Marc Moffitt - The Three Approaches to Value

The Data Desert Problem

We've all been there. A unique property lands on your desk, maybe it's a converted church turned boutique hotel, or a specialized manufacturing facility with no comparable sales in the county. Marc Moffitt, who spent 20 years at Denton County Appraisal District before transitioning to teaching at UNT, puts it bluntly: "Anytime you get into a situation where you have limited data, your guess is as good as mine."

But here's what separates seasoned assessors from the rest: knowing that when two approaches fail you, there's always a third waiting in the wings.

The Market's Voice: Sales Comparison

The sales comparison approach remains our North Star for good reason. As Moffitt explains, it "illustrates what we call the collective perception and actions of the market." When you can aggregate enough arm's-length transactions and identify patterns, you're capturing the actual behavior of buyers and sellers, not theories or formulas, but real market dynamics.

The beauty lies in its simplicity. The market speaks through transactions, and our job is to listen carefully and translate that language into defensible values. When this approach works, it works brilliantly.

The Investor's Calculator: Income Approach

With capital flooding into real estate markets, the income approach has never been more relevant. Competition among investors creates pricing discipline that we can leverage. The challenge? Getting the expenses right.

"The biggest issue that I see on the income side of things is going to be getting the expenses right," Moffitt notes. But professional property management has been a game-changer here. These firms have "those expenses dialed in really, really tight," giving us more reliable data than ever before.

One teaching trick Moffitt shares with his students: the "ERV triangle" for remembering income formulas. Cover what you're looking for, and the formula reveals itself. Sometimes the best tools are the simplest ones.

The Last Resort That Isn't: Cost Approach

Many assessors treat the cost approach as a fallback option, but Moffitt offers a more nuanced view. While it may be the "last case scenario," it's also one of the most straightforward to teach and apply. The real challenge lies not in calculating lumber and labor costs, but in capturing those elusive soft costs, entrepreneurial profit, jurisdictional fees, and financing costs that can range from 20% to 100% of hard costs.

This wide variance in soft costs explains why the cost approach often feels less precise than its siblings. Yet for certain property types, special-use buildings, new construction, or properties in thin markets, it may be your most reliable option.

The Teaching Revolution

What struck me most about Moffitt's perspective is how he's preparing the next generation. His 700+ former students aren't all working in appraisal districts. They're senior analysts at hedge funds, team leads at brokerages, and VPs at private equity firms. They're using valuation skills to identify opportunities, not just assess taxes.

This broader application of our craft deserves attention. When we teach valuation as a problem-solving toolkit rather than a narrow technical skill, we elevate the entire profession. As Moffitt puts it, "I don't teach students how to be appraisers. I teach them how to put a value on anything."

The Technology Horizon

Looking ahead, Moffitt sees automation and AI as game-changers, particularly for mass appraisal. But here's the crucial insight: technology won't replace human judgment; it will amplify our ability to process data and identify patterns. The key is having documented, systematic processes that can scale.

"Anytime that you get into a situation where you're going to be scaling an operation, you've got to have a process," he emphasizes. This isn't about replacing assessors, it's about freeing us to focus on the complex cases where human expertise truly shines.

The Stability Factor

In an era of job-hopping and gig work, Moffitt's career path offers a compelling counter-narrative. At 45, he walked away from the appraisal district with financial security for life. "I had plenty of friends that made a lot more money than I did over the years," he reflects. "About every seven to ten years they'd call me up, say, hey man, are y'all hiring?"

This isn't about choosing safety over ambition. It's about recognizing that our profession offers something increasingly rare: a stable career path with intellectual challenges, public purpose, and yes, excellent benefits.

Key Takeaways

For New Assessors: Master all three approaches. When data fails you in one area, pivot to another. Every property can be valued; it's just a matter of finding the right tool.

For Seasoned Professionals: Consider how you're passing on knowledge. Are you teaching narrow technical skills or broader problem-solving capabilities? The next generation needs both.

For Leadership: Invest in systematic processes now. The technology revolution in assessment is coming, but it will only be as good as the human expertise we build into it.

For Everyone: Remember why stability matters. In a volatile world, the steady hand of professional assessment provides both personal security and public trust. That's worth protecting and promoting.

Marc Moffitt can be reached at marcus.moffitt@unt.edu for those seeking guidance or wanting to discuss these ideas further.