The word "Average" in the improvements section - possible bias?

[Mejappz]

That video pretty much sums up the state of the industry. Lol

 

[DWiley]

It makes sense for them to list code/bias words - but not to label simple comparison terms like good or average subjective.

That is not just a label. Those terms are subjective. And, there is no prohibition on their use, as long as one provides proper context. It would probably take me far less time than it has taken some to post in this thread to craft language that would meet the requirement for context.

 

[RCA]

Most of the No No words labled by GSEs, I don't use. So no big deal and rather common sense not to use it.
I can see some having a problem for those who use coded words.

I am going to predict that eventually there will be two levels of appraisal:

1. The traditional appraisal, which will be protected from accusations of impropriety, by a kind of agreement that if a user of an appraisal report is dissatisfied with the report, he agrees to pay for an "Advanced Appraisal Report" - based most likely on MARS regression and some constraint based method. The fee will like likely be triple or quadruple the normal appraisal fee. The rules for the traditional appraisal will be between the property owner, lender and GSEs. With or without the intervention of an AMC.

2. The lender and GSE's would have to agree to accept the results of the Advanced Appraisal Report, if it is requested, under the assumption that the GSEs have received a Traditional Report that satisfied their guidelines, except for the final value conclusion.

3. If the lender or paying client of the Advanced Appraisal Report is dissatisfied with it in any way, - they can also challenge it in court (no the State can't be required or forced to give more than a cursory review of such a report) - but that would be a very difficult and expensive undertaking, ..... due to its complexity, and due to the fact that the appraiser is probably in this case the best expert around. Another expert with expertise in the subject market area, R, and non-parametric statistics would be indeed very difficult to find.

4, And the appraiser who did the Advanced Appraisal, will of course be in the strongest position in such a lawsuit - as he will likely be the one best expert on that particular report. --- Well, evenutally, I suppose, they will be able to run these reports though an AI system like Claude to get an opinion. But the appraiser himself can do that as well.

5. I would add that AMCs need to be taken of out of the picture, especially with respect to Advanced Appraisals. They simply do not have the required competence, nor are ever likely to.

 

[J Grant]

That is not just a label. Those terms are subjective. And, there is no prohibition on their use, as long as one provides proper context. It would probably take me far less time than it has taken some to post in this thread to craft language that would meet the requirement for context.

Then why didn't Fannie and Freddie declare those terms subjective for all these years?

I understand you have to support the party line, but it is nonsense. The misleading or incompetent use of those terms makes it subjective., in a pejorative sense. The terms/words by themselves are merely descriptive words. How are we supposed to make narrative comments about a sales Comparison without using words to compare the properties or areas?

I have no problem providing an explanation of context for using them, but the GSEs have taken it upon themselves to only recently call these words subjective; nowhere else in appraisal are they defined as such. We can accept that it is a bureaucratic decision.

Appraisers analyze and make judgment calls based on the market. Calling that process, which is the heart of appraising "subjective" IMO is just a gateway for the excuse to not use appraisals -what appraises offer is that very ability to communicate the results in plain English to the reader and give commentary and narrative to make them understand how or why an adjustment was made or not made or why a comp was selected or ex eluded. Which is the very thing an AVM can not do.

 

[Tom D]

Could the word average be even appropriate for this group of graduates, bad timing for these poor souls who wanted to be in this death spiral profession. Just like having a BA degree in art study.
But they apparently have r.e. sale experience which is a good place to start, like many of us did.

From Appraisal Foundation. I am absolutely delighted to share that last month, AI-PAREA celebrated its first six graduates!

In talking to Sandy Adomatis, 2024 President of the Appraisal Institute, she shared "The first six graduates of AI-PAREA are to be congratulated for their hard work in passing the first of its kind virtual appraisal training program. It took more than two years to develop the program that emulates the practical appraisal experience one would receive from a supervisor. AI-PAREA is not easy and requires participants with perseverance to complete many hours of work after completing 150 hours of qualifying education.

 

[djd09]

That is not just a label. Those terms are subjective. And, there is no prohibition on their use, as long as one provides proper context. It would probably take me far less time than it has taken some to post in this thread to craft language that would meet the requirement for context.

who the **** are you...the word policeman

 

[DWiley]

Then why didn't Fannie and Freddie declare those terms subjective for all these years?

I understand you have to support the party line, but it is nonsense. The misleading or incompetent use of those terms makes it subjective., in a pejorative sense. The terms/words by themselves are merely descriptive words. How are we supposed to make narrative comments about a sales Comparison without using words to compare the properties or areas?

I have no problem providing an explanation of context for using them, but the GSEs have taken it upon themselves to only recently call these words subjective; nowhere else in appraisal are they defined as such. We can accept that it is a bureaucratic decision.

Appraisers analyze and make judgment calls based on the market. Calling that process, which is the heart of appraising "subjective" IMO is just a gateway for the excuse to not use appraisals -what appraises offer is that very ability to communicate the results in plain English to the reader and give commentary and narrative to make them understand how or why an adjustment was made or not made or why a comp was selected or ex eluded. Which is the very thing an AVM can not do.

You keep saying they are not subjective - so then give us the objective definition of "average" that is universally used by appraisers. You cannot do that because as this very thread has well illustrated different appraisers use that word to mean different things.

You asked - How are we supposed to make narrative comments about a sales Comparison without using words to compare the properties or areas? I have already answered that question multiple times. All that is necessary is to provide explanation of how you are using that term.

If it were me, I would simply include definitions of those terms in my report, and then rate according to those definitions. Given that you think good, average, fair, etc. are such well understood terms, it should not be difficult to provide definitions.

 

[DWiley]

who the **** are you...the word policeman

The regulators have made crystal clear that lenders and those who purchase loans from lenders can be found to be in violation of fair lending laws if they rely on appraisal reports that they know, or should have known, are discriminatory, based on the language used in those appraisal reports.

See example G page 10 - https://www.fhfa.gov/sites/default/... Fair Lending and Fair Housing Compliance.pdf

Taking action to prevent that risk for the lender or the investor is simply good risk management.

 

[djd09]

....the little liberals cannot even figure out what is man and what is a woman...their little brain must be spinning on the word average

 

[djd09]

The regulators have made crystal clear that lenders and those who purchase loans from lenders can be found to be in violation of fair lending laws if they rely on appraisal reports that they know, or should have known, are discriminatory, based on the language used in those appraisal reports.

See example G page 10 - https://www.fhfa.gov/sites/default/files/2023-07/AB 2021-04 Enterprise Fair Lending and Fair Housing Compliance.pdf

Taking action to prevent that risk for the lender or the investor is simply good risk management.

the dei days are almost done...but here is the law...congress cannot prohibit or abridge the free exercise of speech...do you understand???