Category: Automated Valuation Models

Standardized Data & Death of Residential Appraiser 30

The Death of the Residential Appraiser

Standardized data & the death of the residential appraiser (as we know it today)… Those that know me on a personal level and that have worked with me over the years have had to hear me talk endlessly about the pending death of the residential appraiser. The other day I eluded to it at the end of another long post. I figured it’s time to share the thoughts with everyone. First off, I come from a long career in corporate America and spend 20 years working in everything from manufacturing, order administration, marketing, sales, and engineering. One thing always held...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / Collateral Underwriter

Real, Real Estate Reform Needed 5

Real, Real Estate Reform Needed

What a crazy system we have grown into since Dodd-Frank. All this talk about “Big Data” and “Standardization” makes me want to scream! Enough is enough. Before we get to the appraisal process discussion, let’s talk about how real estate is priced all across this country. Realtors® price homes, period. No Big Data, no thoughts of mortgage risk, accuracy, consistency, transparency, and no one is looking over their shoulders asking “why” on every choice they make. No regression analysis, no quality or condition ratings, not too much of anything that resembles an appraisal these days. Yet, they are quick to...

American Measurement Standard / American National Standards Institute / AMS / ANSI / Appraisal / Appraisal News

5

Simply too BIG to Say No to…

If they can’t even get their own PACE Pro form right, how are these alternative “valuation” providers going to get something as complicated as the value right? First American, and to some extent similar large scale conglomerate “players”, supply everything to the transaction: from the Home Warranty for the buyer, to the escrow services, to the mortgage company, to the mortgage servicer, to the title company, to the appraisal management company, to the appraiser panelists, to the software company that DESIGNS the software used for PACE Pro and almost all other appraisal software (ACI), to the BPO providers, to the...

1004MC / AGA / Appraisal / Appraisal News / Appraisers News / Automated Valuation Models

AVMs can Never replace Appraisals 34

AVMs Can NEVER Replace Appraisals

AVMs Can NEVER Replace Appraisals & why FNMAs vaunted CU AVM is flawed! Yesterday (March 15, 2016), an appraiser called me to discuss a complex assignment he had. One of his comparable sales was reported in MLS as having sold for $3,469, 898. It was in range with his other comparable sales for his subject property. It was the most similar comparable property. When he went to verify the sale price with our Los Angeles, California subscription-equivalent to “public records” he discovered a shocking discrepancy he couldn’t explain. RealQuest (CoreLogic) showed the full value sale price as $17,665,455! So what...

1004MC / AGA / Appraisal / Appraisal News / Appraisal Organizations / Appraisers News

Experience, Education Criteria Input Request & AGA Open Letter 18

AGA Open Letter Regarding Changes to the Criteria

Request for appraiser input on current and future educational / experience requirements… The AGA sent the below letter to the AQB in response to their outreach asking for comments. Please write them and tell them YOUR views. If you agree with what we have said, then just copy it and add your name to it saying “we agree”. Or don’t copy it, and just say “We agree with the AGA letter”. If there are any significant parts you disagree with, then please ‘except’ those. If you have additional thoughts or suggestions for them (civil ones), feel free to add them....

AGA / AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisal Organizations

16

Collateral Underwriter, What’s Under the Hood?

Collateral Underwriter – Garbage In, Garbage Out (GIGO) FNMA has a fascination for first patenting garbage, & then implementing it as policy! FNMA simply LIED! Collateral Underwriter IS an automated ‘appraisal review’ despite disclaimers. It was never intended as anything else. Read the patent application below. Before I get into the details, I want to ask each reader to forward this to every appraiser you know. This concerns FNMA’s patent of the seriously flawed techniques and underlying support for their Collateral Underwriter (CU) Risk Rating “System”. It’s time for appraisers to take action against the unreliable system which is unfairly...

AGA / Appraisal / Appraisal News / Appraisal Organizations / Appraisal Quality Monitoring / Appraisers News

Computer Generated Value vs Human Brain 1

Computer Generated Value vs Human Brain

Around 1992, representatives of LSI (long before they became completely useless as an AMC) visited us in California to discuss some way to involve automation (as in AVMs) to eliminate appraisals. When I pointed out that they had JUST THANKED me for saving them from a quarter of a million dollars over valuation as a result of pressure from one of their very influential customers, and that the very same issue had arisen from that customers misapplication of data AND their potential misinterpretation of that data, they understood the connection. A KNOWLEDGEABLE human appraiser was required to resolve the difference....

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / Automated Valuation Models

Chief appraiser says AVM is an appraisal 14

Chief Appraiser says AVM is an appraisal

Appraisers, Maybe I’m too much of an anal retentive type person, or perhaps it’s because I believe it’s important to use correct terminology. Regardless, I’m very concerned when someone with Chief Appraiser attached to their name attributes an AVM electronic value statement to an actual appraisal opinion produced by a human. So where did this rant come from, you ask? Future of Valuations Marries Automation and Human Instinct Within the article is this statement by the writer: “While AVMs do hold value — they are a cost-effective, fast tool to produce appraisals — the popularity of AVM usage among home...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / Uniform Standards of Professional Appraisal Practice

Bank profits - Get rid of appraisers 11

Bank Profits: Eliminate Appraisers

Zestimate Gone Wrong. It all comes down to money and profits…

Once again the Zestimate has a home-owner up in arms. In a small town in North Carolina a home just sold for $20,000. It was listed at $55,000, then reduced to $45,000, and finally sold in 2015 for $20,000. Safe to say it needed a little TLC.

It was a shell in need of, well everything. But, we have to remember that automated valuation services don’t know anything about condition or circumstances. Before the house was listed for sale, the owner (from a different state) thought they had inherited a nice little nest egg. Not a fortune, but if it was close to the Zestimate, they would have quite a nice amount to play with…

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / Home Valuation Code of Conduct

Valu+ Logo Powered by NDC 3

Valu+ Discounted for AppraisersBlogs Readers

NDC’s Appraiser Product is now Valu+ with exclusive 20% off for all Appraiser Blog Readers. Valu+ is a standalone valuation product under the NDC Brand. San Diego, CA: In the appraiser data market there has been one constant for many years, NDC. Until now NDC was both the name of the business and the research product supplying thousands of appraisers and real estate leaders with accurate public records data on over 130,000,000 parcels of land. NDC is evolving and growing rapidly and because of this growth we are excited to announce that the NDC research and valuation product will be known...

Appraisal / Appraisal News / Appraisal Technology / Appraisers News / Automated Valuation Models / AVM

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