The Standard of Care Evolution

LinkedIn Post 14: The Standard of Care Evolution

What's the standard of care for using synthetic comparables in valuations?

Currently: Undefined. Different valuers interpret it differently. Some require rigorous governance. Others treat synthetic comparables as equivalent to market comparables. Most fall somewhere in between.

This ambiguity won't persist. As synthetic comparable use becomes more prevalent, standards will crystallize. They'll likely include:

— Explicit disclosure required

— Algorithm validation required

— Lower weighting for synthetic evidence

— Limited use (supplementary, not primary)

— Audit documentation required

Valuers implementing these standards now are anticipating what will become formalized later. Waiting for formal standards means catching up after disputes define them.

Proactive standard-setting is lower risk.

#RealEstate #Valuation #Standards #Governance #ProfessionalLiability