About this episode

The episode discusses the distinction between appraising value and estimating it, emphasizing the role of professional judgment in real estate appraisals.

Why Appraisers Opine Value—They Do Not Estimate It Many people casually describe a real estate appraisal as an “estimate of value.” While common, this language misrepresents what appraisal actually is and why professional judgment remains essential. An appraisal is not an estimate of a hidden or pre-existing number. It is a reasoned value opinion formed under conditions of uncertainty . An estimate assumes that a true value already exists. It can be approximated with better data or tools. Market value does not work that way. No single, correct value resides inside a property waiting to be discovered. Instead, market value reflects how typical buyers and sellers are most likely to behave. This assumes a specific point in time, under specific conditions, with incomplete information. Real estate markets involve people, not machines. Therefore, uncertainty cannot be eliminated. Every sale is unique. Different buyers, financing terms, timing, motivations, and negotiations can produce different outcomes without anyone acting irrationally. A sale price shows what happened, not what had to happen. This is why appraisers opine value. They do not estimate it. A value opinion integrates…

People in this episode

Host: Timothy Andersen

Topics covered

• real estate appraisal
• value opinion
• market behavior
• USPAP
• professional judgment

Keywords

• appraisal
• value opinion
• market value
• USPAP
• real estate

Mentioned in this episode

Organizations: USPAP, Appraisers Advocate Podcast

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