Appraisers' Free Forum

In an earlier thread in this section, I quoted a section of an appraisal report. Many responses complained that it showed personal bias. It also had an adjustment based on appraiser's judgment, and everyone who responded agreed that was OK if it were properly explained.

So what's the difference between personal bias and appraiser's judgment? Both are based on the appraiser's personal impressions.

Any thoughts?

One follows feelings the other does not. One is rational and can be documented, the other is not and cannot.

A blatant personal bias would be things like disliking a house for it's blue carpet or a nasty owner. Pretty easy to identify and avoid this type of bias.

A more subtle form is disliking a house for it's type or layout because it is just not your favorite. Many of us have probably succumbed to this bias on a sub-conscious level without even realizing it.

Note I use the negative above but bias can be positive too.

Judgment to me falls more into the area of knowing something is positive or negative, but not being able to quantify it with hard evidence.

Judgment of a feature to be positive or negative can usually be backed up by a simple poll of market participants. IE:No one can really say a dollar figure or if they would even pay for a feature, but they all say that they would prefer (or dislike) house A over house B because of X.

I think that judgment should almost always be qualitative and is often the more applicable adjustment than we care to acknowledge.

In my limited experience, judgment comes into play on unique and/or uncommon features.

One of the enduring problems with both bias and judgment is the tendency to confuse design elements with real features. Just because I like the 30' tall field stone fireplace does not mean the next person will.

bi·as
2. a. A preference or an inclination, especially one that inhibits impartial judgment.
b. An unfair act or policy stemming from prejudice.

judg·ment also judge·ment
1. judgment-judgement - the legal document stating the reasons for a judicial decision; "opinions are usually written by a single judge"
2. judgment-judgement - an opinion formed by judging something; "he was reluctant to make his judgment known"; "she changed her mind"
3. judgment-judgement - the cognitive process of reaching a decision or drawing conclusions
4. judgment-judgement - the mental ability to understand and discriminate between relations
5. judgment-judgement - the capacity to assess situations or circumstances shrewdly and to draw sound conclusions
6. judgment-judgement - (law) the determination by a court of competent jurisdiction on matters submitted to it
7. judgement - the act of judging or assessing a person or situation or event; "they criticized my judgment of the contestants"

Emphasis added to those two lines as I felt it was most appropriate and pertinent to the quesiton.

IMO, a bias is a preference (for or against), whereby judgment is based upon experience, information, facts and knowledge without regards to a preference. At least, that's the way I see it.

Many years ago (early 1990's) we had a decorator put in a carpet that was somewhere between a crimson and violet. She said it needed some color, and to match the bold wall paper in the secondary bath off the hall. Dad and I hated it, and was worried about how it would affect the sale. Some loved it, some hated it... but it wasn't on the market but 60 days before it sold to an older lady who loved the bright colors. Would I do that again? No, I've found that a house sells no matter if it has custom colors or is builder white... so why pay extra for the custom colors? All buyers want is a clean house that looks and smells fresh and new. But despite that house not being of my personal taste, it fit the bill for this buyer. So I lean more towards condition than I do decor... so long as they didn't do something really stupid like painting the roof with yellow brick road oil based paint.

It's semantics.

Personal bias, not ok. Professional judgement (or professional bias) is ok.

Bias is from the heart, judgement is from the head.

skibs wrote:Bias is from the heart, judgement is from the head.

I dunno....it seems most adjustments are pulled out of their ASS.

santa wrote:

skibs wrote:Bias is from the heart, judgement is from the head.

I dunno....it seems most adjustments are pulled out of their ASS.

My experience is leading me to think that may just be the primary source of adjustment support for the entire industry that serves the cheaper-faster mortgage crowd. At least the guys who report their personal biases are being honest if not objectve.