Appraisers' Free Forum

(Don't....go...there...don't...go...there...)

I understand your concerns about my suggestion. I assume that you also have concerns about enforcement actions which require an appraiser to merely sit through a course in highest and best use or some other aspect of the profession.

I have previously identified that I understand there are different methods of solving a problem, not all of them commonly used. However Std 1-1(a) requires that we solve the problem using recognized methods and techniques. When does a method or technique become recognized? I would think that occurs when it is taught by a nationally recognized education provider. Alternative methods of solving the problem are best discussed and tested by academicians until such time as they become widely accepted as being relevant to solving the problem at which time they should be incorporated in appraisal education.

As USPAP requires the use of recognized methods and techniques, what would be an appropriate course of action by an enforcement agency during an enforcement action against an appraiser who uses a technique which is not recognized by the profession? Whether the results of that unrecognized technique are consistent with the assignment results using recognized techniques or not is irrelevant to the question. It is not the enforcement agency's purpose to test the unrecognized technique to determine if the results are a fluke or not.

Pina Colada wrote:

I think it would be obvious to anyone that defintion 1, loss in value (V2 – V1), is not the same as defintion 2, a loss in cost (C - V1). Remember the environment controlled by a principle that says C is not V. So calculations based on C (losses to cost) should not be referred to as calculations based on V (loss of value) - nor should they be expected to produce the same results.

With regards to the "cost does not equal value" phrase, given the information brought forth in this discussion, one has to wonder if this statement is documented economic theory or urban appraisal myth. Cost may not equal market value, but it certainly equals insurable value. Perhaps the confusion centers around this phrase.

Kenneth Brown wrote:With regards to the "cost does not equal value" phrase, given the information brought forth in this discussion, one has to wonder if this statement is documented economic theory or urban appraisal myth. Cost may not equal market value, but it certainly equals insurable value. Perhaps the confusion centers around this phrase.

As to your foray into insurable value, I don’t follow. We were talking about obsolescence which relates only to exchange value, not insurable value. And I don’t believe I (ever) made the bolded assertion you put into quotes. In an exchange context, cost is not value, but of course they could turn out to be mathematically equal. It's like shoe size isn't IQ, but they could be mathmatically equal.

Pina Colada wrote:Remember the environment controlled by a principle that says C is not V.

Kenneth Brown wrote:With regards to the "cost does not equal value" phrase, given the information brought forth in this discussion, one has to wonder if this statement is documented economic theory or urban appraisal myth. Cost may not equal market value, but it certainly equals insurable value. Perhaps the confusion centers around this phrase.

Pina Coloda wrote:As to your foray into insurable value, I don’t follow. We were talking about obsolescence which relates only to exchange value, not insurable value. And I don’t believe I (ever) made the bolded assertion you put into quotes. In an exchange context, cost is not value, but of course they could turn out to be mathematically equal. It's like shoe size isn't IQ, but they could be mathmatically equal.

I guess I was confused...