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AVM's and AO-18

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Frederick R. Ruffell

Thread Starter
Senior Member
Joined
Jan 21, 2002
Professional Status
Certified General Appraiser
State
California
I received the folowing today,



Appraisal Management Company Presents
eValu*
(* Patent pending)

www.evalu-online.com


Dear Appraiser,

Thank you for your interest in Appraisal Management Company’s (AMCO) patent-pending product, eValu. In creating this new product, we have made every effort to build a tool that is useful and reasonable in cost to lenders, as well as profitable and practical for appraisers. Meeting these opposing needs was a difficult challenge, but we are confident that we have found an acceptable balance.


Fee, Turn Around Time and Training
The standard fee for eValu is $50. Expected turn around time is 24 hours. A more detailed discussion of both fee and turn time follows. Upon receipt of your completed signed agreement we will provide hands-on telephone training at a time that is convenient for you.

The following information explains what eValu is and how the process works. If you are inter-ested in completing eValu assignments, please fill out the attached application and fax it to 440.684.5530, attn: Mike Kanetsky.


Product and Procedure
eValu is an umbrella for two separate products: an Appraiser-Assisted Valuation and the Desktop Valuation. Simply put, an Appraiser-Assisted Valuation is the process of an appraiser reviewing the output of an AVM and making a judgment regarding the credibility of the output (comparable sales, value conclusion, etc.). The function of the appraiser is to determine if the output of the AVM is appropriate for the purposes of the assignment. If the appraiser does not agree with the output of the AVM, then s/he will be asked to complete a Desktop Valuation.

The Desktop Valuation is a limited appraisal that is completed without inspection of the subject property or comparables. Instead, the value is determined using data from public records, property databases, and/or the appraiser's personal files. An appraiser familiar with the local market will employ the Sales Comparison Approach to determine the estimated value of the subject property.




Below is a step by step explanation of the process:

1. AMCO processor e-mails the order notification to the appraisal firm; notification includes a confirmation of the previously agreed upon fee, property information, and a link to the AMCO web site.
2. Appraiser clicks on link within the e-mail to access the AMCO site.
3. Once the appraiser accepts the order, the output of the AVM is generated and appears on screen.
4. Appraiser reviews output of the AVM.
5. Appraiser determines whether s/he accepts or rejects the output of the AVM.
• If the appraiser clicks the "Accept Value" button, then the assignment is complete. There are no e-mail attachments to send (PDF conversions, etc.).
• If the appraiser clicks the "Reject Value" button s/he will be prompted to complete a Desktop Valuation.


The Desktop Valuation
The appraiser will complete a valuation of the property by searching available databases (public records, CMDC, MLS, PACE, etc.) for the subject property and comparable sales. S/he will then complete a grid, make comments, input a value conclusion, and click “Submit.”

The upgrade to a Desktop Valuation will occur automatically in the following situations:
• If the AVM does not get a "hit" (does not return a value or locate subject property data).
• If the output of the AVM is, in the judgment of the appraiser, not acceptable.
• If the AVM does not cover the county where the subject property is located.


Further Upgrades
If the appraiser rejects the output of the AVM and deems that the Desktop Valuation is not appropriate for a property of this type, then s/he can request an upgrade. The decision to approve or decline the upgrade will be e-mailed to the appraiser within several hours.

The appraiser is the expert familiar with the subject neighborhood and we rely on the appraisers expertise to determine if an upgrade is necessary. For example if:
 The subject property is not typical for the neighborhood
 There are too few sales available to evaluate the subject property
 There is a lack of data

Fee
We are currently paying a standard fee of $50 for completing either the Appraiser-Assisted Valuation or the Desktop Valuation. We believe this fee to be reasonable based on the following:
• If the appraiser accepts the output of the AVM (which, based on our experience, will be 25-50% of the time), then the entire process should take less than 30 minutes.
• If the appraiser rejects the AVM and completes the Desktop Valuation, this process will typically take less than one hour.
• There are no travel or mailing expenses, and administrative costs are minimal.
• During the course of completing the Desktop Valuation, the appraiser will research comparable sales and will not duplicate that work if an upgrade is necessary.
• AMCO pays for the AVMs, regardless of the appraiser's opinion.


Turn Around Time
The expected turn time for the eValu is 24 hours. However, if upgraded to a traditional appraisal product (i.e. drive-by 2055), then normal turn around times apply.

Application and Agreement
If you have received orders from AMCO within the past 12 months you need only complete the eValu Agreement. If you have not completed appraisals for AMCO in the past 12 months please complete both the eValu Agreement and the Appraiser Application.

