Questioning Property Appraisals

It is a good idea to consider the opinions of professionals who have studied and taken some time to understand an industry or portions of it. However, this general advise does not mean that every industry is based on the fact that practitioners will always provide value. Reading this article on the valuation of commercial property has led me to ask whether the industry is based on any objective criteria. As the article states, a study was undertake and discovered that the valuations were error prone one way or the other by up to 40%. Impliedly therefore, many firms that trusted some of the reports presented by commercial property appraisals that were not very useful because of the margins of error. 

This leads me to ask that with such large margins of error, is commercial property valuation really a profession? As the story states, the findings of the study may be taken with caution because the market is depressed and that may have contributed to the differential in the realized and estimated values. Irrespective of that salient fact, I am convinced that appraisals should be conducted differently in order to avoid the impression created by valuers that their valuations and completely solid. I see no perfect solution except that valuations or appraisals should include numbers within a range. This may be difficult because some appraisers may base their fees on the value of the property. 

As expected, the industry practitioners resort to the fact that a number of firms are responsible for improper appraisal because of the competition for fees. In my view, it matters not because there is equal incentive for the better appraisers to achieve better results for the same price. One can only see a change when the demand side of this service gets more serious in asking what the value of an appraisal is.