Big Data is in Real Estate
The only thing Big Data can’t do is smell.
I got a call from my credit card company. Now I have been traveling a lot lately on business. Apparently, someone got my number and charged $199.53 at WalMart on Monday. I was not in WalMart, but a couple a weeks ago I bought a new TV at Sam’s Club. No question about the Sam’s Club purchase. How did they know I did not go to WalMart? I am truly amazed. The reason – BIG DATA!
The banks are amassing massive amounts of data on you, me, everyone. They know more about you than you do. Big Data is a term we need to pay attention to. Big Data is everywhere. So all the real estate transactions, assessments and listings are being amassed. Corelogic is at the front of this. They own MLS’s, Marshall Swift, AMC’s, and title companies. Big Data is in real estate!
So how will this impact us?
Many MLS’s use realist. Richmond MLS will be making the move soon. There is a feature on it that is awesome. It does an AVM and it scared me. It’s that good. The only thing Big Data can’t do is…. to quote Pat Turner…. is smell.
Fannie Mae has Big Data in the form of UAD. How long before Corelogic gets it? I bet they already have it. I heard FNMA has over 1 BILLION appraisals in their data. I have about 8,000. The commercial guys data base is maybe 4,000. From a data stand point, we don’t stand a chance.
So what is our future?
The number of appraisers entering the field is way down. Why? Maybe because of BIG DATA. They are just not needed. What happened to the Fireman on the trains. Diesels don’t need a fireman. What about the VCR rental store? We need to plan and adapt.
VACAP is regularly sending out information now. The state meeting is on February 23 at 10 AM. The full board will be discussing C&R fees. Where is BIG DATA when you need it? It’s there with every invoice we send. That is why it’s important just to say NO! to an unreasonable fee. If you win every bid, you are to cheap, a rich businessman told me.
VACAP met with several other State Coalitions. Apparently, an appraiser can file a complaint with the FDIC about the actions of an AMC. VaCAP will provide more details on this later.
By Alex Uminski, VaCAP Treasurer
- The New Con: Hybrids, Waivers & AMCs Threaten Public Trust - December 16, 2024
- VaCAP Supports Shane Lanham’s Legal Fight - September 10, 2024
- It’s Just Responsible Journalism! - February 21, 2024
God Morning! 🙂
AMCs, AVMs and incompetent (unethical, unrealistic) data mining need to go! The AMC name in itself reflects slavery. That is sad. AVMs are a mockery and is used to enslave values. That is sad. Data Mining in Real Estate is a heathen act. That is very sad. Independent Appraisers have rights! Where are they?
I know one: Geographic Competence. Big Data not only cannot smell, it has no regard for Geographic Competence. Real Estate is not a movable market, it is immovable and set in location. This reigns in boundaries.
Big Data acts like it is too big to fail. That is not good. That s BS. The truth is that Appraiser Independence is too big too fail !!
OK calm down chicken little! I was just getting into real estate as an agent back in ’03 and that’s exactly what was being said about real estate agents. Guess what it didn’t happen to them and even more so it’s not going to happen to us.
The day appraisals happen without boots on the ground is the day a crash will happen worst than ’08. We’re not going anywhere!
Koma, respectfully I used to sell RE too. FULL 6% listings except one time we had a ‘charity case’ we did for 1%. In fact, I had more 7% and or incentive commissions than most of my competitors. Now days, I see I 1.5% offered as selling side a LOT. 4% total; even 3%. Don’t kid yourself, tech and internet is hitting agents too.
Big data is not our enemy OR our problem. It is the unauthorized use of our professional skills and work products being used to drive our fees down. Read blog here in next few days about First American; their PACE PRO Product AND how they own the famous appraisal software company that produces that brags on their news releases how concerned they are about ‘compliance’. Until today when I noticed who bought them out, they were my #2 ‘go to’ forms of choice.
BY THE WAY…it is NOT the banks that are aggregating our information, it is the larger Title INSURANCE Companies! THINK about who controls data about all aspects of the transaction.
Mike, Funny that you did not mention anything about what has happened in the past 8-9 yrs. I too see what going on with commissions and guess what IT’S THE ECONOMY! The shrinkage in economy has force much, not all, of that percentage loss. You know how this works, the pendulum swings one way then back the other, it’s just this time it went further then we ever seen (sorry but we weren’t around in the 20’s & 30’s) and it’s taking much more time to come back the other way.
Sorry Mike I’m just to going to respectfully disagree with you on this one. To not even mention what’s happened in the economy is not telling the whole story.
Oh what about those firemen and VCR’s great comparison.
