Opinions of Value

Your source for appraisal news and trends

Appraisal Bias: Taking Action, Leading the Conversation

by Leave a Comment

As the summer ends, I hope you’ve had time to do the things you enjoy with friends and family. One of my favorite things I look forward to this time of year is the start of college football. As a life-long suffering South Carolina Gamecock fan, it is difficult experiencing annual renewed optimism and then watching reality set in with yet another disappointment. However, I would not trade the fellowship and love of the school and game for simply winning. As the adage goes, “There is always next year.”

[Read more…]

AI Taking Big Steps Toward Achieving Strategic Plan Goals

by

One thing you might notice about me is my affinity for bow ties. I was required to wear a tie and blazer every day during middle and high school, so I became accustomed to a more formal look day-to-day. About 10 years or so ago, I noticed more folks wearing a bow tie and got interested in them. It took a few years to get bow ties worked into my wardrobe and they are now the standard. Tying a bow tie is an art and when properly tied (it should not look perfect), a bow tie adds more personality to my look and sets me apart from the traditional tie wearers.

FWIW, earlier this year, I was required to wear a traditional necktie for an event and chose one from about 20 years ago. It took me four or five tries to properly tie it. Funny how quickly I forgot something I have done hundreds of times. There is no substitute for repetitive learning.

Whether it’s in your attire, your work life, your home life, or your hobbies, I’d encourage each of you to find a way to stand out and make a difference. They say the squeaky wheel gets the grease, so make sure to make yourself – and your priorities – known by standing out and setting yourself apart in a meaningful way.

This month, I’m pleased to share with you some updates about the Appraisal Institute’s priorities and the work we’re doing to ensure that our organization continues to stand out in the valuation profession.

AI Taking Big Steps Toward Achieving Strategic Plan Goals
I am proud to share that the Appraisal Institute has worked hard toward achieving the goals outlined in the Strategic Plan adopted by the AI Board of Directors in August 2021. We have taken some key steps over the past few months, and I’m pleased to share these updates with you.

  • Modernize AI’s education delivery system and products. Outside consultants with significant expertise in this area have completed studies, and their recommendations for processes and delivery are being evaluated. Implementation is expected to begin soon and will initially focus on the AI website, the event registration process and the overall user experience.
  • Modernize technology, such as social media and communication methods, and a review of the website. These efforts will focus on a campaign to refresh the AI brand, social media, communications and the website. We have identified an outside firm to handle the rebranding campaign and website redesign. Changes to the website will include an updated look and feel and, equally important, an enhanced user experience. AI’s Communications Department has already implemented changes to its social media and communications efforts, and will continue to focus on generating more visual content and enhanced interaction to appeal to a wider audience.
  • Develop a plan to recruit and retain AI professionals. A recruitment and retention plan will follow AI’s new branding and messaging, and will involve input from the Residential Appraiser Project Team, among others.
  • Implement PAREA. Development and testing are underway and will continue for the next several months.
  • Develop a DE&I action plan. A DE&I statement was adopted last year, and I have more exciting news to share below on the DE&I front.

I’m very proud of the excellent work that’s been done so far and excited about what it all means for the future of the Appraisal Institute and the valuation profession as a whole. Read more in the latest issue of Valuation magazine.

DE&I Action Plan Recommendations
As you’ve likely heard, the Appraisal Institute Board of Directors at its Nov. 11-12 meeting approved the Strategic Plan strategies that will guide the organization’s efforts in 2022, and beyond. The organization will pursue those goals with a focus on five Board-approved strategies, including development of a DE&I Action Plan.

A Project Team comprised of AI Designated Members, in collaboration with an outside consultant, spent several months developing a DE&I Action Plan, including recommendations, that the Board reviewed and discussed during its third quarter meeting. The Action Plan and recommendations include input from AI membership, which was provided via survey responses and stakeholder interviews.

The Appraisal Institute’s Strategic Plan includes goals to provide leadership toward a unified and inclusive profession with diverse perspectives and to improve the diversity of its affiliated professionals. The approved recommendations represent a significant step forward as the Appraisal Institute continues to pursue these important goals.

As these recommendations are investigated and components of the plan implemented, we’ll continue to keep membership informed accordingly.

Check out other updates from the Board meeting.

Paula Konikoff Elected 2023 AI Vice President
Congratulations to Paula K. Konikoff, JD, MAI, AI-GRS, who was elected 2023 Appraisal Institute vice president by its Board of Directors during the Board’s Aug. 4-5 meeting in Las Vegas.

