Today, we live in a highly charged political climate where truth is often obscured in relative terms. We live in a society where many times people are categorized and labeled inaccurately by the actions of others in their community or profession. A few people or a group of people in a community or profession do or say something resulting in the perception that everybody in that community or profession is of same mindset. The appraisal profession has experienced just that.
I have been in this profession for nearly 50 years. I have seen and witnessed many things. Appraisers are tasked with protecting the public trust, and yet, I have seen appraisers who knowingly and on an ongoing basis disregard facts and truth to provide reports with values or directions in values that advocate the cause of their client. I have weathered seasons marred by valuation professionals whose malfeasance adversely impacted the economy and society. However, after meeting and working with thousands of my fellows over the last half-century, I am convinced that our industry, like every other, will have unethical numbers who do not represent the majority, and I refuse to be lumped in with those unethical few.
The future of the valuation profession is not certain to me. The mission of the valuation professional has always been as objectively as possible to evaluate a property and analyze data to provide credible results that users could rely on to solve problems relating to their specific needs. Technological advances suggest we need to move toward automated valuation models that churn data through automated algorithms to produce valuations. This pressure to replace appraiser analysis techniques with data science rests in part on the assumption that algorithms will mimic the valuations of appraisers without the messy biases and ethical failings that affect human analysis.
For all the value of technology, we would be wise to avoid mistaking these tools for the solution. After all, algorithms themselves are simply tools that enshrine the biases and ethical failings of those who design them. As we improve the efficiency of our business practices, we must guard against also letting technology replace our creative innovation, our flexibility in response to the unforeseen, and most importantly, our unique ability to ethically apply subjective context to blind statistics.
If a user of valuation services finds it necessary to question the development and/or results of a valuation report prepared and signed by a credentialed valuation professional, that client can simply inquire. If inquiry is not productive and they believe an error, grievous error, or many errors have been made, there are numerous other recourses. In short, there are remedies available to the public and users of valuation services to correct inaccuracies or seek recourse and remedy. Where does one go to question or clarify AVMs?
Many advances have been made over the years to enhance techniques for developing real property valuations. Forty plus years ago I was taught to use building residual techniques to develop investment property valuations. Then we refined additional tools, like overall capitalization rates and discounted cash flow techniques. Residential appraisals were developed using the same three approaches currently available, but results were reported on postcards without any significant analysis.
Future technological advancements will certainly enhance the reliability and credibility of valuations for all types of properties.
What I do know is the future or our profession is in the hands of people – people who make judgements that have significant effects on the day to day lives of other people, and the success or failure of business and enterprise.
While the techniques used to develop real property valuations may change or be improved upon, the ethics of the people doing the work will never change. Ethics, therefore, must be a bedrock of our professional community.
We are not perfect by any means and never will be. We have made and will continue to make mistakes. Nevertheless, if our profession is to continue and grow and prosper, we must always seek to find the highest moral ground possible in our daily work and interactions with others by using principles of fairness, integrity, good faith, and honesty.
We need to be a professional community whose collective and individual ethics are beyond reproach. If each of us can strive to conduct our business lives as ethically as we are able, then the future of our profession should be ensured, because we will be recognized as belonging to a unified community whose members share a strong ethical core.
We must be a professional community whose ethics appear to be and are, in fact, beyond reproach. What’s more, we are a forward-looking community, not focused on past mistakes but guided and governed by the best ethical behavior we can muster. Strong ethics is an irresistible treasure seen and felt by our colleagues and clients. If each of us conducts our business lives as ethically as we are able, then the future of our profession will feature a powerful bulwark not easily toppled by markets, politics, or scandal and certainly not reproducible by the most sophisticated of tools.