Gold Supporting Member
- Jan 15, 2002
- Professional Status
- Certified General Appraiser
Inflexible rules stifle innovation. And innovation won't be accepted or even applied marginally so long as USPAP isn't prescient enough to change to allow that. I recall an early class where the instructor said that they used to use the Historical method of value (i.e.- a 4th approach that adjusted the previous sale price up by a time adjustment only) until USPAP didn't allow it. And I belief Ratliff or Babcock used 7 approaches to value and basically thought everything had to be translated into an income approach.
With the electronic age, we are able to understand less and less of our world. So this specialized knowledge continues to be buried further and further into the bowels of an office full of quants. Tax preparers used to use tables to calculate income taxes. Today the computer does it...I would hate to see the work of a tax preparer who tried to do the form 1040 for a semi-complex return. As with our appraisals, they are far more detailed and complex than when I started and 10x that of the 1950s era. But is that complexity necessary? Or simply an outgrowth of scope creep possible because the technology can do it whereas we couldn't have done an appraisal in 1950 on a typewriter anywhere equivalent to that possible with software.
The reason I never went back to the oil patch was that within 5 years the technology has advanced so far, I was completely out of the loop. Computers wrote the things I did with a LeRoy lettering set and ink. Analog chart recorders were replaced with computer generated logs. I barely recognized the instrumentation when I went back for a few jobs 10 years after I had left the industry. I was obsolete. And the skill set I had is completely ignored today. A friend who stayed in the biz told me recently that he had a wellsite geologist on a well in N. Texas who was completely worthless, had no clue as to what he was seeing and was only familiar with horizontal drilling which consists of mostly drilling in a shale zone. He couldn't pick the top of formations that were a piece of cake. Didn't really understand a well being vertically drilled and missed the pay zone, which they only detected on the electric logs. Apparently his gas detectors were not even working.
I keep saying it and you keep ignoring it. There's nothing in USPAP that prohibits appraisers from adding a 4th approach to value. There is no upper limit to the SOWR. The SOWR only refers to the minimums of a SOW decision.