Computer-Aided Appraising

Report
Computer-Aided Appraising
How New Technology Will Spur
Growth in the Appraisal Industry
Jeff Bradford, CEO
Bradford technologies, Inc.
Computer–Aided Appraising
What is it?
And why do we need it?
Computer-Aided Engineering
Helped engineers solve problems that
were previously unsolvable
Bradford Technologies, Inc.
- The Leader in ComputerAided Appraising Software
Computer-Aided Design
Helped architects design structures that
were previously not buildable
Bradford Technologies, Inc.
- The Leader in ComputerAided Appraising Software
Computer-Aided Manufacturing
Helped manufacturers produce products that
were previously not possible
Computer-Aided Golf Course Design
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Computer-Aided Appraising
What is it?
It is the concept of harnessing the power of
computers and technology to assist and
empower the appraiser with capabilities that
allow them to produce highly credible valuations
Today…
Appraisers have Powerful Form Fillers
And a lot of manual work!
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Time to Complete an Appraisal
• I typically spend 4 to 5 hours on a report not
including field work with research and analysis
taking up most of the time
• 4-6 hours once I get started
• The clerical, research and analysis phases,
plus the actual time spent writing the report
usually totals up to about 4 hours
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Typical Appraisal Process
Beginning
Data Gathering
Manual Process
Middle
End
Inspection & Analysis
Report
Manual Process
Manual Process
Manual Process
4- 6 Hours + Inspection = 1 Day
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Appraisal Quality Suffers
Office of the Comptroller of the Currency
• 17.6 % of appraisals contained
contradictory information
• 35% of repurchased loans are due to
faulty appraisals
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Appraisal Compliance Issues
•
•
•
•
•
•
USPAP
UCDP, UAD
CFPB
Dodd Frank
Interagency Guidelines
Federal & State Independence Laws
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Result: Credibility Suffers
Why are Appraisers in this Position?
Why don’t appraisers already have
computer-aided appraising technology?
Appraising is considered an “Art”
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Appraising is considered an “Art”
You would never
expect a computer
to value the Mona
Lisa
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Appraising is considered an “Art”
We also don’t
expect computers
to accurately value
our home
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
But Ever Since 1981…
These Black Box property valuation systems
have been getting better and better every year.
But Ever Since 1981…
Their usage continues to grow
But Ever Since 1981…
“Each month, we provide more than one billion
AVM values to lenders, brokers, government
agencies, marketing firms, consumers and
insurance companies”.
Today Valuation is BIG Business
Property Valuation has become a Science
• Team of more than 50 PhDs, economists, and
modelers
• Combined with nation’s largest property and
ownership database covering 98 percent of
the U.S. population
• Equals “Good Enough” property valuations
Appraising has to be more than “art”
The “art of
appraising”
has to be
augmented by
the “science
of appraising”
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Big Data-AVM Review Systems
Appraisers are being reviewed & scored by
systems that utilize massive amounts of data
• Data from AVM indicates the appraised value
may be in excess of the neighborhood
• Requests to reconsider comp selection
• Requests for additional influence explanation
• Requests for comp adjustment support
• etc.
Big Data-AVM Review Systems
These review systems have access to
more property data and can process it
much, much faster than the appraiser.
Appraiser is at unfair disadvantage
Appraising is a “science”
Appraising is an “art”
How can we compete ?
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Is Mobile Computing the Answer?
More Efficient Inspections
Automatically loads
into the forms
Fill Out the URAR on a Tablet
See More, Do More - Quicker
We Can Make Process More Efficient
But the Appraiser Cannot Compete
Appraising is a “science”
Appraising is an “art”
Partner with an AVM?
AVMs: Hop on board the train or get left behind?
A
V M
Artificial Intelligence
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Technology
Artificial Intelligence
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Technology
Artificial vs Augmented Intelligence
Computer
+
VS
Computer directed
Computer
+
Human directed
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Technology
Artificial vs Augmented Intelligence
The Winner
VS
Computer
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Technology
+
Human directed Strategy
Computer-Aided Appraising
The Winner
VS
Computer
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Technology
+
Appraiser directed Analysis
Computer-Aided Appraising
Shortens the Entire Process
Data Gathering
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Inspection & Analysis
Report
Get Rid of This
Bradford Technologies, Inc.
- The Leader in ComputerAided Appraising Software
Reduces This
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Computer-Aided Appraising
Adds “Science” to the “Art”
+
Bradford Technologies, Inc.
