Prediction: Residential Appraiser Survives As A Contest Judge (of Sorts)

[RCA]

Revamped software can give residential appraisers the ability to more quickly provide far more accurate appraisals, with less risk.

But then the question: Will the software replace the appraiser?

Answer: No. The appraiser however becomes something more of a judge for a ranking contest, - like a beauty pageant, a 4H Fair, a car show or cooking contest.

The appraiser will have to know the market areas very well and be able to rank the subject against the sales comparables, in terms of overall quality. But also, they will need to do the best possible job, with admittedly limited information, giving relative scores to the various intangible features of the comparables - which will be used to split up the residual scores based on MLS features and sales prices.

However, their rankings will be relative - and the values will be filled in by the computer. But relative rankings of things like houses -- people are so much better at this than computers EVER will be.

To do the job well, they will need to understand the mechanics of everything else, they will have to know what to base their judgement on and what not to base it on. They must also, be able to explain what is going on with the statistics, algorithms and otherwise complex systems in use.

But, this is all a ways off.

 

[Meandering]

And so long as there is no consideration for anything external,
that might be real.

But the unique thing about real estate sales, is real estate doesn't physically move easily.

So while those databases might sound fun,

where is the consideration for the possible zoning changes, the comp next door to the sewage treatment plant, the comp where the kids walk to school as opposed to the one half a mile away, where the kids take the bus, or the difference between the school bus stopping in front of the house, or the kids walking several blocks to wait outside in the weather for the bus? Maybe you don't have weather in California, but most of the rest of the country does.

And when considering homes that are "family" orientated, where is the consideration for those closest to the neighborhood bar, so the youngin's can walk home after a good sit down, instead of drive home? And please don't tell me it's not a consideration of some buyers, or that people don't "do that" anymore.

How about the homes that have animal farms as neighbors, but are most of the year, downwind, as opposed to those that are mostly upwind of the manure pile, manure spreading, blah, blah, tractor noise at 5 am? Sure you could program that into your database, but what about those lake front properties that are lakefront as the result of dead mining pits filling with water, and swimming isn't safe? program that in to your lake classifications also? Most places north of alligator country enjoy a swim in their lakes, and get fairly annoyed when the lake is dangerous for some reason, and that also goes for the larger ones that are owned by the state, yet, are closed to swimming after a rain, because they fill up with fecal coliform and e-coli. Will you program in those nuances to sort out what truly is a 'comp" in a specific market? Or are all lakes only graded on motor boat usage or not? How about the lake where several bodies where pulled out recently? Think that lake has the same "appeal" to a new buyer in the neighborhood as it did a month earlier? How does "the database" adjust for new sink holes opening up? Follow that in the news and adjust the database to reflect the "newer" consideration in the market? How about when the local mall goes vacant, the underground tanks at the gas station are found to be leaking, or there is a shooting in the school. Is the database adjusted for the recency of changes that impact buyer preferences, or sellers remorse?

Yeah, don't worry about it, just confirm if the counters are granite or processed quartz and if those are real wood floors or laminated plastic ones.


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[glenn walker]

Fannie & Freddie already have that program it's called CU Collateral Underwriter and it gives a score based on it's data base and comparables

 

[Terrel L. Shields]

something more of a judge for a ranking contest, - like a beauty pageant...

now there is something that sounds fun...T'heck with houses.

How about the homes that have animal farms as neighbors...

no problem. Carry a small cloth bag of chicken manure in your pocket and you get used to it after a while. Of course, don't wear it while shopping

 

[Terrel L. Shields]

mostly upwind of the manure pile,

We call them "stacking sheds"

Top is classic shed, the large composter is a commercial behemoth that takes tons of chicken pooh and turns into compost. And the bottom one is a new stacking shed and the long tube along the side is a farm sized composter. Stick the dead birds and some chicken poop in one end and compost comes out the other end in a few weeks. Turns very slowly. Bag it all up and sell to the city slickers for $5 for 50#

 

[Meandering]

We have a new commercial from a politician-farmer running for office, that actually tries to make the point he is a farmer and the commercial shows him driving a manure spreader, spitting ***t on a field, while he calls his opponent a manure spreader. It is the most dyslexic commercial I have ever seen, and sadly it is not yet on youtube, or I would have linked it here. from that commercial, doesn't look like they composted anything, just collected up what the septic sucker had in it's trucks.

