television news reporter on the time he was taking to write a decision on the trial; he states:” The writing is what matters, these (decisions) don’t write easily, it will be ready depending on (when) the writing comes out right.” Not a complete painting for the ear but he got his point across.

Before the time of Joubert, in the 12^th century, freshmen college students were immersed in logic largely from Aristotle’s 27 main reasonings. By the time of Joubert such lessons were most important to the success of a gentleman. Aristotle became central to the practice of law and Judge Berman is well versed in both subjects of logic and semantics. There are several popular modern texts on semantics^[1] and you do not need a college textbook to brush up on the subject. The same is true of logic with many books,^[2] guides, games, and even playing cards available on the subject. Many appraisers may have studied semantics and logic in their formal education years. This work urges them to review their studies, take a closer look as a seasoned professional, and relearn how to incorporate semantics and logic as reasoning into their narrative appraisal report conclusions.

Appraisers typically work on a deadline and unlike a judge, have a short time to get the report out of the office. The appraiser organizes an outline of facts based on the intended use and scope of work that follow a concept and arrives at a value they believe is credible. But credibility is relative, not absolute, and what may seem credible to the appraiser may not appear so to a reviewer. We get close to our assignments; we arrive at values every week and understand the nuances of the process. However, just because the appraiser believes in the value, it does not make the value credible.

This is the most frequent error committed in our profession. We believe in every appraisal we write because we know the facts and the process. We have years of experience in finding places to obtain the facts and monitoring the market. We have acquired letters after our names giving us credibility. We have intense and specific knowledge of the subject we are appraising. If such an appraiser were to state a value why would anyone doubt it? Years ago, this was enough to conclude an assignment, settle a dispute, win a case in court, but not today.

Reconciling Data

user. We do this by exposing the data as groups of relevance to the approaches to value. We develop a scope of work with the methods and techniques commonly used, then relate their meaning to the assignment. USPAP calls it a Reconciliation.^[1] How we construct a reconciliation— how to construct a logical argument using words with meaning—separates reports that can be defended and are bullet-proof from those that lack credibility.

Valuation reconciliation is formed by several singular datapoints or by data derived by comparison and contrast to get to a datapoint, and typically a reconciliation contains both. Single concepts are concrete data and individual facts. Abstract concepts are information formed by comparison and contrast to one another to form data. To provide the opportunity for the user to understand the appraisal process, these single or abstract concepts should be defined in relationship with the essential attributes (see following lists). Data is thus linked by attributes to the reconciliation and builds an argument for the valuation conclusion.”

Essential Attributes in Specific Disciplines

This example of the datapoints and essential attributes in real estate comes from the Appraisal Institute:^[1]

1. Ownership
2. Measurements
3. Condition
4. Improvements
5. Neighborhood
6. Highest and best use
7. Approach to value

And there are others, but in the above it is easy to see singular and abstract concepts and understand that each has essential attributes, readily identified by the professional appraiser.

This example of the datapoints and essential attributes in mass appraisal comes from the International Association of Assessing Officials:^[2]

1. Classification
2. Grade
3. Depreciation
4. Improvements
5. Measurements
6. Replacement cost
7. Land

This example of the datapoints and essential attributes in personal property comes from Lammon:^[3]

1. Type of object
2. Measurements
3. Materials and techniques
4. Inscriptions or markings
5. Date or period
6. Maker
7. Subject
8. Title
9. Distinguishing features

This example of the datapoints and essential attributes in business appraisal comes from Babcock:^[4]

1. Single lump sum of money considered as payable or expended in a particular point in time
2. Right to receive future benefits beginning at that particular time point

a. property in accordance with the benefits of ownership

b. Investment and non-investment properties

c. Marketable and non-marketable properties

d. Hybrid properties

i. Farm

ii. Church

iii. Title insurance company

e. Owner occupied real estate or whole investment property

3. Highest and best use

4. Approach to value

Appraisers in each of the appraisal disciplines utilize similar concepts that are nonetheless very diverse as far as the data that accrues to them. In any discipline, these concepts are formed either by several singular datapoints or by data derived by comparison and contrast and are used to get to the value conclusion.

Appraisal Fallacy Traps

Appraisers have written fatal subjectivist fallacies and logical fallacies in their reconciliations.

