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AVM's & the future

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vargasteve

Junior Member
Joined
Jan 21, 2002
Professional Status
Certified Residential Appraiser
State
California
In my estimation, AVM statistics & the AVM profiles will work their way into our reports someday. Can you imagine having to put the AVM value score into your report, and then either support it with a desk top or 2070 / 2075 form, or dispute the value and request an upgrade based on X X X X data.

Right now, companies offer this service (one of them is AMCO) - appraisers have to support their AVM (for $50) (about an hours work) or request for upgrade based on data...

Our data provider (realquest.com) offers a AVM product that we use occasionally to see what that profile looks like. Generally speaking in tract areas they are reasonably acurate - however it can appraise a mouse for an elephant or visa versa. But I believe that at some point, things will improve.

I know our friends in the Mortage / Lending & Consumer industries have to deal each day with FICA scores & deals are made or broken based on scores - period & end of story. A lender can have a "willing & able" buyer who's is shut down by some #FICA score!!! (yes some of them also have terrible credit)

If they can score a person like that, then why not a house ( I didn't say it was neccesarily accurate) - and if so - why shouldn't you the appraiser have to explain why the computer is or isn't correct on any given assignment..? AH HA my friend - now you understand...
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
<span style='color:red'>"Our data provider (realquest.com) offers a AVM product that we use occasionally to see what that profile looks like. Generally speaking in tract areas they are reasonably acurate - however it can appraise a mouse for an elephant or visa versa. But I believe that at some point, things will improve. "</span>

Well, I strongly disagree with your contention that AVM's are reasobably accurate in tract areas. For example, new construction tracts only appear easy for an AVM, Quite the opposiite is the closer to the truth. I do work in these type os S/D's all the time and I can tell you most reported sales are not what they appear to be. Square footages are way off, Sale price is inaccurate because there are huge concessions built in to these prices. Some dont have the huge concessions, others sales show multiple owners,(one company buys the house and then adds a nice rpofit and resales it) in other words your AVM's are reporting sales more than once in a given time period.

This is only in MY MARKET, you may be correct in yours. From what I am hearing from other appraisers in other markets, my story, not yours, is the norm.

Please dont use the word Appraiser in the same sentence for evaluation of an AVM. It puts me in a bad mood. :-(
 
W

walt kirk

Guest
"If they can score a person like that, why not a house" Have you ever looked at your credit report or FICO score? I know that my credit report contains many mistakes including an account opened two years before I was born. I once tried to have the report corrected and later discovered that the credit agency reported that I was dead!

Like every other computerized data base AVM's are only as good as their data, garbage in- garbage out.
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Well, my credit report contained an alais which, I found out, was another person with a SSI number very close to mine. Needless to say, this "person" had a VERY bad credit rating. I have been trying to take this person off my credit report for the better part of 1 year. So much for data bases!

I agree, I work new subdivisions all the time and find that contractors consistitently over report the GLA on thier new construction. Also, sale prices are constantly on the rise in these areas due to inflated expetations of builders and Realtors. Without a REAL appraiser to compare these new areas to the overall market the results are false.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Those that want garbage buy the AVMs.

Those that want a real appraiser, carefully chose the appraiser, verify the data, and pay full price for a real appraisal.

AVMs and credit reports are very similar animals. Full of garbage.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
The reality is that the Feds are encouraging Credit Lending not Collateral Lending. That puts the credit score at a much higher premium than the collateral, so the appraisal becomes secondary. For that matter, if the appraisal is creating problems with closing loans (blighted, contaminated areas), then the Feds will accuse the lender of violating Fair Lending regulations. Such is the Alice in Wonderland world of lending we are now living in. I saw this first hand with one of the nations largest lenders.

Roger
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
AVM's cannot do what I do, and AVM's cannot compete with the services I offer...I don't believe they ever will be able to.

Market your services to a different clientele...mortgage lenders have been working overtime to eliminate the appraiser, they don't want us, and would be happy to replace us with AVM's to make their loans. Afterall, it's even easier to manipulate the numbers in a computer than a human being!

-Mike
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
8O
I just got a gander at that $50 AVM support thingie... and it scares the HECK out of me... Ain't no room for any additional disclaimers, nor CYA verbage, nor an adequate scope and you do the whole thing from your desk 8O so I see nothing that covers USPAP required departure notices.

I am not saying that here might not be some reasonable way to do something "sort of" like this.. with the proliferation of data it just might be possible... I mean WAKE UP folks the coffee is crystalised at the bottom of the pot and smokin...

But signing off that I accept the AVM value AND that I fully understand how it (the AVM) works?!?!?!?!!!! My voice hits the high registers on that one.
Not to mention that covering all USPAP required issues isn't IN this form.

I don't think so...

(an Hours work? eeekkk.) I am going to address this to my state board...
 

vargasteve

Junior Member
Joined
Jan 21, 2002
Professional Status
Certified Residential Appraiser
State
California
Dear friends,

I never said AVM's were reliable in my estimation (I'm not the one wanting to use them), however statistically in some areas they have some value from what I've seen.

I have no vested interest in the AVM product - nor does anyone on this forum, however on the other hand they are being used.

I believe that these type of products will take away some of the slam dunk / easy assignments - I also believe there still will be plenty of work for us - the market will take care of itself on that. Its just my opinion that someday the AVM will influence what type of assignments we recieve & perhaps even require us to address why our value might differ from the statistical one.

Yes the AVM 'CANNOT' replace us EVER EVER, but does anyone actually know how much of the total workload in 2002 was completed by & AVM product and lended on based on that criteria :?: And do you think that % will increase over the years..... :?:

Once again - there will be plenty of work for the real appraiser, always will be :D
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Steve:
I diverged and then digressed :oops: (unintentionally) from the theme of your post...

Actually I quite agree with you and think it would make certain of my competition more than a little uncomfortable to be facing a directive to explain a divergence :twisted: from an AVM output...

But certain weasels would manage... :evil:

On the other hand if AVM output made it more apparent which appraisers were CONSISTANTLY above and ONLY came in above AVM 'scores' methinks it would be a boon to the industry :D .

That form shocked and startled me... sorry for the sidebar :oops:

Actually although I think it unlikely that AVMS would work well in most areas I cover... Their use would be a positive for honest folk, and a thronf or the number-hitters :twisted:
 
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