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“Support my opinion? Why?! It’s an opinion, not a fact!” It is true that we appraisers are paid for our opinions. What a way to make a living, right? Yet, there is an opinion that is little more than a wild-ass guess. Then there is an opinion based on facts. An appraiser’s professional opinions should be based on facts, right? On what else should we base them? How about market evidence? Could we base them on properly verified data? Should those data be relevant to the appraisal question? Should those data be neighborhood-specific? If not, could they be market-general? What about older data? Will those benefit the client?
There are so many answers to these questions? So, must I support my opinion? That answer is YES! OK, you don’t have to support a wild-ass guess. But is there a place for a wild-ass guess in a real estate appraisal? That answer is NO! Our lender clients look to use to inform them of risk. What are the risks of investing in a mortgage in neighborhood X? That is what our lender clients want to know. They are not all that interested in our value conclusions. They know a property’s value by the time the potential buyer gives the loan officer the address of the property they want to buy. What are clients need is a way to make them smile! How do we do that? By giving the clients the facts, and then telling them why those facts are important to an understanding of the risks inherent in that neighborhood. Not only do we tell them what is happening, but we tell them why it is happening, too.
So, when you ask, “Do I have to support my opinion?, Yes, you do. Because an AVM is after your job!