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[RCA]

And so long as there is no consideration for anything external,
that might be real.

But the unique thing about real estate sales, is real estate doesn't physically move easily.

So while those databases might sound fun,

where is the consideration for the possible zoning changes, the comp next door to the sewage treatment plant, the comp where the kids walk to school as opposed to the one half a mile away, where the kids take the bus, or the difference between the school bus stopping in front of the house, or the kids walking several blocks to wait outside in the weather for the bus? Maybe you don't have weather in California, but most of the rest of the country does.

And when considering homes that are "family" orientated, where is the consideration for those closest to the neighborhood bar, so the youngin's can walk home after a good sit down, instead of drive home? And please don't tell me it's not a consideration of some buyers, or that people don't "do that" anymore.

How about the homes that have animal farms as neighbors, but are most of the year, downwind, as opposed to those that are mostly upwind of the manure pile, manure spreading, blah, blah, tractor noise at 5 am? Sure you could program that into your database, but what about those lake front properties that are lakefront as the result of dead mining pits filling with water, and swimming isn't safe? program that in to your lake classifications also? Most places north of alligator country enjoy a swim in their lakes, and get fairly annoyed when the lake is dangerous for some reason, and that also goes for the larger ones that are owned by the state, yet, are closed to swimming after a rain, because they fill up with fecal coliform and e-coli. Will you program in those nuances to sort out what truly is a 'comp" in a specific market? Or are all lakes only graded on motor boat usage or not? How about the lake where several bodies where pulled out recently? Think that lake has the same "appeal" to a new buyer in the neighborhood as it did a month earlier? How does "the database" adjust for new sink holes opening up? Follow that in the news and adjust the database to reflect the "newer" consideration in the market? How about when the local mall goes vacant, the underground tanks at the gas station are found to be leaking, or there is a shooting in the school. Is the database adjusted for the recency of changes that impact buyer preferences, or sellers remorse?

Yeah, don't worry about it, just confirm if the counters are granite or processed quartz and if those are real wood floors or laminated plastic ones.


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Definitely.

I have had reviewers that work in this area tell me some pretty amazing things. I like the stories about these appraisers that do 10 URARs/day. They can't figure it out and can only assume they must have a lot of help from family members. But, of course, these guys have developed conduits to clients that filter out all the difficult oddball appraisals. They don't make money on these. They send them to "you guys". - Or at one time appraisers like me. Only now I have a sign on my door that has a min fee. ....

I kid you not.

The vast majority of appraisals in the California are URARs, SFRs. You've got 80-90%+ of residential work with these. That is what I am referring too.

(Scientists say smoking pot every day over many years reduces the size of the brain, yet makes it far more efficient at doing the same tasks. I have a theory this applies to many of the "high speed" / "high throughput" appraisers in California, both residential and commercial. But I imagine they have, as a result, a difficulty learning new methods and thus resist change at all costs. They would tell you they do it all with complex systems in place that would be difficult to change. No doubt true. Yet you pick up that smell when you are around them. ... Well, maybe because they are rich. That too. ....)

If you are off in farmland, that's different. And I am certainly not talking commercial.

Even in the SF Bay Area, I always seemed to be given the difficult appraisals, once I got past my first year working with a high-volume residential appraiser. I'm well aware of the sorts of things that cannot be easily automated. So, yes there are these odd ball issues that have to be taken care of and they will always be part of the job.

But my point is, that even with automation, there is a big role for humans to play - even with run of the mill SFR homes. (Well not completely run of the mill - newer trac homes are often extremely easy to appraise - Redfin can be fairly accurate with them.)

So, what I am talking about, really, is the bulk of current SFR residential appraisal in urban and suburban areas. The work can be streamlined, appraisals made more accurate [in the sense of tighter adjustments on comps, values that come closer to subsequent sales prices, higher agreement among market participants].

Not only that, the technology evolves to be able to provide probability functions as to where the value can trend in the future .... complex scenarios like hurricane or weather forecasting, that a single appraiser cannot possibly deal with -- but something an investor or home owner would like to have access to.