Koma, certainly the economy WAS a factor but respectfully not in the sense that you are inferring.
When property values tanked, it was not the “broke homeowner” whose rate jumped from 2% (Option ARM) to 8% that was negotiating rates downward. In fact, mercenary or not a lot of the more complex REO work was being paid about $50 to $100 ABOVE prevailing rates by banks UNTIL AMCs took over the consumer lending side first; and expanded their toe holds in the GSE Defaulted Asset Management.
We had an almost overnight “hit” of from 25% to 50% (or more) cut in our pay. OUR operating overhead went UP at the same time and our required scope of work increased. Why were OUR fees cut so drastically when average American Household income only dropped a fraction of what we were hit with over the same time period?
Why? Because “free enterprise” was manipulated by extremely powerful national and international real estate and real estate securities and related product dealers; and our fees were artificially suppressed. I think we can even show a “probability” of at least anti trust activity, if not outright conspiracy at this stage of the game, IF we could get the attention of the right political leaders and regulators.
Mike, I guess we’re just going to have to disagree. When the market crashed I reduced my fees by 15% because the market was shrinking (almost not there at all) and now that it’s coming back I have increased my fees over the pass year by 25% and guess what my clients did not even blink an eye. In six months if the market keeps increasing in my areas I’ll push them up another 10% more. Supply and demand baby.
If you or other appraisers took more of a hit (25-50% or more) that is the result of your business decisions. I have a family (1,000’s of others I’m sure) with 2 children in college with a wife that works full time and is a part time student, but I will not accept a fee that is not worthy of my time.
C&R’s and minimum fees get the big middle finger from me! I love my independence and that’s one of the reasons why I’m an appraiser. You pay what I judge is a reasonable fee or you can search elsewhere!
Peace and Love to my fellow appraisers I’m done,
Koma
Where will my business be in three years? My plan is to be semi-retired. I hope to be able to do just enough appraisals to pay for travel expenses and other fun stuff. My concern is whether there will be enough residential assignments. The opportunities in the appraisal industry seem to be disappearing fast. The following information is what I believe to be just one view into the future of this industry.
CORELOGIC, Inc. (NYSE – Symbol: CLGX) – Closed @ $33.38 on Friday 2/5/2016. This company recently completed the acquisition of the 49.9 percent stake of RELS, LLC that it did not own for $65 million.
Previously Corelogic acquired Landsafe Appraisal Services and has pending the acquisition of FNC. Who do you suppose owns “Marshall Valuation Service”? Check out their website: http://www.corelogic.com
I absolutely refuse to accept any assignment from any AMC. It does not take much thought to determine that a bunch of appraisers are splitting their fees with companies like this for 49.9 percent of RELS to be worth $65 million.
Outstanding post Wayne!
William Randolph Hearst, the “Father of American Yellow Journalism” who is credited with starting the Spanish-American War understood that to be able to control information, is the same as being able to control the thinking of a nation. Look at the rallying cry “REMEMBER THE MAINE!” through the prism of history. Does anyone today really believe his interest was purely patriotic, or that he just wanted access to cheap rum and great cigars? There were ulterior motives that if known, would not have been acceptable to the American People. They HAD to be tricked!
The Spanish American War gave us a physical presence in the Caribbean that lasts until this day (United States Marine Corps base Guantanamo on Cuban soil ring a bell?). Not only did it open the Caribbean to America, it more importantly opened up the entire Pacific Ocean to us since we also got the Philippines and all the other Spanish holdings out there.
My point is this. Events rarely happen in a vacuum, and free enterprise is not nearly as “free” or openly and fairly competitive as many of us would like to believe. Here is where I am torn.
I happen to be a generally conservative (say center right) Republican that ALSO happens to be a union organizer. I see no conflict. It’s an outgrowth of my life experiences. ALL of them. I believe in true free enterprise system where we are all able to work hard and either succeed or fail on our own merits and LEGAL efforts. I also have a personal requirement that those efforts comport to my own sense of morality. I will not impose my morality on you, but will not necessarily allow yours to be imposed on me either. I believe LABOR has largely been sold out though. We can argue about who did the selling at a later time. What I’d like to see are the four traditional elements of production essentially ‘in balance’ or equilibrium. We can quibble about what that equilibrium is or should be some other time.
What I AM seeing is a trend toward a return to the days of the Great Robber Barons, but not by individuals so much as conglomerates. I do NOT begrudge them their profits. Not even what some label as ‘excessive’ profits, since basic economics addresses this too.
