Big Data Assisting Appraisers
Big data comps sharing assisting appraisers…
I admit to having a dog in the fight. Maybe even a pony, camel, or even a pure bred Clydesdale horse…
On 10/09/2017, the owner of alamode software informed customers of a significant new change in how ‘comps’ can be added to a current report – which will be implemented sometime early next year. Read his message here.
This is significant because the ability of ‘Big Data’ is being put to work ASSISTING appraisers, rather than being withheld from us as is done with the GSE’s highly touted Collateral Underwriter – even though ‘we’ appraisers are the ones supplying that data.
This new process will utilize the huge data base of reports, and the comparable properties within them, that alamode processes through their servers daily, and feed comps data back to the appraiser within moments of entering the comps address into a report grid. (Yes, this will require an active connection to the web while doing the report.)
And by the way, as Mr. Biggers explains, this is not revealing any confidential info, so the USPAP police won’t need to drag out their handcuffs!
To learn more, click this link.
Comps sharing, fees, trainees, and AVMs
SmartExchange™… allows you to transparently share your comps grid data with your peers – and get access to theirs – in a way that’s so simple and quick that it’s actually hard to demonstrate. The best way to describe it is “typing magic”: You type an address in the grid exactly like you do now, and suddenly you see the rest of the grid for that comp filled out. Instantly.
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How’s it all possible? Well, with so many appraisers out there using our software, and everyone typing in many comps per report, it means that nearly every recent property in your market has been entered into a grid by one or more appraisers before you got to it.Obviously, you don’t get the benefits unless you sign up for SmartExchange. Like comps sharing systems that have existed locally for decades, you have to give in order to get. Unlike those older comps sharing systems however, once you sign up, there’s nothing else you have to do. It automatically contributes your comps to the local pool as you do your work, and you automatically see them auto-populate when any comp address you enter is already in the pool.
Dave Towne on e-AppraisersDirectory.com
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I have issues with this. I am pretty sure there will be discrepancies with how individual appraisers view properties along with the vagaries of Realtor provided information. I just see a big ball of stickiness forming and I am not sure I wish to be part of it. It used to be that lenders were not allowed to compare properties between appraisers. I know in our office back in the day a lender asked why I had differing info from another appraiser in our firm on two different reports. It was because he was using Realtor info and I had inspected the property. The differences weren’t great or value impacting so not an issue. I can see the nitpicking from where I stand and am not really interested in explaining everything over and over. I do enough of that already, dotting “i’s” and crossing”t’s” – no valuation questions, just making sure the lenders get all they ask for. The premise is good, I am just concerned how it will be used.
Ive always said I would probably be the first to get blacklisted from FNMA because I use data I derived from my personal inspections and not realtor data that is often basically what the county has on record.
Good Job.
Is is possible that participating appraisers will unknowingly and unwittingly be submitting their data to a large single data base “on the cloud” (that is, someone else’s Server), which will have tremendous value, and could one day be sold? This has already happened elsewhere. About 1999-2000, when developing an AVM [now the platform used by FHLMC and FNMA], I met with the CEO of one of the big data providers, to buy data. He said “The Value is in the Data”. At the time, the data were very sparse and convoluted, not well consolidated. Big Data providers, GSEs, AVM developers, etc, have figured out the importance of obtaining an abundance of reliable data from whatever source(s) possible. PIW is now one of the true beneficiaries of this process and appraisers are the tool to make it happen.
I’m not participating, I will have to edit this data on top of MLS data and public records based on my personal inspection. This will feed the big data monster and I’m sure I will graded against mass data against what entered myself. I work in a rural market I am geographically competent, this only allows appraisers with limited local knowledge to use my work with virtually no benefit to me. TFB
I’m with Ross. Rural data is extremely valuable. I will not share my findings with out of area wannabes.
So then all available tools should be free to us if we are contributing to the data. My time and research as Drug Companies pay their R &D large salaries, we should have royalties as well
…and of course alamode will waive all upload and fees from appraisers, right? Better yet, may we assume they will be giving away ALL their appraisal software for free from now on? You, know-as compensation for all the unique data and appraiser expertise they will be getting for free.
