Tagged: automated valuation model

What Is My Incentive to Take on Trainees? 20

What Is My Incentive?

Why would I bother taking on the added risk of an inconvenient process? Where is my incentive again? As an appraiser, I have to ask (seriously) why should I care if the profession has a shortage of skilled appraisers? Logic dictates that If there is a shortage, then I will remain busy. Even if waivers (another ruse to eliminate appraisal work) increase, I’ll be busier with fewer appraisers. Especially with so many of them “trained” under PAVE or PAREA programs. If there is an adequate supply of appraisers, then users of appraisals will continue to seek cheaper alternatives from them...

Georgia State Appraisal Board Tables Proposed Rule to Eliminate C&R fee 8

Proposed Rule to Eliminate C&R Fee Tabled

Yesterday morning, I attended the Georgia state appraisal board hearing on the proposed rule to eliminate the C&R fee law they have in place. You know, the one that is similar to the one in Dodd-Frank. The Georgia appraisal board apparently is being investigated by the FTC for their law. They thought that the FTC vs the Louisiana case was a ruling in favor of the FTC when in fact it was not, and wanted to avoid any sort of notion that they were price fixing or of anti trust. The board received letters from appraisers and others in the...

Imagine Running the Lawn Mower Industry like the Appraisal Industry 17

Imagine Running the Lawn Mower Industry Like the Appraisal Industry

I’m on about lawn mowing lately. It’s my new full time passion. The appraisal industry should be as straight forward as lawn mowing, but due to the special interests pressures within the value industry, it has become convoluted and dysfunctional. Can you imagine if they ran the lawn mower industry like they try to run the appraisal industry? Like, we don’t care if that lawn is on slope or not, you can only use this mower and you’re not allowed to be versatile and use anything else. And you can’t request the lawn mowing servicer you want to use, you...

Sales Comparison Approach is Racist, as per Academics 26

Sales Comparison Approach is Racist

“…the modern appraisal industry perpetuates racial inequality through its continued use of the “sales comparison approach”… the sales comparison approach persists as the dominant method of assessing home value… the sales comparison approach — the most used method for contemporary residential appraisals — perpetuates inequities through maintaining historical hierarchies and current racialized definitions of comparability…” Appraisers, here’s a YouTube video that you MUST view. This person’s, Dr. Elizabeth Korver-Glenn, PhD, work is one of the key reasons why there is so much chatter about racist appraisers in the US. Her discussion of her book ‘Race Brokers‘ begins at the 8:30...

Bias. Blame the Messenger. It's easier 17

Bias. It’s Easier to Blame the Messenger

No one wants to be the messenger… Appraisers are messengers. Why is their message so despicable? So biased? The messenger. Psychology research easily points out our tendency to dislike the bearer of bad news. It’s also intuitive. Bad news messengers do not smile when they bring the news. Sometimes they even look guilty. We humans can be really basic. We see a correlation between the bad news, the frown, and the messenger. Appraisers are messengers. Why is their message so despicable? So biased? In the entire real estate transaction, everyone wants to make a deal. Brokers want to make a...

PAVE May Pave Over Appraisers. The Blame Game Against Appraisers 19

PAVE May Pave Over Appraisers

The blame game against appraisers is continuing the fast and furious start, evidenced by the PAVE report. A synopsis is in the link: PAVE task force delivers plan on appraisal bias – Lexology Key info from the PAVE report. “Relevant agencies have also committed to addressing potential bias in the use of technology-based valuation tools through a rulemaking related to automated valuation models (AVMs), including the addition of a nondiscrimination quality control standard in the proposed rule.”  And, “In the coming months, the Task Force will assess: (i) the “expanded use of alternatives to traditional appraisals as a means of reducing...

Promoting the False Racist Appraiser Narrative 8

Promoting False “Racist Appraiser” Narrative

Some Lenders promoting false “racist appraiser” narrative to optimize profits via AVMs Like most businesses lenders want to optimize their profits. One way to make more money besides charging more is to pay less in costs and fees. One way for the lender to do that is to pay the appraiser less or just get rid of them and use a free or very inexpensive Automated Valuation Method (AVM). I personally don’t care if a lender or borrower wants to use an AVM. There is enough business out there for appraisers because not all appraisals are for loans and not...

Bias in Automated Valuation Models 10

Bias in Automated Valuation Models

The CFPB is reviewing bias in Automated Valuation Models (AVMs). The proposed rules are a joint effort by the Consumer Financial Protection Bureau, the Office of the Controller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Federal Housing Finance Agency. These agencies are concerned AVMs may reflect bias in design and function. The mathematical models rely on biased data resulting in inaccurate valuations. Basically the agencies are stating historical data going back to redlining is built into these models and do not reflect current market data. Remember markets are not static and are...

Why is Price Indexing Important. Opinion, Estimate, or Prediction? 1

Opinion, Estimate, or Prediction?

Join George Dell & Craig Gilbert for a free 2-hour webinar on Market Price Indexing: For Peaking Prices… Price indexing is also known by other words, such as time adjustments or market conditions adjustments or trend analysis. A number of techniques have been recommended over the years. Most are flawed. Oddly, the algorithm mechanics of calculating are fairly simple and intuitive. Best of all, once done correctly, the payoff is really high: You effectively increase the data available for comparison. For example, a very similar property is perfect, but is say 20 months ago, it becomes your best comp. It makes other adjustments easier to...

Dear HUD... the Word Extortion Comes to Mind. What's Your End Game? 7

DEAR HUD… What’s Your End Game?

Dear HUD, recently, within the past year or so, you have been on a crusade to prove discrimination and racism in the appraisal process. Your actions haven’t gone unnoticed by many within the appraisal profession as well as outside it. It’s become clear that you are the go to organization for complaints. Ok. Please read this in its entirety and see my thoughts at the end before making a judgement. The reason I am writing you this letter is for a couple of reasons. First and foremost, I am writing this letter to ask you what your TRUE intentions are...

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