Konikoff’s one-year term as vice president will begin Jan. 1, when she’ll also serve for one year as chair of the Finance Committee. She’ll serve as president-elect in 2024, president in 2025 and immediate past president in 2026.

Learn more about Paula Konikoff.

Appraisal Institute Honors 15 of the Best and Brightest in the Profession
It was my privilege to celebrate and honor the contributions of 15 individuals who make a big difference in our profession during the Appraisal Institute Annual Conference earlier this month. Attendees celebrated the award winners at an Aug. 3 luncheon sponsored by Appraisal Institute Education and Relief Foundation. Congratulations to the following individuals:

Appraisal Institute awards:

  • J. Scott Robinson Lifetime Achievement Award – Steven L. Marshall, MAI, SRA, AI-GRS
  • Outstanding Service Award – Arthur “Rocky” McElhannon, MAI, SRA, AI-GRS
  • Outstanding Service Award – Jacinto “Jay” Munoz, MAI, SRA, AI-GRS, AI-RRS
  • Women’s Initiative SPOTLIGHT Award – Claire M. Aufrance, MAI, SRA
  • President’s Award – Elaine Liz-Ramirez, MAI, AI-GRS
  • President’s Award – Mark E. Verrett, SRA
  • President’s Award – Claire M. Aufrance, MAI, SRA
  • President’s Award – Rodman Schley, MAI, SRA
  • President’s Award – Suzanne Brockway

AI Education and Relief Foundation awards:

  • George L. Schmutz Award – Brad Carter, MAI, and Tyler Leard
  • Dr. William N. Kinnard Jr. Award – Larry Wright, MAI, SRA, AI-GRS
  • James H. Pritchett Award – Henry J. Wise, MAI

The Appraisal Journal awards:

  • Armstrong/Kahn Award – Richard J. Roddewig, JD, MAI
  • Swango Award – Sandra K. Adomatis, SRA
  • Richard U. Ratcliff Award – Stanley D. Longhofer, Ph.D

Latest Face Value Podcast Highlights DE&I Efforts
In episode four of the Face Value podcast, host Warren Boizot, SRA, AI-RRS, is joined by Ayako Marsh Miranda, SRA, Claire Aufrance, MAI, SRA, and Elaine Liz-Ramirez, MAI, AI-GRS. The group covers leadership, Diversity, Equity and Inclusion and the Appraisal Institute’s current and ongoing efforts in this space. You aren’t going to want to miss this episode.

Click here to listen and subscribe.

  • If you haven’t already heard, The Appraisal Foundation’s Appraisal Standards Board announced that the current edition of USPAP will be extended by another year and will now be effective until Dec. 31, 2023. This change will not impact the current qualifying and continuing education courses on appraisal standards required for all appraisers. Learn more about the Appraisal Institute’s “15-Hour National USPAP” classroom course here.
  • Do you have expertise you’d like to share with your peers? I’d welcome you to submit your ideas for consideration in Valuation, AI’s quarterly magazine, or The Appraisal Journal, our peer-reviewed journal. 
  • Don’t forget to subscribe to Face Value, the Appraisal Institute’s monthly podcast. 
  • The Appraisal Institute continues to expand its social media activities. Be sure to follow AI on Facebook, Twitter,LinkedIn, YouTube, and its blog, Opinions of Value.

Other News Around the Appraisal Institute
And here’s some other important news from the Appraisal Institute:

Highlights from the 2022 Annual Conference

by

The Appraisal Institute’s 2022 Annual Conference took place last week in Las Vegas! Below are some highlights from this year’s event.

Keynote Ryan Leak: Chasing Failure

Ryan Leak kicked off this year’s event as our keynote speaker and did not disappoint!

What has fear ultimately cost you, your team, your organization? In times of challenge and great uncertainty it’s easy to feel paralyzed by fear, but what if you could stand in the face of fear and know that these are the exact moments in life where you can rise to be your best self? These are the real and deeply human conversations that leadership expert Ryan Leak is addressing with global C-Suite audiences in Fortune 500s, All-Stars in the NBA and over 50,000 people that he reaches monthly through his keynotes.

