Hybrid appraisal report

[Tom D]

Interesting thread. The living dead arguing with the living dead as to what is works best.

You all see the tidal wave coming. Hope you have found another route to survive.

 

[George Hatch]

A

Well, Bro, it is because things are different with these.

I believe very few appraisals have/had any significant factual errors about the subject. At one time, I did hundreds of field reviews, and I never found the information about the subject to be the problem. The problem was the comps selection or adjustments /or other issues. wrt desk reviews- those that do, my impression is they are QC reviews- regardless, they are not origination appraisals. 2055's are also not commonly ordered for most origination work. If you believe that 2055 has a better chance of faulty intel , then why compound the problem by letting a third party do a CDC on a 1004 form hybrid, turning it into a 2055-type weakness?

These hybrids are the first time large-scale origination appraisals will be based on third-party information about the subject. Time will tell - so far, just the lenders using the AMC's are using them - an outfit like Class Valuation pays $60-$75 -who are they going to get to do these, and why would anyone making that little money care much about teh result? What is Class going to do, fire them? Would it matter if doing a PDC is similar to paying for Insta Cart or Uber Eats?

I doubt any lender with a choice would order these, I bet the borrower pays the same for a hybrid as they do when the appraiser inspects. It is just a way for the AMC;s to pay more money and hopefully their use will stay with those AMC's.

I understand what you're saying but I will point out that an appraiser working with a PDR is working with more information about the subject - including current pics - than is available to them when performing a 2055. More information with none of the exposure to liability for any mistakes involving the subject attributes. The E&O providers should be excited about that.

It's too bad that more of the lenders didn't avail themselves of option of accepting appraisal reports performed by trainees countersigned by a "did not inspect" supervisor. There's no telling how many appraisers would have jumped at that. It would still keep the market for services permanently flooded but perhaps offset the impetus for PAREA and hybrids.

 

[djd09]

this is the truth...the woke jokes are in charge somehow...and they really don't worry much about when paschal shows up pretending to be the appraiser....it's not their house

 

[Tom D]

It's too bad that more of the lenders didn't avail themselves of option of accepting appraisal reports performed by trainees countersigned by a "did not inspect" supervisor. There's no telling how many appraisers would have jumped at that. It would still keep the market for services permanently flooded but perhaps offset the impetus for PAREA and hybrids.

Why is fannie all of a sudden separating the inspection from the valuation people. They are test running this to see if they can do these inspections correctly, cause they want to be doing the valuations, not yous. They need the ingredients, they already have the recipe. It's part of the means for the end of appraisers doing it.

 

[George Hatch]

I wish it were otherwise but that seems to be the case. Recipe seeks ingredients. Really, that's the same problem that appraisers spend most of their time trying to solve. How to obtain and sift through the relevant data in order to get apples that are as similar as possible to our subject apple. 95% of out time/effort is going to obtaining and sifting through and wrangling the data and importing into the report, with the last 5% of our time and effort going into refining that range of value indicators from the direct comparables via adjustments. If that amount of time even comes out to 5%

I daresay it isn't just the GSEs that aspire to an AVM that can outperform appraisers as a group on most if not all appraisal assignments. Most lenders would aspire to it, too. They just don't handle as many transactions (and the specifics of those properties) as do the GSEs. Only the GSEs are in a position to aggregate the specifics of these properties and transactions.

If we take this play to its logical conclusion it is conceivable that the GSE usage of appraiser data in their AVM might end up being just an interim step for a few years while they build their own database of PDR info. Even to the extent the PDR data has errors attributable to the CubiCasa apps - which will continue to be refined - the types and rates of those errors will be consistent in nature and therefore more manageable in the analyses which follow.

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And we're not really even touching upon the possibilities with AI. Not most of us, anyway. But Bert is a tech-forward guy and he seems to be working on it.

Bert already routinely goes to AI to get a written summary of the info on various topics he posts on. The AI aggregates information from various sources and summarizes it. Bert then uses the AI output to supplement his own reasoning and writing. The way Bert has been using it demonstrates that an AI is already capable of writing up a usable neighborhood, site or improvements summary, or analyzing broker comments from an MLS listing so long as it had access to all the various sources of information it takes to perform such analyses.

I have long thought that all the action in the appraisal is in aggregating the data from various sources and breaking the dominant attributes down to a usable "uniform" scale of some sort. Not in fretting over the precision of fireplace adjustments. IMO the only thing holding the AVMs back has been the inconsistent availability and detail in the data.

Actually, if Bert isn't already working with the data aggregation angle idea then perhaps he should be. Somebody is going to do it and such an app will be more savvy to SFR issues if it's an SFR appraiser doing it. IMO.

 

[ucbruin]

"Actually, if Bert isn't already working with the data aggregation angle idea then perhaps he should be, because somebody is going to do it and such an app will be more savvy to SFR issues if it's an SFR appraiser doing it. IMO."

Not a good idea....
Some of his posts exhibit signs of bias....

 

[J Grant]

I understand what you're saying but I will point out that an appraiser working with a PDR is working with more information about the subject - including current pics - than is available to them when performing a 2055. More information with none of the exposure to liability for any mistakes involving the subject attributes. The E&O providers should be excited about that.

It's too bad that more of the lenders didn't avail themselves of option of accepting appraisal reports performed by trainees countersigned by a "did not inspect" supervisor. There's no telling how many appraisers would have jumped at that. It would still keep the market for services permanently flooded but perhaps offset the impetus for PAREA and hybrids.

That is true regarding the PDC and information ,however it is still better for the appraiser to do their own inspection - first hand observation vs third hand.

