20 Minute AI Appraisals Are Coming

[J Grant]

Appraisals or valuations - if they are faster, so what? Every lender using the increased speed will be on the same playing field and still compete against each other - it will not grow their business because here is a finite number of loans on properties taken out every year,

 

[George Hatch]

Absolutely no idea what you intended to convey with this rant. No - profiteering is not the same as a market inefficiency. Market inefficiencies are what allow profiteering to take place. See the difference?

Nobody who shops anything by price has any business complaining about the immorality of the proliferation of more alternatives for the consumer to consider, or the desire by consumers to identify and exercise the alternatives they consider to be the best for them.

If I shop for ANYTHING on Amazon in lieu of patronizing the retail storefront down at the mall then I have no intellectual basis to be complaining about the immorality of Amazon providing me with 674 alternatives to consider. Or about the immorality of me as a shopper choosing the alternative that costs $79.77 when including shipping vs the $80.84 competing alternative for the same pair of shoes.

 

[George Hatch]

I do not find that true at all. What is regurgitating facts—typing info on the form? There are auto-fill programs now, and whether one uses them or not, typing itself is a minor time element. Most of my time is spent poring over the data of sales and listings, maybe calling folks to verify, and OMG—actually THINKING and analyzing—perhaps a foreign concept to you. Which facts to use, how to reoncle them with the MV filter etc.

15 years ago the appraisers working for the AMCs were telling me that DataMaster was saving them 1 hour per report in data transfer time. Transposing data from their data source into their report. (they were attending my CE courses). Little or no analytics at that point.

25 years ago when I didn't have to pay for the typing, it used to take me about an hour to dictate the original writing in my narrative reports. I had to have all my SR1 completed and it's easier to fill out an adjustment grid or an equation than to dictate it, but as far as the writing goes it's hard to compete with oral dictation.

Then when I go back to review what I did, the "look" of the material is all-new to my eye even though it's all my own material. I'm reading what I actually said, not what I "remember" seeing. That makes it easier for me to catch my own inconsistencies or phrasing problems. Reviewers know: it's way faster to review the content of a report than it is to write a report. Reviewers also include other steps in their process so I'm not talking those additional functions, just the reading-for-content part.

 

[J Grant]

An excerpt from NYT-
Last month, an A.I. bot that handles tech support for Cursor, an up-and-coming tool for computer programmers, alerted several customers about a change in company policy. It said they were no longer allowed to use Cursor on more than just one computer.

In angry posts to internet message boards, the customers complained. Some canceled their Cursor accounts. And some got even angrier when they realized what had happened: The A.I. bot had announced a policy change that did not exist.

“We have no such policy. You’re of course free to use Cursor on multiple machines,” the company’s chief executive and co-founder, Michael Truell, wrote in a Reddit post. “Unfortunately, this is an incorrect response from a front-line A.I. support bot.”

What happens when A.I. hallucinates?​

Researchers and developers told The New York Times in 2023 that A.I. hallucinations would be solved. Instead, Cade Metz explains, they’re appearing more often, and people are failing to catch them.

 

[alebrewer]

I do not find that true at all. What is regurgitating facts—typing info on the form? There are auto-fill programs now, and whether one uses them or not, typing itself is a minor time element. Most of my time is spent poring over the data of sales and listings, maybe calling folks to verify, and OMG—actually THINKING and analyzing—perhaps a foreign concept to you. Which facts to use, how to reoncle them with the MV filter etc.

I swear you argue just to argue. The following items would be considered acts of regurgitating facts:

• Address
• Borrower
• OOR
• Legal
• APN
• Taxes
• Census
• Lender
• Client
• Lender Address
• Purchase Price
• Assignment type (purchase/refi)
• listing history
• contract terms
• flood map info
• site size
• site dimensions
• zoning
• aerial map
• flood map
• site map/survey
• improvement measurements
• improvement sketch
• room count
• GLA
• site amenities
• improvement amenities
• and on and on and on

Analysis components of an assignment:

• contract review and analysis
• neighborhood description and analysis
• site analysis
• H&BU analysis
• market analysis
• improvements analysis
• sales comparison analysis
• CA analysis
• IA analysis
• site value analysis

Can you see the difference now?

