Words are powerful and language matters in all situations, but today, I want to specifically talk about the importance of how we use language in the appraisal profession. There are several misleading key words and phrases that we often use as appraisers, and I think we would be doing ourselves and our profession a favor by correcting our language.
A word I have often heard appraisers use is, “undervalue.” Realtors will often say, “The property came in undervalue” when really, they mean to say, “The value of the property is below the purchase price or cost to build.” As appraisers, it is our job to report value, so when we say that a property came in undervalue, we are really saying that we are incompetent appraisers who did not report the value correctly. Unless you are guilty of fraud, the property came in at value as established by the market. Additionally, the property did not come in at value. Rather, the value was reported.
“Inspection” is a word that I use all the time and will likely continue to use simply out of habit. However, I recently heard a different word that I have since fallen in love with. The word “inspection” can give a false impression of what we will be doing when we go out to the property. In truth, we are not inspecting the property. We are not home inspectors, we are simply walking through the property and observing. I have started calling my “inspections” “observations” instead. This is an additional safeguard against any potential liability resulting from someone thinking we are home inspectors.
There have been times when a homeowner or realtor has given “comps” for me to look at as I do my valuation. However, at the time they are given to me, they are not comps. They are sales or listings. They are not comps until I, as the valuation expert, determine that they are comparable to the property I am appraising. It would be in our best interest to kindly and professionally correct whoever is providing us with these sales or listings if they call them comps by saying something along the lines of, “Thank you for providing me with these sales, I will do some additional research so that I can know whether or not they are comparable to the property.”
Finally, rather than only referring to and thinking of ourselves as “appraisers,” we should also think of ourselves as professionals and small business owners.
Words have power and we improve ourselves and our profession when we use them correctly.
For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode: 313 Language Matters