- The Leader in Innovative
Valuation Solutions
Closed Black Box AVMs
AVM
Bradford Technologies, Inc.
- The Leader in Innovative
Valuation Solutions
Valuations Providers
 Zillow
 Veros
 Collateral Analytics
 Corelogic
 LPS
Many more
Analytics are open to Appraiser
Computer-Aided
Appraising opens up
the black box and let’s
the appraiser drive the
process and the
analytics
Bradford Technologies, Inc.
- The Leader in Innovative
Valuation Solutions
Computer-Aided Appraising
Like having Mr. Data help you value a property
Work with Entire Market Data
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Market Analysis
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Market Trends & Forecasting
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Analysis Dashboards
Statistically Accurate Valuations
140%
120%
100%
1004/SP
80%
Reg/SP
60%
SCA/SP
40%
20%
0%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Bradford Technologies, Inc. - The Leader in Computer-Aided Appraising Software
Computer-Aided Appraising
Why do we need it?
Computer-Aided Appraising transforms the
appraisal process by letting computers do the
tedious, manual processes and by empowering
appraisers with analysis capabilities that were
never previously available.
Appraiser are now able to provide valuation
services to the entire valuation market.
Opportunities
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Technology
Frees Appraisers from the 1004 Box
Bradford Technologies, Inc.
- The Leader in ComputerAided Appraising Software
HELOCs are Big Business
Its expected to continue
for 2, possibly 3 years
Bradford Technologies, Inc. - The Leader in Computer-Aided Appraising Software
New Evaluation Guidelines
 1. Must provide reliable estimate of market value
 2. Must address property’s actual physical condition
 3. Must address market factors that affect value
BPO’s are not sufficient because it does not provide a market
value
CMA - Competitive market analysis is not sufficient because it
does not provide a market value
AVM alone is not sufficient because it does not include an
inspection of the property
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Valuation Market Share
AVMs and BPOs
traditionally used for
HELOC collateral
valuations
AVM
25%
$2.5 Billion
BPO
20%
$2 Billion
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Technology
Appraisal
55%
$5 Billion
Take Back Some Market Share
It would be nice to put
1 billion dollars into the
pockets of appraisers
AVM
25%
2.5 Billion
BPO
20%
2 Billion
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Technology
Appraisal
55%
5 Billion
Take Back Some Market Share
50% of BPO’s is 7.5 million valuations
- these include drive-by inspections
If 62,000 appraisers divided these jobs evenly,
each must do 120 more valuations/year
These jobs pay $125 - $150; Each appraiser
could add up to $18,000 to their bottom line.
Appraiser Evaluation Process
It starts with the “brains” of the operation
The Appraiser
Appraiser with
Market Expertise
Appraiser Evaluation Process
Appraiser with
Market Expertise
Third Party
Inspection
Appraiser Evaluation Process
- MLS Sales & Listings
- Public Records
- Aerial Imagery
Appraiser with
Market Expertise
Third Party
Inspection
Appraiser Evaluation Process
- MLS Sales & Listings
- Public Records
- Aerial Imagery
Appraiser with
Market Expertise
Third Party
Inspection
Computer-Aided
Appraising Technology
Appraiser Evaluation Process
- MLS Sales & Listings
- Public Records
- Aerial Imagery
Appraiser with
Market Expertise
Third Party
Inspection
Evaluation
Its really an appraisal !
Industry Needs New Appraisers
From Appraisal Institute – Age of Appraisers:
MAI
SRA
Mean
Median
Mode
62
63
60
61
64
64
Appraiser Trainee Opportunity
Performed by a machine
Performed by an agent
Appraiser Trainee can do
these Evaluation-Appraisals
with Supervisor guidance
Additional Income to firm
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Software
Appraiser Trainee Opportunity
BPO
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Technology
vs
Appraiser Trainee
 Supervisor signature
 Full Market Analysis
 Property Inspection
Are Appraisers Ready for the Future?
What One Appraiser Thinks
“Once you learn regression (really learn it) it
makes your life as an appraiser so much easier.
So much so that you really don’t need that silly
manual grid to come up with a credible value
opinion.”
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Technology
What Many Appraisers Think
Its nice, but
its not for me
Its the beginning
of the end for appraisers
Bradford Technologies, Inc. The Leader in Computer-Aided
Appraising Technology
It’s the future
and I can't wait
2500 appraisers surveyed
after “Building Stronger
Appraisals Faster “ webinar
Thank You
AppraisalWorld.com
800-622-8727

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