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Commercial Real Estate Brokers And Appraisers: Technology Will Do 90% Of Your Job In A Decade - Forb

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PL1957

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Just in case you thought this was limited to the residential end of the business ...

Commercial Real Estate Brokers And Appraisers: Technology Will Do 90% Of Your Job In A Decade - Forbes

http://www.forbes.com/sites/bisnow/...l-do-90-of-your-job-in-a-decade/#278d77c443b9

The real estate industry is covering its eyes and ears, humming loudly and pretending it is not listening. But a new report says that in a decade, up to 90% of the core tasks undertaken by people in real estate service firms could be done by technology.

The report, The Impact of Emerging Technologies on the Surveying Profession, looks at how a sector that has been slow to adapt to technological change can hold back the tide no longer.
 

George Hatch

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We spend most of our time/effort on data qualification. Not searching for or actually analyzing the information. And we spend our time that way out of necessity.

The calculator elements of what we do go quite quickly - that's often the easiest part of the assignment.
 

Gobears81

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I saw a website recently where you can click on a farmland parcel and it will give a value. Not sure how accurate it is, but a system like that will undoubtedly improve over time. Much of my work is dealing with sparse data, which would be a bit difficult to implement automated valuations on. The projection of 90% automation in a decade for commercial appraising might be just a bit strong, but I don't doubt that these systems could become a significant factor in the near future.
 

NachoPerito

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It is true that more of our work should be automated and we should be filling in the blanks. I am trying to figure out a way to do that better now. But there is 20% of an assignment that can't be automated. Especially with income properties, is all income data going to become public? It would have to in order to get accurate values for income properties.
 

NachoPerito

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Actually, specific to valuation the report says that 90% is vulnerable right now and 100% vulnerable in the next decade. (page 12).

The problem with that is that it would need so much proprietary data digitized. Lease data, expense data, data on renovations, sale data, property characteristics, etc.... very little of that is available now.

You can do a Zillow for commercial properties now, but think how wrong those numbers would be....

But with more data digitized in the future there could be an automated valuation tool that may be accurate enough for the banks and regulators to determine that human-powered appraisals aren't necessary.

So things could be automated, but will they? In 10 years I don't see all the data being available because you would have to change the culture around real estate and make a ton of data public that is not public now.
 

PL1957

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Assuming the Forbes/Bisnow piece accurately reflects the results of the study, I think the authors miss how much technology has changed the valuation profession over the last several decades. IMO, instead of being resistant to change, appraisers have embraced the technology that enables them to do their jobs in a more professional and more efficient manner. If you were to compare a report prepared in 1985 (when I first got into the business) to a current report, the differences in the type and amount of data and analysis would be astounding. And the current report would be produced in a quarter of the time, even though the fee is probably 50% lower.
 

The Warrior Monk

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IMO, instead of being resistant to change, appraisers have embraced the technology that enables them to do their jobs in a more professional and more efficient manner.

I completely. IMHO, too many people fight change and complain about it rather than embrace it.
 

Michael S

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Going to be a bit tougher in a non-disclosure state, especially one that is largely rural.

I can see in a perfect world how if you had accurate data on every transaction you could build an AVM that would probably be able to produce results at the 90-95% confidence level on most properties. However, I think it will take far longer than 10 or even 20 years to get enough accurate data to populate such a system. How would such a system know that the reason a property sold below-market was that the owner passed away and their spouse just wanted to get rid of it? Or someone was planning to move out of the country.? Or that they were just a hardass who wouldn't accept anything less than the full asking price? Digging up that kind of information is one of the ways in which we provide value in the process versus a program just crunching numbers.
 

Red Flint

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Michigan
The Rics report is written by Remit Consultants

"Remit Consulting is an independent, European management consultancy specialising in Real Estate, providing in-depth knowledge since 2003. We help clients with innovation through System selection and planning/implementation; Business Process, Strategies; Compliance; Real Estate Finance. We deliver solutions that are practical, cost-effective and efficient."

In-depth commercial valuation requires acquisition and utilization of private contracts (leases), and also numerated expenses and costs to get to a net annual income. Direct capitalization is enhanced with pocket data for overall rates, and prospective yield capitalization really counts on investor knowledge for equity rates, and experience in defining holding periods and cost(s) of money. This will be very difficult to automate without imprecision.
 
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