Appraisers would be contributing to a large, single data base on a privately-owned server. The data submitted may have tremendous value somewhere down the road. The data will be submitted by the appraisers in a perfect format and with UAD codes which will be easy to store, sort, retrieve and analyze. Analogy of similar Data Transfer, starting in 1970’s: SREA ==>CMDC ==> NCD==> FNC==> Corelogic. Corelogic provides AVM’s and other alternative methods to appraisals. The SREA-CMDC property data were submitted either willingly or unwittingly by appraisers via loan originations. Many by lenders in order to seed the data base and receive $$credit for submission. Read the contract very carefully to see who owns and controls the data submitted, and how it will be protected. When submitting data to SREA, CMDC, etc. there was no thought of the true value and how it would later be used against appraisers best interests.
Some of these responses show some of the problems in the appraisal industry. Appraisers are very independent and do not want to communicate with each other, I guess they think they already know everything. If appraisers would talk to each other and share their knowledge everybody would win. All appraisers can learn by sharing their knowledge and listening to other appraisers. If you have a better way or more efficient way, why not share it with your fellow appraisers. I conduct meeting with appraisers in my area every month and every appraiser has learned something from these meetings which makes them a better appraiser including me. One of the response was “I’m sure I will (be) graded against mass data against what (I) entered myself.” This already happening with CU and if you differ in your Q or C ratings and several areas from most other appraisers you will likely get a slap on the wrist from Fannie. In our meetings we had lengthy discussions about what is Q3, Q4, Q5 and C3, C4, C5 for properties in the same development which we all had completed appraisals. You may call a house Q4 and you may be correct however if all of the other appraisers in your area call it a Q5 or a Q3 guess who is going to get that letter from Fannie. Alamode is just providing you with information that other appraisers in your area used in their reports, you can ignore it or change it. All of the fields for each comp will fill in and you will just have to review and/or modify it to suit your opinion. Sound like a WIN-WIN for me.
John obviously you know nothing about how appraisers think. What makes you think we don’t talk to EACH OTHER? We do, or this blog would not exist. If you ever become one, maybe we’ll even talk to you.
One other correction; we don’t think we already know everything. What we DO know is (1) Not to take advice from the hucksters own employees or other interested promoters; (2) not to listen to some jokers post that when some software whore claims something is USPAP complaint, that it must be so.
I remember the original advertising for appraisal software (DOS) versions…how much easier and faster it would make our jobs. For awhile, it did. Then it made everyone else’s jobs in the chain easier by having the appraisers do their work in addition to their own!
I used to write up my morning appraisals by noon, in the car in front of the donut shop using a .005 fine lead pencil; drop photos off for development; turn work in for mentor review and have the report typed up and FedEx delivered the following day using the balance of the first half day to assemble and deliver the prior days work.
My cost? $0.15 to $0.25 per print, minor cost for Forms and Worms graph paper, two sided tape and mls. Even my Formfill PCPlus+ software later on was only a one time fee. I OWNED the software.
Apologies for the not an appraiser part – missed that part of your post…and highly commend you for conducting peer meetings where you help each other. THAT ultimately is one of most important strengths (all appraisers).
Mr. Biggers makes a compelling argument for the sharing of our data. It’s USPAP compliant and for once we can keep our data “in-house” without being exploited by outside interests. If you haven’t noticed, these outside interests really don’t seem to care about us at all. Outside of the state advocacy groups, this is the only other idea I’ve seen thus far that could possibly benefit us as appraisers. It’s about time we start looking out for ourselves..
I’m sure there may be a learning curve at first but what if it actually helps us? At this point, I think it’s time to move forward for once (instead of one step forward and three steps back). We all seem to work in our own little boxes. I’ve been using Alamode for 20+ years now and haven’t been wronged yet. That along with the statement that they will not exploit us like the other predators seems like an opportunity to give us back at least a little more control.
We can’t keep doing the same thing over and over again. Something has to change.
A La Mode isn’t that far from doing a dance with Core Logic, if you think this is about the spirit of sharing and making us better then you better take a look at FB. Professional organizations make us better, cooperating as individuals makes us better, not sending our hard earned work off to some portal where none of us is really sure on how it is being used.
