles & aunts, cousins, even second cousins level,...wives and girlfriends...OTOH...not so much. So my big regret is not staying married, rather was to have at least one child...even if that child had to be raised away from me. I honestly cannot think of a single woman I've dated or married that I'd want to be the mother of such child however. I would not want to be that cruel to a child, especially a male one. And honestly part of that is on me. I am an introvert. I like peace and quiet. I'm never happier than sitting in a tractor, or a boat, or driving down a long road to nowhere. Or maybe just sitting reading a book, shooting some photographs, hunting, fishing, whatever.

I had a needy girlfriend for years. I wanted to take her with me on vacation to Colorado. But she insisted I fly her to Denver and then pick her up there because she didn't want to ride across Kansas. Sure. Sometimes someone is really not your mate, it's just your turn.

 

[J Grant]

Isn't that an other way of saying that the users decide what is/isn't meaningful to their use? How much development is enough, how much reporting is enough, how much precision is enough. What additional level of work they will and won't pay for.

Everyone here understands the markets are imperfect. That's why I disagree with the underlying idea that appraisers can be smarter than the entire market as a whole. Smarter than this individual or that individual is one thing; smarter the entire group of 100 of them is something different.

I don't understand the appraiser's smarter than the market concept, ( not the first time floated by others as well)

Appraisers don't claim to be "smarter than the market " Appraisers do claim to be able to analyze the market better for the intended valuation purpose, and sometimes it happens when a market crashes and prices tank and masses of people lose their houses due to being underwater or overpaying, a lot of folks made a poorly informed choice - sometimes it is apparent at the time, other times seen in hindsight. Most appraisers are cognizant of it happening in real-time, as opposed to RE agents who keep urging everyone to overspend and mortgage lenders encouraging people to overborrow.

Appraisers might not be popular for being the only sober party in a room full of drunks and end up the designated driver but popularity is not supposed to be the goal.

 

[J Grant]

Credibility in an appraisal is judged in the context of the Intended Use. It's true that some appraisal assignments are very complex however, most of the appraisals that are requested are not of complex properties and in most, the Intended Use is to help a Lender make a decision.

It is not solely judged in the context of intended use, crlbity is also judged by adhering to USPAP standards and accurately analyzing the market, and fulfilling accepted appraiser methodology.

A review appraisal exists to judge an appraisal on those merits, it is assumed they all fulfill their intended use.

 

[J Grant]

"Credibility" has to be the lowest bar among all standards ever devised by humans, and is essentially untested in the appraisal world because no one will pay to compare the result to reality. Anyone can write a credible report completely lacking in veracity, and since the practical application of "credible" has become, "can we make the loan?", there really is no standard in that. You simply cannot reconcile the "most probable" aspect in the definition of market value with the lack of complete lack of value in "credible" results as "supported", our other non-existent standard of quality. The clear result is that the bulk of lending valuations will soon be conducted outside the toothless/useless/worthless auspices of USPAP and the existing licensing and regulatory bureaucracy.

Appraiser credibility is a much better standard than an AVM confidence score -

and even a Fannie waiver is only granted if an existing appraisal is on file for the property.

 

[TerryRohrer]

Appraiser credibility is a much better standard than an AVM confidence score

Probably why "appraiser credibility" has grown to be so highly regarded today!

 

[George Hatch]

I don't understand the appraiser's smarter than the market concept, ( not the first time floated by others as well)

Appraisers don't claim to be "smarter than the market " Appraisers do claim to be able to analyze the market better for the intended valuation purpose, and sometimes it happens when a market crashes and prices tank and masses of people lose their houses due to being underwater or overpaying, a lot of folks made a poorly informed choice - sometimes it is apparent at the time, other times seen in hindsight. Most appraisers are cognizant of it happening in real-time, as opposed to RE agents who keep urging everyone to overspend and mortgage lenders encouraging people to overborrow.

Appraisers might not be popular for being the only sober party in a room full of drunks and end up the designated driver but popularity is not supposed to be the goal.

They may not be saying so directly but there are some appraisers who effectively ARE asserting that an appraisal can be more precise than the data used therein. Meaning, appraisers can be smarter than the market.

Matter of fact, every time you push back against "what is" in these transactions vs what you think "should be" in the market that's also an example of what I'm talking about. Maybe not in terms of precision but certainly in terms of our assertions of what MV is/isn't.

Let the data speak.

 

[TerryRohrer]

Let the data speak! Yep, and I own too many books and other informational media in too many forms to ingest if I did nothing but for the rest of my life. I very much want to know what each says. But when I look at a pile of them and demand, "What do you say?", the following silence is deafening! Even when I INSIST they say nothing. I find my spreadsheets and databases packed with data equally indifferent. It turns out, somebody or something has to act÷...all those reprobates who need to speak won't.

But glib phrases and meaningless "standards" don't really serve much purpose outside an internet forum. Meanwhile, users have concluded in significant numbers to let the data speak to them without the benefit of appraiser interpretation or misinterpretation. Those users have spoken about what is, and what is not, meaningful to them.

 

[George Hatch]

I might be getting it all wrong, but as far as I can tell the imperfections in the market serve to establish certain limitations:

- In terms of the underlying concepts and principles go, we have to start somewhere with our assertions. There has to be a minimum in there somewhere which will always be applicable regardless of the situation and whatever data we're working with.

- How far we're able to take it from there in any given assignment largely IS dictated by the limitations in the data. We will be able to do better with some appraisal problems than with others, but we will still need to have a defensible position even for the most inconclusive outcomes in our processes.

 

[Mike Ault]

Those users have spoken about what is, and what is not, meaningful to them.

And "user desires" will always favor increased commerce over fiduciary responsibility because they're all playing casino with other people's money. "User desires" to eliminate & constrain independent valuations pose systemic risk to our entire financial system and should be heavily discounted by more responsible parties.