Reengineering the appraisal: a return to fundamentals
A Presentation for the Collateral Risk Network Meeting

David Valdez/US Department of Housing and Urban Development

Article Highlights

  • The US is the world leader in distortionary housing policy interventions

    Tweet This

  • Relationship between market value based on comparable sales analysis and rental income should always be taken into account

    Tweet This

  • Return property appraising to its core function--assisting lenders in determining the max amount they may be lent on a property

    Tweet This

Reengineering the Appraisal: A Return to Fundamentals

Download PDF

  • The relationship between market value based on comparable sales analysis and rental income should always be taken into account.  
  • In order to not start with the answer (sales price) this requires reporting a sales price range.
  • The comparable selection process must be transparent to the users.  
  • This process could be improved by identifying all appropriate comparables and using statistical techniques to help the appraiser select and reconcile all appropriate comparables. 
  • A collateral experat at the ledner should determine loan terms based on a review and analysis of market and stabilized values.
  • Only by taking steps such as these can property appraising return to its status as a profession and to its core function: assisting lenders in determining the maximum amount that may be prudently lent on a property. 
Edward Pinto is a resident fellow at AEI
Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Edward J.
Pinto

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 27
    MON
  • 28
    TUE
  • 29
    WED
  • 30
    THU
  • 31
    FRI
Monday, October 27, 2014 | 10:00 a.m. – 11:30 a.m.
State income taxes and the Supreme Court: Maryland Comptroller v. Wynne

Please join AEI for a panel discussion exploring these and other questions about this crucial case.

Tuesday, October 28, 2014 | 9:30 a.m. – 12:15 p.m.
For richer, for poorer: How family structures economic success in America

Join Lerman, Wilcox, and a group of distinguished scholars and commentators for the release of Lerman and Wilcox’s report, which examines the relationships among and policy implications of marriage, family structure, and economic success in America.

Tuesday, October 28, 2014 | 5:30 p.m. – 7:00 p.m.
The 7 deadly virtues: 18 conservative writers on why the virtuous life is funny as hell

Please join AEI for a book forum moderated by Last and featuring five of these leading conservative voices. By the time the forum is over, attendees may be on their way to discovering an entirely different — and better — moral universe.

Thursday, October 30, 2014 | 2:00 p.m. – 3:00 p.m.
A nuclear deal with Iran? Weighing the possibilities

Join us, as experts discuss their predictions for whether the United States will strike a nuclear deal with Iran ahead of the November 24 deadline, and the repercussions of the possible outcomes.

Thursday, October 30, 2014 | 5:00 p.m. – 6:15 p.m.
The forgotten depression — 1921: The crash that cured itself

Please join Author James Grant and AEI senior economists for a discussion about Grant's book, "The Forgotten Depression: 1921: The Crash That Cured Itself" (Simon & Schuster, 2014).

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.