20 Minute AI Appraisals Are Coming

[glenn walker]

90-95 %, and the percentage is less in hot markets - during the height of the boom, stats in FL and other states were that 60% came in under SC price. The values would be better if there were true appraiser independence, but Fannie does not REALLY want that, which might mean RR ordering, such as VA has or the former FHA panel had.

It is not a "waste of money," because for the 5-10%., it saves them from over paying or per the financing clause clause can withdraw from the deal with no penalty. That is a lot of people and for th emarekt, a lot of loans - and allowing all properties to have a WAIVER or desktop can see close to 100% close which can skew markets - a few sales a month at higher prices forms the next set of comps for an AVM or appraisal -% is

Most folk's don't want to start looking for another home to buy so the sellers and buyers usually work out a compromise but nobody's happy. The markets aren't changed by a few lower sales prices.

 

[J Grant]

Most folk's don't want to start looking for another home to buy so the sellers and buyers usually work out a compromise but nobody's happy. The markets aren't changed by a few lower sales prices.

So you care more about making them happy then being ethical -
BTW, buyers are not happy when they overpay and end up underwater on their loan..
And the market does change by a few lower sale prices, because overvaluing properties leads to those sales used as comps and it masticizes from there.

BTW during the frenzied part of the boom 2021-2023 range, I was appraising a number of peoperties at the MV below SC price because the prices were so cdrazy - and about half the Sales contrast had a clasue where the boyer would pay the difference with their own funds if the appraisal was below SC price. So the buyer overpaid anyway, but the lender had more equity and did not overleverage.

The other deals met in the middle or died. More appraisers came in below SC price during the worst (or best, depending on how you look at it ) of the boom, and that kept the prices from climbing even higher.

 

[glenn walker]

3% rates drove prices not appraisals. Outside of a declining market a buyer is better paying the price than saving a few thousand on the price because he's financing it anyways.

More buyers have been hurt than helped by low appraisals and in a true down market your just gambling by chasing the market further down. That's why unless your a flipper your better not timing markets.

 

[J Grant]

3% rates drove prices not appraisals. Outside of a declining market a buyer is better paying the price than saving a few thousand on the price because he's financing it anyways.

More buyers have been hurt than helped by low appraisals and in a true down market your just gambling by chasing the market further down. That's why unless your a flipper your better not timing markets.

I never said appraisals drove prices. But appraisals did bring values in under SC price more often during the frenzy -

Total BS that more buyers have been hurt by "low" appraisals and those appraisals are not "low" , they are MV and the SC price is above it. IF a buyer wants to go ahead and purchase the property at the higher price, nobody is stopping them from putting more $ down.

 

[Elliott]

Haven's read the other pages, but "Why would it take 20-minutes?" AI's are all pretty fast, but they'd need a number to hit. Would an AI appraisal have more credibility if it took 20-minutes instead of 20-seconds?

 

[glenn walker]

I never said appraisals drove prices. But appraisals did bring values in under SC price more often during the frenzy -

Total BS that more buyers have been hurt by "low" appraisals and those appraisals are not "low" , they are MV and the SC price is above it. IF a buyer wants to go ahead and purchase the property at the higher price, nobody is stopping them from putting more $ down.

I consider price as just that. Value is what's to be gained and that's looking forwards. I can pay a little more today if
I believe it's value is based on tomorrow. That's why my definition of value is always based on tomorrow not today. If I don't think a price is supported then it's going to be a big number not a few percentage points.

 

[J Grant]

I consider price as just that. Value is what's to be gained and that's looking forwards. I can pay a little more today if
I believe it's value is based on tomorrow. That's why my definition of value is always based on tomorrow not today. If I don't think a price is supported then it's going to be a big number not a few percentage points.

You as an indivaul can pay whatever you want
An appraiser is supposed to derive market value. If that differs from a SC price, so be it. Have never read in UPAP where it is about a sale prices being "supported," -

 

[J Grant]

Haven's read the other pages, but "Why would it take 20-minutes?" AI's are all pretty fast, but they'd need a number to hit. Would an AI appraisal have more credibility if it took 20-minutes instead of 20-seconds?

AI can not do an apprisal. IDK right now if AI can do any form of valuation. AVMS are very fast, but they are not appraisals. They are value estimates.

I fail to understand how you think if AI needs a number ot hit that product would be of any use to anyone-

 

[Vermonter]

AI can not do an apprisal. IDK right now if AI can do any form of valuation

From that book your read...we know

 

[shrubberyvaluation]

AVMs already skip HBU on properties with an existing use, same as most non-CG appraisers have been doing.

The new UAD is actually going to change that. Appraisers will teach themselves to do the analysis whether they want to or not. Once they learn they won't forget how to do it, either.

View attachment 99252

Looks like Skippy can just have that in template and never look at it