 

[RCA]

Fannie & Freddie already have that program it's called CU Collateral Underwriter and it gives a score based on it's data base and comparables

It's Model T Ford stuff. Ancient history. They are scoring YOU, YOUR APPRAISAL, not the property.

 

[RCA]

We have a new commercial from a politician-farmer running for office, that actually tries to make the point he is a farmer and the commercial shows him driving a manure spreader, spitting ***t on a field, while he calls his opponent a manure spreader. It is the most dyslexic commercial I have ever seen, and sadly it is not yet on youtube, or I would have linked it here. from that commercial, doesn't look like they composted anything, just collected up what the septic sucker had in it's trucks.
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Yea, I used to have to do that when I was a kid. Hard work. The straw gets mixed in with the cow dung and everything sticks together. Imagine a 9 year old with a pitchfork trying to tear that that stuff up, about 5 inches thick and put it in the spreader. ... Then out to the fields. But it is damn good fertilizer.

The smell. Strange you get used to it and it doesn't smell any more. Like some posts.

 

[Meandering]

Definitely.

I have had reviewers that work in this area tell me some pretty amazing things. I like the stories about these appraisers that do 10 URARs/day. They can't figure it out and can only assume they must have a lot of help from family members. But, of course, these guys have developed conduits to clients that filter out all the difficult oddball appraisals. They don't make money on these. They send them to "you guys". - Or at one time appraisers like me. Only now I have a sign on my door that has a min fee. ....

I kid you not.

The vast majority of appraisals in the California are URARs, SFRs. You've got 80-90%+ of residential work with these. That is what I am referring too.

(Scientists say smoking pot every day over many years reduces the size of the brain, yet makes it far more efficient at doing the same tasks. I have a theory this applies to many of the "high speed" / "high throughput" appraisers in California, both residential and commercial. But I imagine they have, as a result, a difficulty learning new methods and thus resist change at all costs. They would tell you they do it all with complex systems in place that would be difficult to change. No doubt true. Yet you pick up that smell when you are around them. ... Well, maybe because they are rich. That too. ....)

If you are off in farmland, that's different. And I am certainly not talking commercial.

Even in the SF Bay Area, I always seemed to be given the difficult appraisals, once I got past my first year working with a high-volume residential appraiser. I'm well aware of the sorts of things that cannot be easily automated. So, yes there are these odd ball issues that have to be taken care of and they will always be part of the job.

But my point is, that even with automation, there is a big role for humans to play - even with run of the mill SFR homes. (Well not completely run of the mill - newer trac homes are often extremely easy to appraise - Redfin can be fairly accurate with them.)

So, what I am talking about, really, is the bulk of current SFR residential appraisal in urban and suburban areas. The work can be streamlined, appraisals made more accurate [in the sense of tighter adjustments on comps, values that come closer to subsequent sales prices, higher agreement among market participants].

Not only that, the technology evolves to be able to provide probability functions as to where the value can trend in the future .... complex scenarios like hurricane or weather forecasting, that a single appraiser cannot possibly deal with -- but something an investor or home owner would like to have access to.

And yet they can't predict the lottery number with any accuracy and that's only 376 data points that are uniform across every draw, without anything changing, other than the date of the draw.

Predictive statistics has so far not proven to be accurate in anything.

Close sometimes, but so are appraisals.

And I don't find any assignment to be difficult. Some take more time. Some require more phone calls and some require greater research from academic papers, but not difficult, just more work.

What is difficult is dealing with idiot clients.

2 feet of snow on the ground and the stip comes back if there are income producing crops on a two acre residential property.
Sorry, we don't grow income producing crops under 2 feet of snow.

Another 2 feet of snow on the ground, and the stip comes back for the lake front home,
Appraiser to include a photo of the lake.
Uhm, that flat white thing without trees on the other side of the deck railing is the lake, that's how we store them for winter in NE PA.

And my favorite,
Were there income producing activities in the subject property.
Well, they had several beds and at least one computer, I don't know if they are using them to produce income.

That's the only "difficultly" to assignments, trying to answer stips with a straight face.


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