The Undisclosed Synthetic
- James W.
- 3 days ago
- 1 min read
LinkedIn Post 03: The Undisclosed Synthetic
You're conducting the appraisal. Three comparables support your value conclusion. Nice, tight analysis.
Auditor asks: "Tell me about the third comparable."
You respond: "That one was generated by an algorithm."
Auditor: "Where are the closing documents? The MLS listing? The county recording?"
You: "Well... there aren't any. It never actually sold."
Auditor: "Then why is it treated as a comparable?"
This conversation is happening now. As synthetic comparables proliferate, disclosure becomes critical. Clients and auditors need to know the difference between market evidence and algorithm output.
Undisclosed synthetic comparables aren't just a governance problem. They're a disclosure problem.
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