What I DO begrudge is suppressing the rights and ability of others who are ALSO engaged in free enterprise to reap the fruits of THEIR labor, education and efforts! To do so under the guise of “public protection” or promoting the public trust, or even to ‘preventing’ the conditions that forced TARP on us “so it can never happen again” is worse than anything the old robber barons did.
They are risking the economic well-being of our nation…AGAIN! We cannot have an S&L crisis or TOTAL economic collapse every 20 to 30 years and remain a great nation. Cyclical upturns and downturns are normal, but the extremes of the mid 1980’s and 2005-2008 could have bankrupted us as a nation.
Title insurance companies already control the effective dissemination of information in a timely manner. Closing dates, sellers, buyers, sale prices, financing information, deed copies, plat maps, potential comparable sales, etc. All the raw data required for professionals to verify apparent statically aspects of real property transfers. What they have never been able to do with this data, is to credibly determine, and accurately report market value, or any other acceptably defined value definition reliably. But they haven’t quit trying to convince us that they have done so. The same argument they used in 1991 is the one they use today: “We can get close enough, even if we are wrong, what’s the worst that could possibly happen?”
Every ten years or so we hear of another whizz-bang “solution” that once researched proves yet again that in the imperfect real estate market place that IS America, purely statistical based analyses cannot come remotely close to guessing INDIVIDUAL PROPERTY values for specific ownership rights.
Anyone remember ZAIO and how a VERY HIGH former U.S. Government Secretary absolutely guaranteed it was a system founded on integrity and modern science?
So I get VERY concerned when I see all of the formerly independent entities that our entire system’s real estate market of checks and balances depends on, and which our laws are designed to operate under, being “consolidated” into one grand monopoly.
In late 2000 & 2001 we questioned what the meaning of “is” is as a nation. Now it is time to question what the real meaning of monopoly is.
PS-IF you use ACI appraisal software, look and see who owns them now. THEN look and see if you can find any MAJOR errors with the new PACE Pro form they want appraisers to fill out for $70 a pop! It’s intentional folks. No corporation THAT big can be THAT incompetent!
Apologies for typos and grammar errors- proof reader needed!!!
Done! 🙂
Regarding Last Weeks Appraiser Feud: Mike Ford Vs Retired Appraiser
Although a great deal of evidence suggested that Mike was behind last week’s derogatory remarks the owner of AppraiserBlogs.com has spent two days attempting to convince me that another appraiser was involved. The information that she sent to me is equally convincing that another appraiser was involved. Since I have no absolute proof of who was behind the remarks I am offering you a conditional apology. If you were not involved then you have my full apology for bringing your name into this. I am now informed that Brendan “BC” Campbell of Boston launched last week’s personal attacks. After seeing Mr. Campbell’s photo I am comforted in knowing that the man was damned in this life from day 1. Thus the AppraisersBlogs.com feud hopefully comes to an end.
I extend my heartfelt apology to Mike Ford if he was not involved in this matter. I stand impressed by his resume and the fact that he is trying to help appraisers through his work with the AGA. I extend my heartfelt sorrow to Mr. Campbell for simply being. Lastly, I would also like to express my apology to the blogs owner for any stress that our argument may have created. Hopefully something positive came from this and a few more readers were added as a result of our bickering.
I have monitored every worthwhile appraiser website since 2008 and AppraisersBlogs.com continues to be the number one blog by far. This is the only site that consistently covers issues that real appraisers are concerned about. This fact that this feud was allowed to appear online is confirmation that the owner and creator is not a fan of overly sanitized blogs. Appraisers have a rare gem with AppraisersBlogs.com because it’s the only meeting place that allows TRUE freedom of speech.
Koma You’re right re agree to disagree, though I have to admit I know that in some parts of the country, traditional supply and demand pricing is coming back. Alaska; parts of Texas come to mind. I’m having little trouble in CA getting ‘normal’ fees for non AMC work (MOSTLY between $450 to $750 with some higher; and occasionally lower if part of bulk assignments).
As for the digital salute to C& R, like it or not it is the law of the land. It is only one aspect of the AMC related “challenges” we face. In any event I’m happy to hear you are doing well.
By the way, I don’t refute that supply and demand as more and more of us drop out, MAY become more of a factor. My well founded fear is that the GSEs will be pressured to by pass appraisals all together. The ‘rules’ already exist that would allow them to do so.
Mike, I appreciate the dialogue on the topic and thank you for the information you have provided. I’m always open to all sides and enjoy learning or maybe lending out some. Also, thanks to Appraisersblogs for giving us this format!
Keep appraising!