by Timothy Andersen - USPAP Instructor
Tim Andersen, The Appraiser’s Advocate, enlightens you on all things related to Real Estate Appraisal
Language
🇺🇲
Publishing Since
5/18/2020
Email Addresses
1 available
Phone Numbers
0 available
April 15, 2025
USPAP, Verification, and Bernoulli's Fallacy. That's a mouthful! What does it mean? I'm assuming you've heard of USPAP. Verification is an important component of USPAP's SR1-4 (learn it, love it, use it). But it is likely Bernoulli's Fallacy is something you don't know about. Yet. You will, though. It is going to become really important in residential real estate appraisal, especially when UAD3.6 takes effect in November of 2026. Read on to learn why.<br /> <br /> Really <a href="https://theappraisersadvocate.com/">USPAP</a>, verification and Bernoulli's Fallacy go together. USPAP's Standards Rule 1-4 requires us appraisers to "...collect, verify, and analyze all information necessary for credible assignment results." As with a lot of USPAP, this is not overly clear (hello, ASB!). Bernoulli's Fallacy says, in so many words, in statistical inference, people often wrongly assume that a single event, or a small number of observations, directly reveals the underlying probability of a process. We see this all the time from clients. Most houses in a subdivision sell for between $300K and $350K. Yet the one with the premium view and the kitchen upgrades that sold for $393K gets all their attention. If the subject is your basic house in the neighborhood, then its value is somewhere between $300K and $350K, that one outlier notwithstanding. One outlier's price does not predict market value, despite what the client demands.<br /> <br /> USPAP, verification, and Bernoulli's Fallacy are a package deal. USPAP demands verification and we avoid Bernoulli's Fallacy by being very skeptical about the predictive value of one or two outliers. This will become even more important as UAD3.6 kicks in and appraisers will need to write more in their appraisal reports. Are you preparing for that?<br /> <br /> Questions? Contact me at [email protected]. Need <a href="https://fgcclaw.com/attorneys/craig-m-capilla/">legal help</a> or information on <a href="https://orep.org/">E&O insurance</a>. I can help you with those, too.
March 10, 2025
USPAP and choosing comps is likely a poor name for this <a href="https://theappraisersadvocate.com/real-estate-appraisal-podcasts/">podcast.</a> It's a poor name since USPAP's Standard One is silent on the choice of choosing comparable sales. In fact, all Standard One (see SR1-4(a)) says about the sales comparison approach consists of twenty-seven words. None of them is the word comparable, nor the words comparable sales. So, no, Standard One in USPAP is not a reliable source relative to choosing comparable sales.<br /> <br /> However, USPAP and choosing comps in made easier in the context of the Comment to SR1-3(b). This is USPAP's Market Analysis and Highest and Best Use Standards Rule. In that Comment is the admonition the appraiser "...must analyze the relevant legal, physical, and economic factors to the extent necessary for credible assignment results." So, if there is a <a href="https://appraiserelearning.com/product/selecting-and-supporting-market-adjustments/">model</a> for choosing a comparable sale, it is that such a sale must have the same relevant legal, physical, and economic characteristics as the subject. In turn, this means appraisers must understand the subject's legal, physical, and economic factors before it is possible to understand those of competing sales, thus before it is possible to choose comps.<br /> <br /> So, since USPAP and choosing comps seems to be an incompatible pairing, is there another model to use as part of the process of choosing comparable sales? Indirectly, yes, there is. One of the difficulties we face in this task is that there is no formal definition of a comparable sale. There are merely descriptions. A careful reading of The 15th ed. of the Appraisal of Real Estate shows that a common description is that a comparable sale is one that has the same highest and best use as the subject.<br /> <br /> And remember to have an experienced <a href="https://fgcclaw.com/attorneys/craig-m-capilla/">attorney</a> on your speed-dial, and your <a href="https://orep.org/">E&O</a> insurance up to date!
February 10, 2025
<a href="https://theappraisersadvocate.com/">USPAP</a> does not specifically use the term, "...from your workfile..." However, you'll find your state appraisal board does. In fact, you'll find the board uses this phrase a lost. Given that, let's spend some time on what the phrase means how we appraisers must comply with it.<br /> <br /> "From your workfile" means just that. Under USPAP's Standard 1, the appraiser has the ethical obligation to have enough materials, data, analyses, and so forth to support everything. In this instance, everything means every conclusion, statement of fact, opinion, etc. A lot of appraisers ask why this is necessary. To support everything from the data, analyses, and information in the workfile means the appraiser acted objectively. Each opinion, conclusion, and so forth merits objective, market-based support. If the market does not support a conclusion, if there is even a hint of subjectivity in a highest and best use or value opinion, then its credibility is fatally flawed.<br /> <br /> What about phone messages? How is it possible to get those from the workfile! Simple. When you verify a sale, take notes on that call. Who? What? Where? When? Why? How? When you have the answers to those questions, you are home free. Brokers won't return your phone calls? Then send an email with this statement, "I know you are busy. So, if you do not respond to this email, I'll assume the facts of this transaction are as you noted them in the MLS." Then, make sure your workfile has a copy of the deed, mortgage, survey or plat, zoning classification and code, and everything else the County/Parish has on the subject. This supports your objectivity.<br /> <br /> And remember, make sure you have great <a href="https://orep.org/">E&O insurance</a> on your side, as well as a <a href="https://fgcclaw.com/attorneys/craig-m-capilla/">great attorney</a>.
Bryan Reynolds
The Appraisal Foundation
Appraisal Buzz
Dustin Harris
Blaine Feyen
Jeff Hicks
iHeartPodcasts and Paramount Podcasts
Comedy Central
Ramsey Network
Jason Bateman, Sean Hayes, Will Arnett
Michael Hobbs
iHeartPodcasts
Audacy
NPR
The New York Times
Pod Engine is not affiliated with, endorsed by, or officially connected with any of the podcasts displayed on this platform. We operate independently as a podcast discovery and analytics service.
All podcast artwork, thumbnails, and content displayed on this page are the property of their respective owners and are protected by applicable copyright laws. This includes, but is not limited to, podcast cover art, episode artwork, show descriptions, episode titles, transcripts, audio snippets, and any other content originating from the podcast creators or their licensors.
We display this content under fair use principles and/or implied license for the purpose of podcast discovery, information, and commentary. We make no claim of ownership over any podcast content, artwork, or related materials shown on this platform. All trademarks, service marks, and trade names are the property of their respective owners.
While we strive to ensure all content usage is properly authorized, if you are a rights holder and believe your content is being used inappropriately or without proper authorization, please contact us immediately at [email protected] for prompt review and appropriate action, which may include content removal or proper attribution.
By accessing and using this platform, you acknowledge and agree to respect all applicable copyright laws and intellectual property rights of content owners. Any unauthorized reproduction, distribution, or commercial use of the content displayed on this platform is strictly prohibited.