Over the past decade, Ryan has become a sought-after speaker, coach and consultant with deep domain expertise in empowering leaders to reclaim a new self-awareness that enables them to connect with their people more effectively. Rooted in the idea of Chasing Failure, and not being afraid of stretching further, Ryan has been hired to work internally with specialized teams, add value for leaders and their customers, and create new initiatives for the business to better connect with the broader world. Ryan trains 15,000+ entrepreneurial leaders and speaks to over 200,000 people each year as a curator of relevant leadership content and transformational storytelling.

Seen as a deeply aware coach and connector who can seamlessly operate across the spectrum of a business, Ryan helps leaders better understand where their teams are capable of going by addressing the friction of where teams stand today. Using humorous wisdom and poignant narrative, he inspires audiences to recognize the value in chasing failure to become even more than they are – to become the best version of themselves.

2022 AI Awards Luncheon

15 accomplished professionals were recognized for their contributions to better our organization and profession. Congratulations to this year’s winners, and thank you to the AI Education and Relief Foundation for sponsoring the Awards Luncheon!

For anyone who’s ever taken Appraisal Institute educational offerings, you know that the offerings are rigorously researched, developed and reviewed by practicing appraisers using real-world experience in the residential and commercial space. Today I am joined by Alan Hummel, SRA, and one of our past presidents of the Appraisal Institute, to discuss the Desktop (Bifurcated, Hybrid) and Evaluation seminar. Alan was one of the reviewers for the seminar, and I am so excited that he’s here today. Before I turn it over to Alan, I’d like to give you a little overview of the seminar.

2023 AI Vice President Announced

Following the AC on Aug. 2-3, the 3Q Board Meeting took place at the Bellagio Hotel in Las Vegas. AI is happy to announce that Paula Konikoff, JD, MAI, AI-GRS, was elected 2023 Appraisal Institute vice president. Konikoff’s term begins Jan. 1. Congratulations, Paula!

Thank You!

AI sends a huge thank you to all who attended, presented, participated, volunteered and, of course, staff for making this year’s annual conference a success!

Special thanks to our sponsors: Valcre,

Appraisal Institute Annual Conference Kicks Off Next Week

by

Summer is usually an opportunity to spend a little extra time with our families and that’s no different for me. Like most of us, I also enjoy sharing some of my family’s successes. My wife holds a Ph.D. in Pharmacology and works with the Roper Hospital system. My daughter, Nora, is entering her second year of practice as a physician’s assistant with a local urology group and my daughter Grace is entering her third year as a registered nurse at Roper Hospital working the Cardio Step Down floor. Grace is also finishing her first year at the Medical University of South Carolina, where she is in the Nurse Practitioner program. My son, Mason, will soon begin his senior year of college at Clemson University and his interests are in distillery.

[Read more…]

Online Registration Closes Soon for 2022 Annual Conference

by

Some of my proudest moments as an Appraisal Institute Designated Member have been working with Candidates and Practicing Affiliates to help them achieve their Demonstration of Knowledge portion of the designation process. Over the years it has brought me great pride when former Candidates or Practicing Affiliates find me at an event to show me the designation behind their name.    

[Read more…]

Annual Conference Registration Now Open

by

Dear Appraisal Institute Colleague:

Dick Clark once said, “Music is the soundtrack of your life,” which is more true for many of us as we get into the hot summer months and listen to our favorite tunes with the windows down. My favorite artists are Garth Brooks and Alan Jackson, so you’ll catch me listening to them from time to time when I have an opportunity to unwind. While driving, I get funny looks while singing and wiggling around to the beat. The sound of my song is likely causing nearby dogs to bark. Like most folks, a car is a highly public personal space providing comedy for those around me. Nothing beats singing along to “Papa Loved Mama” or “Chasin’ that Neon Rainbow.”

[Read more…]

Keynote Speaker Announced for 2022 Annual Conference

by

In my 37 years in the valuation profession, I’ve learned just how important it is to make valuable, meaningful connections with others in the profession. I started that journey many years ago with the South Carolina Chapter of AIREA (now AI) and The Society of Real Estate Appraisers. I continued it at LDAC and after that, chapter, region and national leadership events, including the Appraisal Institute Annual Conference. The connections made over the years have resulted in close friendships, collegial relationships and professional connections throughout AI and the appraisal profession.