 

[J Grant]

I swear you argue just to argue. The following items would be considered acts of regurgitating facts:

• Address
• Borrower
• OOR
• Legal
• APN
• Taxes
• Census
• Lender
• Client
• Lender Address
• Purchase Price
• Assignment type (purchase/refi)
• listing history
• contract terms
• flood map info
• site size
• site dimensions
• zoning
• aerial map
• flood map
• site map/survey
• improvement measurements
• improvement sketch
• room count
• GLA
• site amenities
• improvement amenities
• and on and on and on

Analysis components of an assignment:

• contract review and analysis
• neighborhood description and analysis
• site analysis
• H&BU analysis
• market analysis
• improvements analysis
• sales comparison analysis
• CA analysis
• IA analysis
• site value analysis

Can you see the difference now?

I understand the difference, but Regurgitating ( reporting ) the facts is already the least time-consuming part. Auto fill programs are available - regardless, the facts still have to be checked - it is the remainder that takes up the bulk of time, and with a 500k loan at stake, good for 30 years, I fail to see why saving 20 minutes or an hour in a valuation is so important. Credibility is more important.

 

[Terrel L. Shields]

There has already been unchecked 'inflation' in house values and one of the results are fewer and fewer are able to afford houses.

The problem might be the price of land more so that price. If land is affordable, people would build barndominiums, install manf. housing, or tiny homes. But if lot prices exceed $200k then all bets are off. The lower quartile of people are shut out. So, the next question is demographics. As we are not replacing our population the population will necessarily begin to drop out people to even buy homes and housing might be in surplus as soon as 20 years or less. I will be back at room temperature by then, but the next 2 generations may have an abundance of older housing to pick from... We've not replaced people since the Great Recession. 2.1 births per couple is necessary.

Or about the immorality of me as a shopper choosing the alternative that costs $79.77 when including shipping vs the $80.84 competing alternative for the same pair of shoes.

Never mind you have to drive to the store at some cost. It is simply cheaper to order and have it delivered than to deal with driving there and back for one or two items. Any canned food item is cheaper on line - although I use the local grocery for fresh foods and meat, milk, eggs, etc. Same with some items. We found a new control pad for my lawn mower online for $80 less than the local dealer. yeah, I had to wait 4 or 5 days extra to deliver it but so what? I am trying to buy a 6' finish mower but the local dealer of the brand I want does not stock them and won't order a 6' for me. I am bypassing them trying to deal directly with the company but that's tricky too... MSRP plus $200 shipping charges.

What happens when A.I. hallucinates?

 

[George Hatch]

If all that happened in the final workproduct was rote regurgitation you would have a point. But when the appraiser's starting point is where the machine left off and the appraiser is doing whatever else they need to do to develop their own opinion then that is what the appraiser owns.

If I review an appraisal report that you wrote and I end up agreeing with it, the original value conclusion is by your hand but my agreement (or disagreement) with that value conclusion is by my own hand. I own that specific [opinion of value], not you. Even if I add nothing else to what you did.

 

[alebrewer]

with a 500k loan at stake, good for 30 years, I fail to see why saving 20 minutes or an hour in a valuation is so important. Credibility is more important.

You're making the misinformed assumption that these are mutually exclusive - which they're not.

 

[George Hatch]

I understand the difference, but Regurgitating ( reporting ) the facts is already the least time-consuming part. Auto fill programs are available - regardless, the facts still have to be checked - it is the remainder that takes up the bulk of time, and with a 500k loan at stake, good for 30 years, I fail to see why saving 20 minutes or an hour in a valuation is so important. Credibility is more important.

The home gardener only uses hand tools and hand labor. The retail value of tomatoes at the Piggly Wiggly doesn't economically justify the use of expensive solutions for pest control, let alone any automation. They might even be losing money if they include the value of their own labor at their normal hourly rate. The professional farmer uses $1M combines and aerial spraying and such. At the industrial scale small improvements in efficiencies add up.

Same in the lending business. If you were a high-volume lender and were operating at the industrial scale .....

However much time the appraisers spend (just) writing 90% of the report, if you could pay for those hours at 1/10th of the rate the appraisers charge you would do it. However many hours time appraisers spend on making appointments and completing the field work, if you could pay for those hours at 1/3 the rate the appraisers charge you'd do it. When the scale is measured in the hundreds or the thousands, it doesn't take very long to offset the initial implementation costs. The math is the math.

The service we sell isn't any more sacred or significant to the economic well being of our society than any other form of accounting or due diligence. The "we're special" pixie dust wore off a long time ago. The use of 90% boilerplate in 90% of the appraisal reports demonstrates that much. I wish we were special, but we're not.