Applications and agreements can be e-mailed to [email protected] or faxed to 440.684.5530, Attn: Mike Kanetsky. If you experience problems or have questions call 800.399.2626, ext. 5252.


Summary
Lenders have communicated a need for a valuation product that provides a higher degree of accuracy and wider geographic coverage than current automated valuation models (AVMs). Appraisers, pressured by decreasing volume of business and increased competition from alternative valuation products, need a tool that will leverage their expertise using current technology. eValu is a viable, practical solution to the needs of both lenders and appraisers.

During the training you will see that we have designed a system that is easy to use, and established reasonable turn around times and fees.

I sincerely believe that eValu will allow appraisers to compete effectively and play an essential role in the rapidly changing market for residential property valuations. I look forward to working with you as we launch the next generation appraisal product.






Not that I would consider touching this, but I wonder about the appraisers that are. Can an appraiser "review the output of an AVM and make a judgment regarding the credibility of the output (comparable sales, value conclusion, etc.). The function of the appraiser is to determine if the output of the AVM is appropriate for the purposes of the assignment." and NOT be performing an appraisal, appraisal review, or appraisal consulting assignment, and therefore are not bound by USPAP as explained in AO- 18? It seems that we will probably need more details as to just what is provided to the appraiser and what is delivered to the lender but lets just kick it around. :twisted:
 

Warren Sumner

Sophomore Member
Joined
Jan 19, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Any appraiser who accepts these is basically just providing their E&O insurance to secure the collateral property...correct??? I would be interested to hear the various appraisal boards' view on this. If the mission of the NCAB is indeed to protect the consumer, seems like they'd want to get rid of these things.
 
Joined
Jan 16, 2002
I'll bet some appraiser thought this one up. When will all the hype and bull**** stop ? Do these people actually believe their own crapola ?
 

rtubbs

Junior Member
Joined
Jan 15, 2002
We need to come up with a slogan, something like "Just Say No to AVM's", and all band together to halt the nonsense.

If these folks are so darned smart to develop such a great and marvelous "Tool", let them sell the idea to the UW's, Fannie, Freddie and that way they can hang themselves, instead of asking an appraiser to kindly insert their neck in the noose.

Frustrating, isn't it?
 

graindart

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Montana
I clicked to their site, and this is one of their statements on the homepage:

"eValu delivers an accurate USPAP compliant valuation for under $100 in 24 hours or less – in a paperless, all web process"

I'm guessing that if this is one of their marketing statements, as an appraiser you probably couldn't get away with saying that it's not an appraisal and so you aren't bound by USPAP. Especially when they're directly claiming USPAP compliance in their product delivered to the customer.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Sure you can do it; you are only re-selling data! USPAP?? What's that? You silly appraisers have some strange rules.

P.S.
If you hit "reject" too many time in a week, you may be subject to suspension or other disciplinary actions.
 

Residential Appraisal Ser

Sophomore Member
Joined
Jan 26, 2002
Forum: The American Guild of Appraisers recommed that AVMs that you assist be done with an inspection of the site and speaking to the home owner. That you don't do the appraiser assisted AVM unless the Company pays you a reasonable fee for the inspection. Any value that you sign off on, will make you liable as a licensed appraiser under USPAP.

The Guild is fighting that all AVMs must be inspected by a licensed apprasier, and that appraiser knows the neighborhood. Your license is worth money as a trained professional. Don't sell it short. AFL-CIO has taken a strong stand regard AVMs and licensed apprasiers. (See American Banker 4/27/02)

Hang tough.
In Solidarity

William Sentner
President American Guild of Apprasiers OPEIU AFL-CIO
[email protected]
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Is it:

An Appraisal Assignment ???

A Review Assignment ???

A Consulting Assignment ???

What about Departures ????

Too many USPAP issues here!!!!!

Besides, it's totally INSULTING :!: :!: :!:
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
"Lenders have communicated a need for a valuation product that provides a higher degree of accuracy and wider geographic coverage than current automated valuation models (AVMs)."

And why would they contract for service from the same AVM companies they think cannot provide accuracy and coverage?
 

Dale Smalley

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Steve

What they are asking "is the output of this AVM reasonable?" To answer the question you must know your market or you must reject the AVM and upgrade to a drive by or appraisal with an interior inspection.

AVMs are not for all markets but not every property needs a full URAR.

Check your USPAP and you will see you can do them as long as they contain the certification and limiting conditions. It will be interesting to find out how effective this model is for the lender. Now the computer can blame the appraiser for a bad value. :twisted:
 
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