[Read more…]

A Look Inside AI Education: Desktop Appraisals (Bifurcated, Hybrid) and Evaluations Seminar Preview

by

As developers and reviewers of the upcoming “Desktop Appraisals (Bifurcated, Hybrid) and Evaluations” education seminar, Appraisal Institute Vice President Sandra K. Adomatis, SRA, and AI Past President Alan Hummel, SRA, provide an overview of what attendees can expect to take away in this seminar preview. The pair also dive into the value and relevancy of desktop appraisals to residential and commercial appraisers right now.

Check out the video discussion below!

Sandra K. Adomatis, SRA (SA): Hello everyone, thank you for joining us today as we explore some of the upcoming Appraisal Institute educational offerings that you may be interested in. As you may know, my name is Sandy Adomatis, SRA, and vice president of the Appraisal Institute. I must admit, I’m very excited to bring this information to you today because I’m the developer of the seminar!

For anyone who’s ever taken Appraisal Institute educational offerings, you know that the offerings are rigorously researched, developed and reviewed by practicing appraisers using real-world experience in the residential and commercial space. Today I am joined by Alan Hummel, SRA, and one of our past presidents of the Appraisal Institute, to discuss the Desktop (Bifurcated, Hybrid) and Evaluation seminar. Alan was one of the reviewers for the seminar, and I am so excited that he’s here today. Before I turn it over to Alan, I’d like to give you a little overview of the seminar.

According to a recent news release from Fannie Mae, desktop appraisals are going to be growing in the numbers requested. It’s not going away, so residential appraisers need to have all the information they can to develop a credible report. Desktops are also valuable on the commercial side as well. Appraisers have many questions about them that are addressed in this seminar to provide more information and clarity about this business service…The seminar gives the pros and cons that were voiced by appraisers we interviewed before developing the seminar.

At the end, you’ll have all the information you need to make a good business decision. We’ll review the expectations of alternative appraisal services, their potential uses of appraisal standards as they apply scopes of work and liability concerns that we hear from many appraisers around the country on the residential and the commercial side.

Alan helped significantly in the development of the seminar, so let’s hear from him. Alan, could you share your views on the relevancy of desktop appraisals and evaluations as it applies to appraisers today?

Alan Hummel, SRA (AH): Absolutely. Thank you so much, Sandy. The principle of change is a concept that we as appraisers deal with on a daily basis. We’re providing our services, and as the world changes, so do the process of methods used by so many businesses, including our own appraisal profession.

This seminar is designed for both residential and commercial appraisers to understand…  the relevant assignment characteristics. What do they have to do in order to make that decision? You indicated to participate in desktop appraisals and or evaluations — it’s interesting because part of what we have to understand are those significant federal and state laws that govern the desktops and evaluations used by our clients and all kinds of lending decisions.

SA: That’s great information, but how did how does it become valuable to the everyday appraiser?

AH: First, it helps the appraiser understand the “how” and “why” lenders use these types of assignments within their lending processes for us to better understand what the lender is trying to accomplish. We can make certain that we are providing our services in a manner that’s beneficial to them.

Secondly, learning to identify the appraisal standards, the banking guidelines, the lender requirements, the state requirements… in order to develop a report that meets our USPAP in Appraisal Institute standards for development and reporting. It helps to differentiate between traditional appraisals from evaluations and desktop valuation services.

SA: That’s great information. You’ve touched on some excellent points here, Alan. I’d like to… tell you a couple things that I’m excited about when I was developing this seminar and when I’ve taught the seminar. What I’ve learned from this is that the seminar provides information that is necessary for an appraiser to make that informed decision like you’ve talked about and be able to produce a credible report with confidence that we’ve done the job right. I think this seminar offers that informed information. For us, it’s a big takeaway I see when offering this class as an instructor.

Secondly, the questions and the feedback that you’ll receive from other appraisers in the classroom that are already offering these services that can add valuable information to the text material in the seminar. I’d highly recommend this seminar to appraisers on [both] the residential and the commercial side.

I’m curious — what excites you about this class?

AH: Very similar to what you’ve mentioned, Sandy. The seminar does not advocate for or dissuade appraisers from doing these types of services. It provides examples. It provides the acknowledgement of the rules and regulations that, if an appraiser decides to provide these types of services, they can make a professional and business decision… and maybe, what times they wish to provide these services for what type of clients. But especially, it helps them gain the knowledge necessary to keep them safe and to mitigate liability when providing these types of services.

SA: Wow, what an important point to leave this video on. Yes, that is our goal. We’re not advocating for, or against. We’re just giving you the facts and letting you make the decision that’s best for you.