Mr. Biggers saying there is no conflict with USPAP confidentiality requirements does not make it so. Even if they claim they are only entering in UAD type ‘absolutes’ where is the oversight control to prevent them from mining the other data from the report?
Convenience as far as I know does not eliminate the obligation for me to keep information confidential. Its more than just the clients data. It is the property owners data too.
The first claim of every fraudulent form and or short cut process designer is that “It is fully USPAP compliant.”
Like Xaio (did I remember those clowns name right?); y’all remember – the ones selling territories for $10k coupled to a phony non compliant rapid value system. Or, still my all time favorite – ACI’s owners First American Pace Pro Product or as some prefer to think of it “Short form fraud made easier.” Leveraging that particular, highly touted format would have cost appraisers to lose licenses.
The data sharing model has already been done. It was called CMDC.
Also, let’s not compare or pretend that this is any kind of alternative to CU. It is not, nor does it appear to function anything like CU despite the misleading advertising, speaking of which, WHY is misleading advertising necessary at all if the product is any good?
PS: someone tell Mr. Biggers that the homeowners may disagree about confidential information… like the mere fact they are applying for a loan; or that there is an unpermitted addition, water damage, termites, a tenant with a landlord dispute and a host of other issues that property owners may consider their personal business and not alamode’s.
Early on I used Home Puter, a small company out of The NE, from a cranky guy. This program used the Forms or worms forms. Later a friend shared al amode when Dave Biggers was in Utah.
Great software and it grew, but because I was pirating it I didn’t get the updates. Dave found ME out ! and appealed to my sense of honesty. I capitulated and signed up with two memberships, which later turned to the Aurua program of Al La Mode. Mr Biggers dealt with My plagiarism, appealing to my honesty, not his anger.
Biggers sold his company and his moralist management has been taken over,
When I canceled core logic several years ago their contract language was difficult and threatening the attorneys worked it out. Core Logic was the result of several conglomerations and went on to more, the results, a company run by attorneys, not moralists.
When the Mercury Network was split/sold off from A la mode last year or two it was disclosed at the time in a press release that they process 20,000 transactions A DAY. If each of these transactions was at the typical $10, to $15 per assignment fee (mostly paid by use the appraiser), the company would have made tens of millions of dollars off the back of the appraiser since implementation (2009), and perhaps just as much with the sale 9 years later. I think the owner has been quiet for a few years so as not to disrupt the money train from the appraiser. With the sale of the Mercury Network, its again time scheme from a different angle off the backs of the appraisers.
Seek the truth.
Mike,
Wow, I’ve actually seen your blog before. I never saw this coming. I agree, typing back and forth on a website is a form of communication. I’d like to see the day that somebody actually steps up to the plate. This was an eye opener. Thank you to the host.
I will respond to you. Before I respond I would respectively ask that you read my comment in its entirety. You just told the readers that I’m not worthy to be considered an appraiser.
I remember the green and white “Forms and Worms” form, I remember DOS. Thankfully, I didn’t have use the pencil. They did away with the pencil.
Don’t assume.
It will take me a lot of typing to address what you posted but I guess I have no choice. Or, does it even matter?
John, Mike Ford was responding to John Pratt.
Mike, John Pratt is an appraiser and has authored several articles: Influencing the Appraiser, Purpose of the Appraisal Report, etc.
John, AB is right… I did not mean you (unless you are not an appraiser) and frankly after rereading post I’m not sure I even meant J. Pratt – appears he IS an appraiser. Please accept my sincere apology IF you are an appraiser expressing an informed opinion.
We all try or should do what we can. I never mean to demean anyone’s sincere efforts in that direction…whether I agree or not. I DO respond to non appraisers telling us how we are or should be somewhat differently because they could not possibly know what we go through or the actual standards we are required to follow.
It matters. Point made and accepted.
“Mr. Biggers makes a compelling argument for the sharing of our data. It’s USPAP compliant and for once we can keep our data “in-house” without being exploited by outside interests. If you haven’t noticed, these outside interests really don’t seem to care about us at all. Outside of the state advocacy groups, this is the only other idea I’ve seen thus far that could possibly benefit us as appraisers.”
