I am not doing the 3.6 FORM deal

[nachocheesefries]

Hello ya'll, I'm a hillbilly. Am I on the right Thread?

Thread title........"I'm not doing the 3.6 FORM deal"

I didn't know I made deal with anybody. What's the deal?

Am I dependent employee or independent contractor?

I don't want to use the word "slave". "Slave" has negative connotations.

You are....

meant to say dill.....deal does seem a bit off, in hindsight.

 

[Fernando]

Since the new form won't be required until Nov 2026, I will still use the old form until I'm "forced" to use it.
Just like the1004MC, I waited til I was forced to include it in my report. Since then, it took more time and effort and less profit in doing appraisals.

 

[alebrewer]

Why is it a benchmark of "accuracy" for an AVM compared to the SALE PRICE?

Got a better idea for how to measure accuracy? Compare the AVM to an appraisal?

 

[alebrewer]

Redfin and Zillow vary by 8% which I think is crazy with how much data there is. I trust it as much as I trust this....

View attachment 104947

ok, so couple of questions: (1) that's about as tight as two appraisers, right (inside 10%)? (2) is the value of your place somewhere close to what these are showing?

Point being that market participants - whether they're buyers, sellers, lenders, Realtors, whomever - all trust these sites to provide them meaningful information. And why not? They're free and the greedy appraisers are gonna charge $500-$600 for the same info. Wanna emulate how buyers and sellers make their decisions? Follow Zillow, Redfin and similar.

 

[alebrewer]

On the other hand, if there were no appraisals to act as a check on lending values, in enthusiastic times sales prices would be all over the place, and how would the lender know he is secure in his collateral valuation? Would lenders feel they are in a riskier circumstance? Would that incline them to require more downpayment? Also, if sales in a neighborhood are all over the place, how would a buyer know if his offer makes equitable sense for him insofar as being able to get OUT of the property if needs be. Talk about the Wild Wild WEST-- Zowie! If I were buying a home, especially in our current high-price market, I'd sure like some kind of assurance that I'm not going to owe a bunch of money to the bank beyond what I can sell the property for. That's one reason we are licensed in behalf of the public.

Again, my statement said that, 'from a risk perspective' there is no reason for an appraisal if the loan is paid off according to the terms. Of course there are other reasons to procure an appraisal, and your example is a stellar one. The prudent buyer won't want to pay more for a home than it's worth - and an appraisal is still the gold standard for assessing said value. How much longer, though? Look at how quickly even appraisers have adopted AI into their everyday bickering. If someone naively assumes buyers, sellers, and even Realtors aren't doing the same things WRT estimating value, they're seriously misguided. The only reasons (I can think of) for why appraisals have been the gold standard for so long are: (1) other stakeholders didn't have access to the data we had - now they do, and (2) because they BELIEVED appraisals were 'right' - and many no longer do. Whether its because of false narratives about bias, or folks standing appraisers up against (what is becoming) really solid valuation data, perceptions about the quality of appraisals have changed...

 

[J Grant]

Got a better idea for how to measure accuracy? Compare the AVM to an appraisal?

If the goal is a market value opinion, then yes !

Your post question is vague - what to write how to measure accuracy? How to measure the accuracy of WHAT?

Since an appraisal develops market value ( as an opinion), then theoretically, yes, one would compare each and every AVM to an appraisal done at the same time on the same property. And see what comps were used and what adjustments were made ( or algorithms relied on in AVM )
An AVM has a confidence score around its value estimate, with 95% considered a high confidence score. Meaning even the best of them can be " not accurate, or less accurate" within a 5% tolerance. Add a much wider tolerance for a lower confidence score.

Look up the definition of accurate. It mentions other qualities beyond the numerical.

 

[J Grant]

ok, so couple of questions: (1) that's about as tight as two appraisers, right (inside 10%)? (2) is the value of your place somewhere close to what these are showing?

Point being that market participants - whether they're buyers, sellers, lenders, Realtors, whomever - all trust these sites to provide them meaningful information. And why not? They're free and the greedy appraisers are gonna charge $500-$600 for the same info. Wanna emulate how buyers and sellers make their decisions? Follow Zillow, Redfin and similar.

So ?
Buyers can make wrong decisions ( esp with overpayment/emotionally driven ) RE agents are idiots wrt pricing and the comps they use in a CMA. They are salespeople, out to make a deal and protect the deal once the contract is signed.

 

[alebrewer]

If the goal is a market value opinion, then yes !

Your post question is vague - what to write how to measure accuracy? How to measure the accuracy of WHAT?

Since an appraisal develops market value ( as an opinion), then theoretically, yes, one would compare each and every AVM to an appraisal done at the same time on the same property. And see what comps were used and what adjustments were made ( or algorithms relied on in AVM )
An AVM has a confidence score around its value estimate, with 95% considered a high confidence score. Meaning even the best of them can be " not accurate, or less accurate" within a 5% tolerance. Add a much wider tolerance for a lower confidence score.

Look up the definition of accurate. It mentions other qualities beyond the numerical.

An appraisal is an opinion. A price is a statement of fact. I'll take the merits of a price over the merits of an opinion every single time. Although I'm not surprised you think an appraisal is a more accurate rendering of a property's value than an actual price.

 

[alebrewer]

So ?
Buyers can make wrong decisions ( esp with overpayment/emotionally driven ) RE agents are idiots wrt pricing and the comps they use in a CMA. They are salespeople, out to make a deal and protect the deal once the contract is signed.

Your implied assumption is that appraisers can't (be wrong that is). That is one of the silliest propositions I've heard.

 

[J Grant]

Again, my statement said that, 'from a risk perspective' there is no reason for an appraisal if the loan is paid off according to the terms. Of course there are other reasons to procure an appraisal, and your example is a stellar one. The prudent buyer won't want to pay more for a home than it's worth - and an appraisal is still the gold standard for assessing said value. How much longer, though? Look at how quickly even appraisers have adopted AI into their everyday bickering. If someone naively assumes buyers, sellers, and even Realtors aren't doing the same things WRT estimating value, they're seriously misguided. The only reasons (I can think of) for why appraisals have been the gold standard for so long are: (1) other stakeholders didn't have access to the data we had - now they do, and (2) because they BELIEVED appraisals were 'right' - and many no longer do. Whether its because of false narratives about bias, or folks standing appraisers up against (what is becoming) really solid valuation data, perceptions about the quality of appraisals have changed...

THAT is the spin which Fannie and Freddie sold .

The Enterprises were pedaling the idea that appraisals are used as a "risk tool " - maybe they are, but an appraisal is not designed to be a risk tool!! The purpose of an appraisal is a front-end lending decision - on their own form, it states the purpose of an appraisal is to provide a market value opinion - it does not say the purpose of an appraisal is to analyze risk.

Since risk is about borrower performance, it is not possible for an appraisal to be better at borrower behaviour prediction than any other alternative value method. Thus, they could then sell the idea of who needs an appraisal since it is no better at doing something (risk analysis ) than other products.