AI Agents and Appraiser Oversupply

[NC Appraising]

There is a lot of value in driving neighborhoods. Over time, if appraisers don't get out regularly they won't know these markets as well except via overhead maps. Unfortunately, I don't think users will care or pay for it.

100% agree. Location location location.

 

[nachocheesefries]

There is a lot of value in driving neighborhoods. Over time, if appraisers don't get out regularly they won't know these markets as well except via overhead maps. Unfortunately, I don't think users will care or pay for it.

Agreed, but we can't just be in the profession of forced Appraisal Escalade Manufacturing. Most want an affordable option that gets from A to B. But they want the appraiser to show up and look at the house and chat about upgrades etc. too, which serves everyone's interest and always will. Our professional orgs need to be building on that...not subjugating our inspections to Uber drivers.

We don't need to be measuring houses unless Borrower thinks tax records are wrong, no page one of neighborhood filler that NO ONE reads, no cost approach section (just site value analysis) and no lengthy contract section/analysis. They can look that crap up themselves. ANSI is peak retard overkill that is a massive symptom of our problem. Who TF cares! Lawyers? Cut em out with correct limiting conditions.

Save the 20 page reports for high end purchase, divorce, estate, specialty properties, etc. Not refi's. on no brainers.

 

[Vermonter]

Read some books on the subject. That is what I am doing - AI is a powerful tool, but regardless, it does not think and perceive in context the way people do and can make clueless errors despite its sophistication. It has no morality and no ethical core and will act for good or bad as programmed, or hacked in to perform.

I suppose when and if society evolves or develops to the point where it has no regard for human input, AI will take over, at which point it will conclude humans are useless and inefficient, and the AI-programmed drones and autonomous weapons will take us, humans, out. It has facial recognition and data on us, and all it needs to do is programmed domestically or friendly to take us out. Problem solved.

The problem is by the time you finish that book, AI models have gotten exponentially better and more accuracy is all lenders will care about.

This is the part most have to realize- Yes the sky has been falling since the 80s, but now it's falling 1,000,000 times faster. Even the free AI models are making massive leaps in shorter and shorter amounts of time.

As always, it's going to come down to money. As modeling improves the risk/reward of requiring a $600 appraisal to physically visit the subject and drive 3-5 comps vs paying a $20 per hour employee for 5 minutes of their time to ask chatGPT or whatever are going to cross....and it's not going to work in our favor.

Rural appraisers may have more time and I'm sure estate/divorce will be required for some time, but the mortgage lending side is in a rapid decline.

Position yourself accordingly

 

[TerryRohrer]

The number 1 issue with these automated appraisals that I have seen is they select the comparables for you.

Test out aloft. Appraisers can be in denial if they want, but AI photos does a better job than appraisers do....appraisers are stuck on C3.

Give us the formula for accuracy you have (what weight do you put on a new countertop?) and we can all get the same answer. It is a lie to say the programmed computer is more accurate when the appraiser doesn't have the secret weights.

 

[J Grant]

Our lending overlords have apparently figured out that the function of commuting to/from the subject, physically inspecting and driving comps isn't worth the same pay/hr that the analytics and report writing is worth.

Uber drivers get paid to drive, but the pay that goes along with driving doesn't amount to $50/hr.

Who made that decision and why?
AMC aligned managers at Fannie and Freddie because the $ for the inspection has shifted in some cases from the appraiser to the AMC - they will order the PDR for Waivers and hybrids using a nonappraiser to inspect.

The decision to pay less was not about what the inspection was worth as a value-adding component; it was how little they could pay to skim profit. And in order to pay less, they choose to hire nonappraisers for an endless supply of cheaperer labor. This decision was not tech-driven; it was greed-driven.
A decision made possible in part from the idiocy of USPAP not clearly classifying an inspection as part of appraisal practice when the inspection is performed for the purpose of an appraisal.

 

[J Grant]

The problem is by the time you finish that book, AI models have gotten exponentially better and more accuracy is all lenders will care about.

This is the part most have to realize- Yes the sky has been falling since the 80s, but now it's falling 1,000,000 times faster. Even the free AI models are making massive leaps in shorter and shorter amounts of time.

As always, it's going to come down to money. As modeling improves the risk/reward of requiring a $600 appraisal to physically visit the subject and drive 3-5 comps vs paying a $20 per hour employee for 5 minutes of their time to ask chatGPT or whatever are going to cross....and it's not going to work in our favor.

Rural appraisers may have more time and I'm sure estate/divorce will be required for some time, but the mortgage lending side is in a rapid decline.

Position yourself accordingly

Try reading some of these books. They know AI inside and out and can predict how much it can exponentially improve, and IMO, it will not be asked Chat GPT, and it spits out comps and an appraisal statement for $20. ic

 

[shrubberyvaluation]

There is a lot of value in driving neighborhoods. Over time, if appraisers don't get out regularly they won't know these markets as well except via overhead maps. Unfortunately, I don't think users will care or pay for it.

And when you accidently inspectd and took a picture of the house next door that looks almost exactly the same you have to go back again. You get nothing new really.

 

[TerryRohrer]

A lot of folks believe appraisers don't need any local knowledge that can't be gained from Google Maps. That is why appraisers with 20 state licenses from coast to coast are proliferating. Appraisers arguing in support of that are just speeding the process to their own detriment.

 

[Vermonter]

They know AI inside and out and can predict how much it can exponentially improve,

Yes they all thought that and Deepseek launched and tanked the stock market because it's a completely different model and reacting completing different.

I actually think it's less about how good the AI gets vs how much the banking industry pushes to rely on it. Right now it is the new hotness. That may turn out to be flawed come market correction but that doesn't change the fact that they do want to rely on AI more and more.

 

[NC Appraising]

Give us the formula for accuracy you have (what weight do you put on a new countertop?) and we can all get the same answer. It is a lie to say the programmed computer is more accurate when the appraiser doesn't have the secret weights.

Sorry, but I have the secret weights.

I cringe to say what I have said....I seek no pleasure in saying it. I hate big tech...AI will be the downfall of society. It will put in place a caste system.


The same was said when cubi casa came out...I tested that. Just as accurate as appraisers. (I have not tested it out on odd ball or very atypical homes).

I have alamodes smartexchange...I can see what my peers are doing..I am testing out aloft and their photo AI.

This should be a wakeup call, but unfortunately we missed it....

The churn and burn mill appraisers are to blame.

Test it for yourself.