Seriously? Just what is that compelling argument? How is taking MY data and uploading it to alamodes database keeping it ‘in house’? Did I miss a memo? Has alamode hired me, or are they becoming my formal partner now, and no one remembered to tell me?
Yes, I have noticed how these ‘outside interests’ really don’t seem to care about us at all. For example, interests like alamode and ACI; First American, CoreLogic, REVAA, CRN and FNMA.
(btw-when did you become an ‘us’?- In your other post above appraisers were a “you” rather than a we or an us).
FYI. In the past year alone, the American Guild of Appraisers helped sixty members get off ineligible lists; get paid on (long) overdue invoices, and in half a dozen cases helped them defend themselves against state regulators unsupported and unwarranted allegations of USPAP violation. In just this past week alone we got two off do not use lsits and have one more in the works nearing removal from dont use.
How many did alamode get off blacklists? …or yourself?
Thank you to all that replied to the post.
I guess we stay the same for a while longer. For the record, I’m not a spokesman for Alamode. Just trying to get people to be more proactive in what little capacity we have available to us.
Take Care.
But how does comp sharing really work if you’re not dialing it in and are actually appraising the proper way; relative to the subject? With all the automation out there, there is more data inconsistency lately rather than less. Large data sets, more room for error. That’s the difference between macro and micro analysis. Appraisers are tasked with micro analysis, then cry about not having macro tools. Do you want to keep your job or do you want to be automated? All instances of approaching appraisal development in a macro fashion do result in acceleration towards total automation. Stop outsourcing, stop borrowing, pursue specific unique analysis relevant to the subject. If you’re re using comps in diverse valuation problem scenarios, that’s not correct. That only flies as a standard in strictly uniform housing. Comp sharing and diverse housing is not a good match. I’ll share my intelligent writing and approach but If appraisers tried to share my specific comps data, they’d just get in trouble because it’s entered relevant to the subject, not static for just the property characteristics. Top half of grid is static info, bottom half is relevant comparisons. Appraising 101; define the appraisal problem, prove the valuation solution. It takes a human, but most appraisers have bought into this you’re better off as a robot sort of mindset. They get that from the tech guys and I think this industry has developed an identity problem. Are we valuation professionals or supportive tech staff?
Baggs, The phony sales pitch from the hucksters looking for their next Mercury like windfall, is just that:
1. “Its almost as good as CU; finally giving appraisers what FNMA what let them have .” In truth its nothing like CU.
2. When we argue that it violates peoples right to privacy and entails reporting non public private information to someone other than the client, then the response is that “It merely helps the appraiser to fill in his reports faster-obviously he still has to double check the data.”
Like that will really happen, OR that AMCs wont see this as yet another reason why we dont have to be paid more than peanuts-report is now all automated.
3. Those already trying to eliminate appraisers or at least pretend that ‘hybrids’ can be legitimized, can soon point to the new Titanic data base and say “Look, its already automated.” All the appraiser is really doing is juggling a couple numbers on houses they never saw and coming up with more numbers. Our magical ePixieDust 4.2 can do that MUCH faster and CHEAPER!
Because it’s not compulsory sharing like the CU though, do you think Alamode will disclose the specific details of peer reporting, exact dates such reporting came through, location of the originating appraiser for that specific data, statistical inference for how many times this or that range data entry was utilized? It’s doubtful even the CU tracks data in such a detailed manner. Hence the problem with mass data. Back to square one. Just reviewed another ‘appraisal report’ yesterday for a new construction area, now refinancing a short year later after initial build purchase. Dude applied NO adjustments 1-3 comps, but did adjust 4-9 comps? Give me a break, these guys are dialing it in with boilerplate ‘weighted average’ comments. If only clients used alamode and could understand such an argument is not how the software technology actually works. I continue to think that appraisers are all too willing to escape valuation service and morph themselves into supportive tech staff. If they want out and can’t handle the time commitments of manual detailed analysis, they should be in tech, not appraisal valuation service.
