NAR’s Move To Replace Real Estate Appraisers With RVM’s

[panappr]

If NAR wants to cross pollinate professions, fine. Just let us open up real estate brokerages so we have a slice of that pie.

I say if you are a certified real estate appraiser, you already have a better grip on the market and market dynamics than most realtors out there and are most likely more professional and articulate.

I like that answer, lets all start selling Real Estate.

 

[mike32716]

Heard it all before.

I don't get it? That Inman article is OLD. The date says today, but I remember seeing it last summer, or before.

The only reason appraisers exist is that there are no other better alternatives. The financial markets (investors) make that decision, and not some marketeer from NAR claiming a new gold standard. The property and neighborhood will still need to be inspected. And as long as the GSEs are losing billions, there will be boots on the ground doing appraisals.

Now that said, there is a need for additional underwriter analytics for use in reviewing an appraisal. We have all seen CoreLogic reports kicked back at us with the question, "why didn't you use these sales?" Those sales were distressed you say, but they don't know that becuase CL only spits out (up) public record data. A good MLS report that competes with CoreLogic would be beneficial to the underwiter AND to our sanity.

As I've stated before on other threads CoreLogic (and several other players) are the newest hurdle for appraisers as end investors are demanding a reconciliation between these reports and our appraisals.

 

[moh malekpour]

Moh - but then wouldn't it be upon the shoulders of the industry to adequately price the cost of having the AVM type analysis? In theory, the appraisal fee should reflect the cost involved with producing the appraisal report, including the liability. We don't compromise with the fee because another AMC will do it for $25 less. We say you want quality, you pay for it.

You're saying that because someone is willing to do it for $25 less and may get the same quality. But isn't that the huge slippery slope that has put the industry into the $170 appraisals? At what point do you move from competition to downright ruin of an industry?

I agree with you firstchoice. I am not happy with it and I don't welcome it at all but it looks like it is coming. What I am saying is only theoretical. In practice, it may not work. They are talking about untested products. They keep talking about analytic product. I don't know how analytic it is but it needs to be tested. AVM and other products were tested and failed because they were using inaccurate and unverified data but this is different. It has MLS in there. That is a lot of good data .
It can do three tasks. Data collection, Data analysis and conclusion
According to them, it has access to all data that are available to appraisers and is able to analyze them much better than appraisers and its results could be more accurate (in theory).
Liability usually goes with the risk and susceptibility to error and omission. functions that are done manually are more susceptible to errors and omissions than those that are done by computer but it doesn't mean that there is no error at all.

 

[Cicada]

If underwriters get real MLS data they will be responsible for having access to all this information and in a general/practical sense become review appraisers. Maybe they will be required to be regulated in a similar manner that we are. Might be good for the whole system. Who knows? It might even help to weed out poor appraisers that cannot justify the thinking, comparable selection, etc. in their reports and create more demand (and higher pay) for those of us that do a better job. But then again, the robots will probably just take over anyway.

 

[ghrousseau]

How many agents are now going to lose their BPO biz.

Now what are they going to do when their on AVM comes in under value?

Yes, the knife cuts both ways.

 

[ghrousseau]

If underwriters get real MLS data they will be responsible for having access to all this information and in a general/practical sense become review appraisers. Maybe they will be required to be regulated in a similar manner that we are. Might be good for the whole system. Who knows? It might even help to weed out poor appraisers that cannot justify the thinking, comparable selection, etc. in their reports and create more demand (and higher pay) for those of us that do a better job. But then again, the robots will probably just take over anyway.

Mark, underwriters don't have time in this day and age to get that involved in the process. Underwriting turn times have gotten exceedingly long. If you think secondary market investor requirements on appraisal reports are bad, then you should see the bs loan underwriters have to deal with regarding the constantly changing multitude of guidelines, verifications, and duplications. Underwriters want a solid appraisal they can look at briefly to determine if the collateral is sufficient to make the loan.

 

[Cicada]

Mark, underwriters don't have time in this day and age to get that involved in the process. Underwriting turn times have gotten exceedingly long. If you think secondary market investor requirements on appraisal reports are bad, then you should see the bs loan underwriters have to deal with regarding the constantly changing multitude of guidelines, verifications, and duplications. Underwriters want a solid appraisal they can look at briefly to determine if the collateral is sufficient to make the loan.

Of course. I guess I'm not talking about giving the current u/w another thing to do, but that this might change the underwriter's entire role in a large-scale systematic way. Since the lender/underwriter may have more interpretive powers, new ideas and processes may be formed and the new way may not resemble how things are currently done.

 

[Highlander416]

It would be ironic if this new Realtor AVM didn't work quite well enough to become the "Gold Standard" but did work well enough to shut down BPO's and competing AVM providers. That is one possible outcome.

 

[USPAP101]

Today, appraisers pay MLS for the data they need. Some appraisers pay in addition to MLS, local fees for public data, like areas that have Redlink.

Could this not be advantageous to the appraiser? They can buy and use a better data source to perform the appraisal analysis and pay less money for it?

I've often read and/or heard, that if all the appraisers used similar data sources that the process of performing an appraisal could become more uniform. Why would that be a bad thing?

Something else to think about, do you think the giant AMCs, if appraisal is such a cash cow for them, why would they sell a database away that would virtually eliminate that income stream? Big companies do not typically get big because they are run by idiots.

Looking at the big picture, I don't buy into the doom and gloom.

 

[Mr Rex]

Today, appraisers pay MLS for the data they need. Some appraisers pay in addition to MLS, local fees for public data, like areas that have Redlink.

Could this not be advantageous to the appraiser? They can buy and use a better data source to perform the appraisal analysis and pay less money for it?

I've often read and/or heard, that if all the appraisers used similar data sources that the process of performing an appraisal could become more uniform. Why would that be a bad thing?

Something else to think about, do you think the giant AMCs, if appraisal is such a cash cow for them, why would they sell a database away that would virtually eliminate that income stream? Big companies do not typically get big because they are run by idiots.

Looking at the big picture, I don't buy into the doom and gloom.

Yeah the MLS and AMC/AVM futures looks bright. If you hadn't noticed, First American is a very large player on the AMC and MLS scene. Almost too big to fail and/or maybe considered an oligopoly, like the lenders and insurers that recently received tarp funding to continue their oli's...