The impetus for hybrids/bifurcated would have arisen from the stakeholders and entities because it feeds the profiteers/AMCs far better than allowing appraisal trainees to inspect. An AMC paying $60-$75 to a PDC person might charge the lender $200 and profits from teh difference - the AMC does not get to profit from an appraiser trainee. The AMC also profits, since hybrids allow their staff appraisers to triple their output of the staff, stuck at a desk and to appraise in far-off areas while low-paid PDC people go to the properties. The AMC also profits from ordering PDC for waivers ( no appraisal but often uses a PDC ).They chose to allow nonappraisers to do this work rather than appraisal trainees because appraisal trainees are finite; a pool of anybody with a pulse is infinite. The appraisal trainee is under the control of the appraiser, a PDC person is under the control of the AMC.

 

[J Grant]

I wish it were otherwise but that seems to be the case. Maybe not within the next 5 years but I'd be a little surprised if the fee appraisal business for residential or "routine" commercial made it 15 more years.

I daresay it isn't just the GSEs that aspire to an AVM that can outperform appraisers as a group on most if not all appraisal assignments. If we take this play to its logical conclusion the GSE usage of appraiser data in their AVM might end up being just an interim step for a few years while they build their own database of PDR info. Even to the extent the PDR data has errors attributable to the CubiCasa apps - which will continue to be refined - the types and rates of those errors will be consistent in nature and therefore more manageable in the analyses which follow.

Bert is a tech-forward guy and he already routinely goes to AI to get a written summary of the info that the AI aggregates from various sources. Which he uses to supplement his own reasoning and writing. I strongly doubt an AI would be incapable of writing up a usable neighborhood, site or improvements summary, or analyzing broker comments from an MLS listing so long as it had access to all the various sources of information it takes to perform such analyses. I have always thought that all the action in the appraisal is in aggregating the data from various sources, not fretting over fireplace adjustments. The only think holding the AVMs back is the extent and consistency of the data.

Actually, if Bert isn't already working with the data aggregation angle idea then perhaps he should be, because somebody is going to do it and such an app will be more savvy to SFR issues if it's an SFR appraiser doing it. IMO.

IDK- it depends on how borrowers, RE agents and the lenders themselves see these products - the fly in the ointment for GSE work is it is taxpayer backed, therefore the lenders do not get to just decide we like AVM's better - it depends in future perhaps how the WAIVERS perform over a long period of time - they still are relatively new/less total volume.

As long as the AMC system is around, they will make sure they profit on any product used for valuation, be it an AVM, a WAIVER, an appraisal, a PDC, or a combination thereof. Imo there will always be a need for apparisers but it will shrink depending on how much control people want to give to tech ( which can be hacked, manipulated or just plain wrong ) and how much society in general wants to see tech barons and anonymous corporations control every aspect of their lives with no qualified independent people around to keep things on track.

We see how well removing editorials and opinions from journalism worked out—now social media, once thought to be a haven for exchanging ideas, has become saturated with foreign nations impersonating Americans, creating fake content and posts to influence our political outcome and economy.

The downside of tech is pretty dark and that is why we see increased hacking and ransomware and fraud and manipulation of it.
Too many people with no vested outcome removed and entire databases of properties can be hacked and sold to criminals, and a slew of fake mortgages or equity lines created - using AVM;s

Why not take tech and everything third party a step further and create fake houses and condos to finance with the proceeds going to criminals' slew of mortgages based on using a VA<, with a ty Casi Cuba floorplan, and AI-created photos and signed off on by a false identity PDC "person."

 

[J Grant]

I wish it were otherwise but that seems to be the case. Maybe not within the next 5 years but I'd be a little surprised if the fee appraisal business for residential or "routine" commercial made it 15 more years.

I daresay it isn't just the GSEs that aspire to an AVM that can outperform appraisers as a group on most if not all appraisal assignments. If we take this play to its logical conclusion the GSE usage of appraiser data in their AVM might end up being just an interim step for a few years while they build their own database of PDR info. Even to the extent the PDR data has errors attributable to the CubiCasa apps - which will continue to be refined - the types and rates of those errors will be consistent in nature and therefore more manageable in the analyses which follow.

Bert is a tech-forward guy and he already routinely goes to AI to get a written summary of the info that the AI aggregates from various sources. Which he uses to supplement his own reasoning and writing. I strongly doubt an AI would be incapable of writing up a usable neighborhood, site or improvements summary, or analyzing broker comments from an MLS listing so long as it had access to all the various sources of information it takes to perform such analyses. I have always thought that all the action in the appraisal is in aggregating the data from various sources, not fretting over fireplace adjustments. The only think holding the AVMs back is the extent and consistency of the data.

Actually, if Bert isn't already working with the data aggregation angle idea then perhaps he should be, because somebody is going to do it and such an app will be more savvy to SFR issues if it's an SFR appraiser doing it. IMO.

Real estate is not "data" - so it will never be consistent because teh way RE is bought and sold or financed varies because of teh humans involved - unless all humans become replaced by robots, in which case none of this matters - a world of no feelz and all cold data - that is what some envision so if there is a God and that is what they want, to have humanity wipe themselves out in the mae of efficiency, then that will be our fate. A few of us are preserved to be exhibited in a zoo for the robots to look at and laugh about how smarter they are than the primitive humans with their messy feelings.

 

[alebrewer]

world of no feelz and all cold data

feelz can be modeled as well - and can be done so quite accurately. And, even though individual preferences may differ within some sort of confidence interval, humans still act in a manner that maximizes utility for $ spent. It's the 'feels' (primarily) that elicit - or cause - there to be a range of value (i.e. a confidence interval).