4 ms·

The principal/agent problem. insurance, auditors, government regulation, government backed loans. All have their own problems with this. I know in mortgages,

The principal/agent problem. insurance, auditors, government regulation, government backed loans. All have their own problems with this. I know in mortgages, appraisers are randomly selected. Where as before they were selected by the mortgage company for what value they could get for the house. The problem now is they have no accountability to anyone. part of the problem in health insurance consumers aren't price sensitive so prices just keep going up. (obviously they're are more problems that that) governments have regulator capture issues. shop your auditor(regulator) is a problem.

pmiller2 8y ago
Appraisers are a bad example. I think most people would be shocked at exactly how many appraisals come in exactly at the contract price. You can't tell me something's not influencing them, even if it isn't direct pressure from a lender.
- ams6110 8y ago
  Real estate appraisals are mostly on the basis of what other similar houses have sold for. This is the same process that the realtor uses to determine an asking price. Not surprising they are generally pretty close. The last thing a realtor wants is for a sale to fail to close because the appraisal is too low.
  - pmiller2 8y ago
    I didn't say anything about asking prices. I said "contract prices," which is the final agreed-upon price for the house after an offer is accepted. Even if the asking price is higher or lower than the contract price, it's typical for the appraisal to come in right at the contract price. The appraiser knows this value going in, and it's pretty typical for the appraised value to be exactly the contract price. This is, at least, a very interesting coincidence.
mjevans 8y ago
For appraising anything of serious value a better algorithm would be to have an odd number greater than 2 write up detailed appraisals including 'why' for decision points. Then any values deviating greatly from the norm would be reviewed. Depending on the noted 'why' the differing reviews had different outcomes either further investigation (focusing on missed details) or followup for a bad or under-trained reviewer would occur. The reviews reflecting the reality of the appraised item would be mean-averaged to find a 'typical market value'.
- emodendroket 8y ago
  If all the appraisals are skewed then that does no good
delinka 8y ago
>I know in mortgages, appraisers are randomly selected. Not sure about that - the bank that financed my last mortgage employed the appraiser as full-time member of staff. The appraisal exactly matched the contract. I do find that fishy, but apparently not against the rules.
- ams6110 8y ago
  The purpose of the appraisal is to determine the loan-to-value ratio. As long as the appraisal is at least the required number, they're fine. The appraiser is basically saying, "in my opinion the property is worth at least $X.” Not that it might be not be worth more.
- rconti 8y ago
  At least in the SF Bay Area, appraiser selection was random. Perhaps this is a state law though.
emodendroket 8y ago
> part of the problem in health insurance consumers aren't price sensitive so prices just keep going up. (obviously they're are more problems that that) The prices are essentially unknowable until you've received care, provided you even have the luxury of trying to do comparisons.

pmiller2 8y ago

Appraisers are a bad example. I think most people would be shocked at exactly how many appraisals come in exactly at the contract price. You can't tell me something's not influencing them, even if it isn't direct pressure from a lender.

ams6110 8y ago
Real estate appraisals are mostly on the basis of what other similar houses have sold for. This is the same process that the realtor uses to determine an asking price. Not surprising they are generally pretty close. The last thing a realtor wants is for a sale to fail to close because the appraisal is too low.
- pmiller2 8y ago
  I didn't say anything about asking prices. I said "contract prices," which is the final agreed-upon price for the house after an offer is accepted. Even if the asking price is higher or lower than the contract price, it's typical for the appraisal to come in right at the contract price. The appraiser knows this value going in, and it's pretty typical for the appraised value to be exactly the contract price. This is, at least, a very interesting coincidence.

mjevans 8y ago

For appraising anything of serious value a better algorithm would be to have an odd number greater than 2 write up detailed appraisals including 'why' for decision points. Then any values deviating greatly from the norm would be reviewed. Depending on the noted 'why' the differing reviews had different outcomes either further investigation (focusing on missed details) or followup for a bad or under-trained reviewer would occur. The reviews reflecting the reality of the appraised item would be mean-averaged to find a 'typical market value'.

emodendroket 8y ago
If all the appraisals are skewed then that does no good

delinka 8y ago

>I know in mortgages, appraisers are randomly selected. Not sure about that - the bank that financed my last mortgage employed the appraiser as full-time member of staff. The appraisal exactly matched the contract. I do find that fishy, but apparently not against the rules.

ams6110 8y ago
The purpose of the appraisal is to determine the loan-to-value ratio. As long as the appraisal is at least the required number, they're fine. The appraiser is basically saying, "in my opinion the property is worth at least $X.” Not that it might be not be worth more.
rconti 8y ago
At least in the SF Bay Area, appraiser selection was random. Perhaps this is a state law though.

emodendroket 8y ago

> part of the problem in health insurance consumers aren't price sensitive so prices just keep going up. (obviously they're are more problems that that) The prices are essentially unknowable until you've received care, provided you even have the luxury of trying to do comparisons.