This is a pretty niffty detailed chart for finding time adjustments, we are done.

[Zoe]

It is still important to consider the fact that change in values is not linear. There are fundamental reasons why it moves that way if you pay attention to the actual market conditions (Sales, pendings, new listings, active listings).

It is not universal though. I live in one of the most heterogeneous markets alive in real property.

You can't apply linear the County I live in. Too heterogeneous. That is just one county.

It is also largest County geographically in Tennessee. Linear won't work.

Too many moving parts. There are like 8 different jurisdictions in the County I live in.

Within each jurisdiction there are too many moving parts. It won't work linear.

 

[Mike Ault]

I don't think that appraisals are necessary most of the time. There are better and more efficient ways to manage collateral risk if regulations allowed. But I don't think that the decision to use an appraisal or not should be automated. It should be a manual decision made by an appraiser at the bank.

I think the decision to "waive an appraisal" should be made by the people whose retirement plans are secured by that collateral. Right now they are relying on "ratings agencies", and ratings agencies have proven themselves susceptible to "profit motive" manipulation from their clients. This "automated collateral risk system" they are setting up has too few people in charge of too much, which invariably leads to bad things.

 

[Surf Cat]

I don't think that appraisals are necessary most of the time. There are better and more efficient ways to manage collateral risk if regulations allowed.

I believe appraisals should be mandatory most of the time. Due to people doing what they do to their homes. There's some serious Butchery going on out there labeling it as remodeling. You can't turn over the camera and reporting to the homeowner as they'll hide the defects and won't be truthful.

To make the process more efficient, the appraisal report should be streamlined and trimmed of all the fat. You don't need a 27 page report most of the time. But the property should be inspected. And not by an Uber driver.

 

[Zoe]

No two snowflakes are the same.

 

[TerryRohrer]

No two snowflakes are the same.

But sometimes two dingbats are a lot alike!

 

[Joe Flacco]

I believe appraisals should be mandatory most of the time. Due to people doing what they do to their homes. There's some serious Butchery going on out there labeling it as remodeling. You can't turn over the camera and reporting to the homeowner as they'll hide the defects and won't be truthful.

To make the process more efficient, the appraisal report should be streamlined and trimmed of all the fat. You don't need a 27 page report most of the time. But the property should be inspected. And not by an Uber driver.

My perspective is limited to my area, but I don't think it is crazy for an appraiser at a bank to decide if they need an appraisal or not. Automating the decision to use or not use an appraisal is kind of crazy.

 

[alebrewer]

But the property should be inspected. And not by an Uber driver.

So I guess the question is: what about a property's condition is such that: (1) it has a quantifiable effect on value, and (2) it would not be recognizable by an 'uber driver'? They've solved for the GLA issue by using Lidar technology. They've solved for upgrades recognition with AI image recognition software. I'm guessing functional obsolescence is something an uber driver may not pick up on, but honestly - how many homes today are going to have functional issues? Or maybe a better question is: what percentage of appraisal assignments do you address functional issues on?

 

[Joe Flacco]

The median purchase mortgage is around $325,000. Property as collateral and 50% dti. On a different floor at the bank, they give out $100k unsecured personal loans with no collateraland don't even consider dti.

 

[Mike Ault]

My perspective is limited to my area, but I don't think it is crazy for an appraiser at a bank to decide if they need an appraisal or not. Automating the decision to use or not use an appraisal is kind of crazy.

Appraisers should be disinterested third parties, not employees of people with a vested interest in selling their collateral risk onto the secondary market.

 

[J Grant]

They are not the same thing, but they are VERY strongly correlated. If prices are going up, values should be going up as well.

They are not always related and are not related the same for every property - in a rising market, sometimes people overpay; in a declining market, people get bargains.

In any event, it is confusing or misleading when appraisers substitute the word value for a price. - (even if everybody else does it ) -

Prices are numerical facts - the prices are what gets entered as the data.