Subjectivist fallacies are the belief or desire of the appraiser placed as evidence of a true premise. There are three main subjectivist fallacies:

1. Appeal to the Majority; the appraiser states a large number of people believe it, thus a premise is true.
2. Appeal to Emotion: the appraiser is writing for a reader who wants to believe it is true, or fears that it is true and has no reason to believe it is false.

a. Appeal to Envy: the appraiser used field equipment to measure

b. Appeal to Fear: the appraiser used market rather than cost due to appreciation

c. Appeal to Hatred: the appraiser dislikes the bank lending criteria

d. Appeal to Pity: the appraiser acknowledges the client went bankrupt

e. Appeal to Pride: the appraiser spent 63 hours developing this 428-page report

3. Appeal to Force: the appraiser persuades through threats (impending lawsuit)

All of the above are traps appraisers have walked into without knowing. The appraiser writing about an abstraction can avoid an appeal to majority, emotion, or force by isolating the actions motivated by the fallacy (buying patterns, market changes) and the circumstances that arouse the fallacy (available cash, rarity, greed).

Appraisers have also written logical fallacies, which were famously promulgated by Aristotle. A logical fallacy creates a flaw in an argument which, as a result, cannot be proven true. There is no room for these fallacies in a reconciliation. It will take some dedication for the appraiser to isolate logical fallacies which they have written but a lawyer or a reviewer will spot them instantly in their gut. The University of Texas^[1] lists 146 entries in their Master List of Logical Fallacies; reviewers should focus on these seven:

1. Circular argument
2. Post hoc
3. False alternative
4. Appeal to ignorance
5. Non sequitur

a. Division

b. Straw man

6. Appeal to authority

7. Ad hominem

In writing reconciliations, appraisers are focused on assembling the research, market conditions, and comparative qualities thus it is easy to fall into a logical trap, it happens without looking. Reviewers need to know what they are to identify them.

Reviewing a Reconciliation Premise and Conclusion

The best beginnings imply or entail the conclusion, giving a hint where the appraiser is going in the argument for a valuation conclusion. The appraiser should lay down a premise that is central to the concept: i.e., the concept comes from the datapoints. If there are singular datapoints, start with them as they are a concrete foundation. The truth of any or all of the premises guarantees the truth of the conclusion. Two or more premises are equivalent if they imply each other. The reviewer should keep three things in mind:

1. A premise which can be true or false is contingent.
2. If it is impossible for a premise to be true it is contradictory.
3. True premises, even contingent but not contradictory, are satisfiable.

Following the premises, the appraiser should develop the argument using relative and restrictive clauses. Relative clauses relate one clause to a particular word in another clause, usually with a relative pronoun. Appraisers do this when linking value characteristics of comparative sales, markets, condition, and cash flow because it paints a broad picture. Here is an example: “The work was produced in 1985. It is dated in the lower left corner with the artist signature. Isometric analysis of the paint indicates the paint substrate was produced by Dow Chemical between 1971 and 1990. The artist died in 1986.”  Restrictive clauses limit the reference to the term and brings the reader into focus, typically heading towards the appraiser’s conclusion. Here is an example: “This item was mass produced and the comparable sales, which are identical to the subject, represent a range of values with a median and mode close to our value conclusion.”

Defendable value conclusions avoid premise traps such as connotations, metaphors, and conjunctions and avoid asserting noun clauses such as think, indication, tend, estimate, and suspect. Bullet proof appraisal reports use non-asserting noun clauses such as knows, acknowledges, proves, demonstrates, and realizes.

Simple arguments start with some assertion (premises) justifying a thesis (conclusion). Extended arguments can contain several arguments; a list of several premises followed by several conclusions. In either case the appraiser is taking the reviewer from what we know (premises) to what we did not know (conclusion). Appraisers love deductive arguments where the premises are intended to provide total support for the conclusion because the premises are either/or and based on what we already know. Such is not always the case and appraisals are sometimes forced into inductive arguments where the premises are only supposed to provide some support for the conclusion. In any reconciliation, however, the appraiser is seeking a value conclusion beyond a reasonable doubt with true premises and no logical failure and this is where the reviewer can take a position to support or refute the appraisal value conclusion.

Conclusion

In conclusion, regardless of discipline, the reviewing appraiser familiar with the appraisal subject, intended user, semantics, and logic can convincingly evaluate the report to a third party. To form an argument on the credibility of the report under review, a reviewer custom designs a “road map” for that appraisal report.

As a side note, every appraiser can benefit from a review of their own reconciliations. To quote Wentworth Dillon, the fourth Earl of Roscommon, Ireland (c.1630-1685): “Those things which now seem frivolous and slight, will be of serious consequence to you, when they have made you ridiculous.”

About the Author

Richard J. Conti, ASA, ARM, owner and principal appraiser at Conti Appraisal Service, is an accredited personal property appraiser and Chief Assessor at City of Taunton, MA. He has presented extensively to appraisal professionals, attorneys, and the general public, and served as president of ASA’s Boston Chapter. Email rick@contiestates.com