More about AI education offerings:

See seminar details and registration offerings here.

Learn about other education offerings from the Appraisal Institute here.

Don’t forget to subscribe to the Appraisal Institute’s YouTube channel for future videos on AI education and other association updates you don’t want to miss.

PAVE Action Plan Released, AI Provided Input

by

This month, I encourage you to think about your colleagues, peers and mentors who have guided you throughout your career. For me, my career as an appraiser began in my final semester of college, where I took a real estate appraisal course that was taught by an MAI, Ph.D., using “The Appraisal of Real Estate,” 7th edition. On the first day of class, the students were tasked with completing a narrative residential real estate appraisal that was due on the last day of class. We were provided with a list of local SRA designated appraisers, so we’d have access to a mentor and the necessary data found in an appraisal office.

[Read more…]

4 Innovative Commercial Building Features That Could Prove Difficult to Appraise

by

This post was written by Max Shafer, an editor at Innovative Building Materials.

As design and fabrication processes continue to improve with technological advancements, there is no shortage of innovative building materials to hit the market on a regular basis. While these materials offer exciting prospects for commercial building owners in terms of sustainability and energy efficiency, they can cause some issues for appraisers who have not had extensive experience assessing their long-term value. To help in this regard, the following breakdown looks at four innovative commercial building features that may prove difficult to appraise.

1. Transparent Interior Walls

Commercial buildings continue to employ the open floor plan for their interiors. Among the benefits of fewer walls and more open spaces include:

  • Increased natural light flow
  • Greater customizability of space
  • Enhanced collaboration and connectivity among patrons

Despite the benefits of fewer interior walls, the COVID-19 pandemic reminded building owners of the importance of providing separate spaces. This has led to a rise in glass curtain wall partitions.

While these mobile, transparent walls help ensure separation while maintaining the benefits of an open floor plan, they do present some challenges for appraisers. Should they be viewed as real property or chattels? Do they provide value to all types of building tenants?

2. Modern Updates in Historic Buildings

There is a major push in the commercial building industry to reclaim and repurpose historic buildings instead of building new structures. While this process has many cost and sustainability benefits over new construction, it can be difficult to maintain the historical integrity of a building while simultaneously equipping it with the most innovative new features.

There are some companies who perform admirably in this regard, such as manufacturers of historic steel windows that can retrofit the highest quality window solutions that are nearly indistinguishable from the historic building’s classic aspect. However, this creates some challenges for the appraiser. Do the new windows add or detract from the building’s historic DNA? How can you accurately assess the longevity of a building whose components have such extreme variance in useful lifespans?

3. Radiant Floor Heating

Radiant floor heating is an innovative subfloor heating system that steadily disperses heat in an even, stove-like manner throughout the day. It can significantly reduce HVAC costs by eliminating cold pockets in a commercial building.

Despite the clear benefits of a radiant floor heating system, there are some concerns that may be difficult for appraisers to place a value on. For example, repairing the system can be a bit time consuming, leaving sections of the floor inaccessible for extended periods. Furthermore, as other aspects of the building become more energy efficient, the long-term cost benefits of having a radiant floor heating system become a bit muddled. 

4. Solar Panels and Other Green Technology

There is no denying that producing clean energy through the use of PV cells is a desirable feature in commercial buildings. Not only can creating renewable energy lower utility costs, but it can help businesses comply with government-mandated environmental standards.

The challenge when including solar panels as part of an appraisal hinges on a few factors:

  • Deployment of new technology – as PV technology continues to improve and the market gets increasingly crowded, will existing solar panels become “obsolete?”
  • Durability – how much investment will be required for upkeep and maintenance? Will the existing solar panels withstand severe weather or natural disaster?
  • Longevity – how long before solar panels lose their ability to hold a charge?

In addition to solar panels, the same can be said for other green commercial building products that have not been subjected to years of scrutiny. Some examples include:

  • PV window treatments
  • Cooling bricks
  • Self-healing concrete

Appraisers: what types of innovative commercial building features do you believe could prove difficult to appraise?

Max Shafer is a contributor to the Innovative Building Materials blog. He is a content writer for the construction and home improvement industries with an interest in landscaping, outdoor remodeling, and interior design. Max is focused on educating homeowners, contractors, and architects on innovative materials and methods of construction that increase property value, improve sustainability, and create a warm and welcoming ambiance.