Can You Measure the Accuracy of An Opinion?
Excerpt: Two appraisals are completed on the same property. Each appraiser has a different opinion of the market value. Which one is accurate? Can they both be accurate?
Occasionally, I read articles or hear of companies that refer to the appraiser’s “accuracy rate”. I’ve always wondered how this is possible to measure. After all, an appraisal is an opinion of market value. Interestingly, if you look up the word “opinion” on www.dictionary.com, one of the definitions is, “a personal view, attitude, or appraisal.” Another is, “The formal expression of a professional judgement”. Can an opinion, or a person’s professional judgement be measured?
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My comment: I used to do a lot of relocation appraisals, where 2 or 3 appraisals were done on the same home. If the appraisals had the same values, it was suspicious. We were usually within 5%. Our accuracy was judged on how close we were to the sales price 60-90 days in the future. Very challenging appraisals!!