I wanted to follow up on my initial post. I suggested that sharing our data indidually through Alamode users only might be something to consider as long as the data was not exploited as was promised.
I see now how my opinion got lost in translation. I did not mean to imply that comp data should be retrieved and added with the press of a button to save time.
CU is already taking our data.
When CU data is different from the data reported based on our first hand inspection of a property, we are told our data is materially different than that of other appraisers using the same comparable.
In fact, I’m curious to finally see how something I saw with my own eyes and physically inspected can possibly be different than that reported by my peers.
If I can type an address and immediately see what other appraisers reported on that same property, why is that bad?
Always do your own research! Using this data without confirming the data on your own is clearly a very bad idea. For example, for those appraisers that physically measure the subject property, you know first hand that public records are often incorrect.
This idea is just a tool to make us even more reliable. Using this will most likely not save time at the keyboard! In fact, I’m pretty sure it will add time because your verifying the work you already did.
I’m being offered a chance to see other data from my peers in the same market area. I can use that data as a template while typing my own data. If I see something completely off I have an opportunity to question it.
Glad you posted further John. I felt bad offending you. That wasn’t the intent.
Mr. Biggers previously sold out Mercury Network, didn’t he? In any event whoever developed and holds the rights to their new program or process would always have the ability to sell the data by selling the entire process; like Mercury or Appraisal port.
There is no question that having some kind of autofill program saves time, but the potential for abuse is so substantial that it doesn’t seem worth the risk for the profession as a whole.
Set aside concerns that doing this is another step toward putting appraisers out of the mortgage appraisal business.
The two giant remaining issues are: privacy obligations we have morally, if not legally about not disclosing an owner or borrowers private business. It starts with the mere fact that they have applied for a loan. Not anyone else’s business but theirs and their lender. We and other escrow related participants are unavoidable and necessary. Data aggregators aren’t in the same category.
I appreciate that alamode and others (not meaning you) will parse their understanding of USPAP and say well. the owners aren’t the clients anyway, so whats the big deal?
IF you were getting a divorce; or needed a loan to pay off all your credit cards, or were filing bankruptcy; or had to bail a loved one out of jail, OR had unpermitted additions or conversions; a messy house, or one that is falling apart, termite infestation or dry rot etc. would you want that out in the ether? Stored in alamodes cloud only until they sell it to CoreLogic? Even if we could legally divulge all these types of things, it doesn’t mean that we should. We are obligated to disclose to our client and GSEs, but all are authorized users. Alamode isn’t.
The other issue is lazy appraisers. Some of us still fill out the 1004MC because we are required to do so; and THEN still have to turn around and explain how it is a generally worthless process and explain what other sources and methods we used in addition, and relied on for our neighborhood findings.
How many other appraisers just decided the heck with it; and use one of the fancy autofill programs for it and don’t give it another thought? Even when it contradicts other data in their own report?
Its like Q3 C3 ratings. Many times there are specific further market recognized adjustments that are warranted but because they don’t trigger a jump up or down from a 3, some no longer care. Appraisers are allowed to make changes and explain them in addendums that no one reads; but they’ve been beaten over the head by unqualified reviewers so often that many have given up trying. Easier (and faster) not to rock the boat.
I’ve already taken too much space or Id point out how the PIWs are now being used by NAR;CAR; NAHB and others to make sophist arguments that the deminimus should be raised to a million; not just the $400k proposed! CAR is now contending that appraiser inspections aren’t that important so just let brokers do them as BPOs!
I have never seen so much concerted effort to side step FIRREA…and so close to the worst recession we ever had! Wall Street recovered. SO has FNMA, but my personal friends 401’s are still down by the 50% they LOST.
IF FIRREA and USPAP are no longer desired by regulators and Congress, then lets make it a truly level playing field. Eliminate USPAP and licensing completely! Let trained appraisers compete on their own qualifications again. But lets all stop the pretense that ANY kind of monitored quality control exists anymore if that is the objective.
John, your motives are honorable, but there are just too many exceptions who are not as honorable as you. Thats a real issue and concern. Appreciate your reasoned thoughts though. You probably said what many may have been thinking themselves..