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How Do You Know? — Evidence, Judgment, and the Income Approach
How do appraisers know what they claim to know?
That simple question lies at the heart of professional real estate appraisal, yet it is rarely asked. In this episode of The Appraiser’s Advocate, Timothy C. Andersen, MAI, explores one of the profession’s most common assumptions: that the income approach is generally not applicable to owner-occupied single-family residences.
Rather than arguing for or against the income approach, this discussion asks a deeper question: What market evidence supports that conclusion? Is the decision based on market analysis, market participant behavior, and USPAP-compliant appraisal methodology? Or has it simply become accepted through tradition?
This podcast draws from USPAP, The Appraisal of Real Estate, housing economics, behavioral economics, and the philosophy of Socrates. It also examines how appraisers develop credible opinions of value through professional judgment, critical thinking, and evidence-based appraisal. Along the way, it introduces concepts such as judgment under uncertainty, market-supported conclusions, highest and best use, reconciliation, market participant analysis, and the importance of testing assumptions before accepting them.
Whether you are a real estate appraiser, review appraiser, lender, attorney, state appraisal board member, USPAP instructor, or valuation professional, this discussion challenges you to think beyond forms and checkboxes. It argues that appraisal is not bookkeeping—it is the disciplined interpretation of market evidence in the pursuit of a credible opinion of value.
The question is not whether the income approach should always be developed.
The question is far more important:
How do you know?