OCTOBER 16, 2019 – The following is from Ray Dozier. He has developed the ValuExpose system. The focus is on appraisal development. Not appraisal reporting like all of the other products out there. You might find this approach unique to anything else you have seen.
Some caveats….I am not financially involved with this product. Just posting because I think appraisers will be interested in it. Also, I have not edited anything Mr. Dozier wrote. His thoughts are his own and I am not agreeing or disagreeing with anything he says. Again, I just feel this is a product that appraisers might be interested in trying out….also clients might interested, too.
The traditional “old school” appraisal process is still
successful and relevant in reducing the risk of arriving at an
accurate current “as is” market value based on the collective
market’s most probable selling price. So what’s the paradox
of this “old school” process?
This answer is the “old school” appraisal process is valuing
properties in a vacuum. This means the process uses
comparable sales and data that are potentially “infected” with
the market’s irrational exuberance regarding forecasting. A
property’s current “as is” market value is the present value of
what the collective market is forecasting during the current
market cycle, including an ending sale price forecast. If these
forecasts have little probability of coming true and are
irrational, then comparable sale prices and data used in
comparison to an appraised property will “infect” the
appraised property’s “as is” market value with the same
The frustration in the appraisal industry is that if appraisers
try to “adjust” the comp sales for the markets irrational
forecasts the resulting “as is” market value will be lower then
the probable selling price that can be expected by the
collective market participants.
On the other hand, if the appraiser accepts the market’s
irrational forecasts and resulting sale prices as comparison to
to the subject property, the “as is” market value opinion
could also be misleading and potentially detrimental to the
client and the public good if this value collapses in the near
In the first case, if appraisers inject their bias into the
collective market’s forecasts they are “leading” the market
instead of “reflecting” the market’s pricing of properties. This
is considered a USPAP (Uniform Standards of Professional
Appraisal Practice) violation.
In the second case, if the appraiser reflects the actual
forecasts of the collective market for any given property as
required by USPAP standards, the resulting “as is” market
value might be misleading and a detriment to his client during
the current market cycle.
Herein lies the paradox and frustration between providers of
appraisal products and users of these products.
As a solution, the valuation industry’s response to this
paradox is to provide longer narrative appraisal reports,
faster report writing software, CRM’s for greater appraisal
management, black box non-transparent AVM’s, hybrid
appraisal development and faster delivery times. Notice that
none of these solutions are dealing with the paradox.
As a result, solutions the users of appraisal products have
enacted in response to the valuation industry’s failure in
solving the paradox is to raise the de minimus limits which is
eliminating the requirement for an appraisal altogether;
allowing lenders to petition for an appraisal exclusion in rural
areas; allowing non licensed appraisers to perform BPO and
Evaluations; and most recently allowing a shortened
Restricted Reports to lenders and multiple users of the report
according to the most receipt USPAP 2020 update.
All these “solutions” from the valuation industry and the users
of valuation products are not dealing the appraisal paradox or
providing practical solutions. Instead these “solutions” are
actually making matters worse in further endangering the
clients and the public trust.
What is a practical solution in solving the appraisal paradox?
Any solution needs to satisfy the concerns of both sides
within the context of better informing clients of all the risks
as well as better protecting the public good.
These solutions first need to modernize the “old school”
appraisal development and reporting process through
• First, continuing to support the appraiser in
“reflecting” and not “dictating” the markets
forecasting and pricing of properties in the
• Create new methodologies that go beyond a singlepoint-
in-time “as is” market value opinion by
uncovering any hidden risks or opportunities
associated with an otherwise well supported market
• Automation of the appraisal process will inform the
clients of all the collective market forecasts of the
otherwise well supported “as is” market value opinion.
This includes the ending sale price or reversion for
income producing properties that’s forecasted by the
collective market participants.
• Standardize the “old school” fragmented appraisal
process by automating and integrating all valuation
approaches and appraisal techniques that are
appropriate for each specific property.
• Automation of the appraisal process creates a
dynamic “live” development of the appraisal process
instead of the “old school” static development of the
appraisal which currently remains as a pile of papers
in the appraisers files.
• Dynamic “live” appraisal developments can be linked
to an automated value sustainability analysis that
further analyzes the otherwise well supported “as is”
market value. This type of methodology solves the
paradox between providers and users of appraisal
• Dynamic “Live” and transparent appraisal
developments reduce the unnecessary need to
produce duplicative long narrative appraisal reports.
Traditionally, the purpose of the appraisal report was
simply to prove the appraiser properly developed the
• Dynamic “Live” appraisal developments can be
reviewed easier and are more collaborative due to real
time value changes as market forecasts change or
other input is changed.
• Dynamic technology increases the delivery speed to
the client of the completed developed appraisal other
than just emailing the finished report to the client. The
client will better be able to follow the appraisal
process to the appraiser’s concluded value.
• Technology increases the quality of the appraisal
development through standardization of the appraisal
process and linkage of appraisal methodologies and
processes (not to be confused with appraisal
• For those clients that continue to want an “old school”
appraisal reporting, the dynamic “live” appraisal
development provides greater flexibility in reporting
appraisal product options. A variety of shorter
appraisal reports can be offered the client without the
risk the appraiser didn’t fully develop the appraisal.
• Dynamic “live” appraisal developments gives greater
flexibility in appraisal pricing based on the client’s
specific needs without sacrificing the interests of the
client and the public good.
Transforming the “old school” fragmented appraisal process
to a modern integrated and standardized process solves the
appraisal paradox. It also solves the clients demand for faster
deliveries, better appraisal development quality and offers a
variety of new reporting options that lowers the costs of
appraisal products depending on the clients needs.
These new reporting options also should not reduce the
appraisers profit margins or appraisal quality due to the
demand for increased speed, transparency of appraisal
development and shorter appraisal reporting options.
The U.S. is approaching the end of the current market cycle
that is the longest recovery in U.S. history. Typically, near the
end of a market cycle “stupid money” market participants will
infiltrate the collective market for many property types and in
selected markets. Don’t wait for a possible severe recession
in implementing these safeguards and best practices into
your appraisal practice.
This new appraisal technology is now available after years of
development. ValueXpose was created by designated
Appraisal Institute members with over 40 years commercial
appraisal domain experience.
Check out how you can use this newest technology to better
serve your clients and better protects the public good. Go to
www.valuexpose.com and request a demo on the websites