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USPAP, analysis, and synthesis are terms we do not hear all that often. That’s a shame, too. This is because, according to USPAP, a credible appraisal and a non-misleading report are the results of analysis and synthesis. Yes, Standard One is the appraisal development standard. And Standard Two is the appraisal reporting standard. But we know this, so what is so special about analysis and synthesis?
Under USPAP, analysis and synthesis are necessary opposites. To analyze means to deconstruct something, or to take something apart. On the other hand, to synthesize means to (re)assemble something – ideally into something new, or that which did not exist before that synthesis created it.
Appraisers analyze markets by taking them apart. They analyze subject properties by taking them apart (usually via the cost approach. This is why there should always be a cost approach for a single-family residence appraisal. We take markets apart to be able to understand them, then use that understanding to predict trends. We take comparable sales apart to understand, via the Principle of Substitution, which components of market value apply to the subject. Finally, we take the subject apart to conclude which components the market demands and which it does not. These latter components are those that are super adequate and functionally obsolete.
But that which appraisers have taken apart, appraisers must assemble. This assemblage is also called synthesis. But appraisers do not merely reassemble the parts. Rather, they assemble the parts into something new, something that did not exist before. From what they took apart, they synthesize to arrive at a market value opinion. The opinion was nowhere to be found since it did not exist until the appraiser formed it in his/her head.
So, USPAP, analysis, and synthesis are the appraisal process. It’s just that appraisers typically do not look at that process in that way.