Computer-Aided Appraising. The phrase sounds like another description for an appraiser assisted AVM, but it's not. "Computer-aided" is a common phrase that is found in other industries and professions, but it's not something you hear in the appraisal industry.
In the early 70's, as software was developed to take advantage of the new computers and their speed, many manual based processes were replaced by "computer-aided" processes. And the phrase entered the lexicon to describe any process that was performed by a computer. It was initially used to describe analytical processes, but as software applications proliferated into all industries the term was even applied to "computer-aided writing" or word processing that we take for granted today.
The transformation from manual processing to computer-aided processing happened across all industries. In the 70's, engineers were using slide rulers and HP hand-held calculators to solve problems. All problems were literally solved by hand. If the problem was too complex, it simply wasn't solved because it would take too long. Engineers would just add a huge safety factor to compensate for not solving the problem accurately. But by the 80's, engineers were applying "computer-aided engineering" technology to solve problems that were previously unsolvable. Today, the technology is so sophisticated that engineers can tackle the most complex problems and not only find a solution, but determine the most optimal solution.
The architecture and product design industries got Computer-Aided Design. Manufacturing got Computer-Aided Manufacturing. Today, you can even find Computer-Aided Golf Course Design technology. All these industries and professions have made tremendous advances in productivity and capability.
What happened to appraisers? All they got was form-filling software. After all these years, the appraisal process is still a tedious, manual based process. Why?
If the comments from the different appraiser message boards are to be believed, a typical appraiser spends four to five hours just on the research and analysis of an appraisal. This does not include the additional time it takes to drive to the location, perform the inspection and then produce the report.
Why has the appraisal process been so resistant to being "computer-aided"?
The simple answer, as we all know, is that appraising is considered an "art". We would not expect a computer to value the Mona Lisa accurately. Similarly, we would not expect a computer to value our home accurately either. Only a person with experience in the "art of appraising" can value a property accurately.
The truth is that there have been tremendous advances in valuation technology over the years and appraisers have not been able to take advantage of it. There are probably many reasons for this; chief among them was that appraisers were always asked to assist the technology instead of drive the valuation technology.
However, the "Computer-Aided Appraising" that I am talking about is not about replacing the "art of appraising" with black-box valuation analytics such as in an AAVM. It's about replacing the tedious manual processes that adds so much time to completing an appraisal. For instance, instead of spending precious time searching for those three or four comps that will be used in the report, why not utilize search technology to find hundreds of possible sales and listings. Let the computer take the first stab at ranking, slicing and dicing and trending the market. It'll take only seconds. Let it produce some initial charts on the predominant features of the market. Why not take advantage of all this pre-analysis information before starting the appraisal?
In fact, if we take computer-aided technology a step further. Why not have it fill out the appraisal form for you? Once you have trained the software to fill out the form the way you need it filled (think UAD here) it will do it accurately every time, in mere seconds and it won't forget. If you want to change something, click the rebuild button and a new report is created in seconds.
The appraisal industry has lagged behind for too long in terms of applying technology to reduce or eliminate the manual processes within the appraisal workflow.
A computer will never replace the "art of appraising", but surely we can eliminate manual form filling. Surely market data can be gathered quicker, flood maps, aerial imagery, location maps and even permit history can be pulled automatically so that it's available before you start the analysis.
Moreover, when the analysis starts to be performed, and a value determined, why not employ a "helping hand" in determining the value? The subject is described by many factual characteristics (think numbers here) GLA, site area, basement area, bathroom count, etc. Computers are great at dealing with numbers. Why not apply some preliminary analyses based on the factual information about the subject to get a preliminary sense of its value.
The appraisal process as it is performed today can be dramatically more efficient and the valuation itself can carry more weight in the financial industry than it currently does with the application of computer-aided technology.
There are lots of opportunities to make the appraisal process more efficient and regain precious time.
As many of you know, at Bradford Technologies we have been working on the concept of "computer-aided appraising" for some time. We started by adding regression to the appraisal. We created a new reporting format called the Collateral Valuation Report (CVR). This effort proved to be very useful in demonstrating the potential of computer-aided appraising. Over the past year, we have made considerable advances and are now very close to producing a fully compliant UAD 1004 in less than 30 seconds.
I envision a future where the appraiser blends the "art of appraising" with the "science of appraising" and competes more on their ability to analyze data than on their ability to clone or fill out forms faster. The art of form filling is dead.
Jeff Bradford is the CEO of Bradford Technologies, Inc. Located in Silicon Valley his company has been the leader in innovated solutions for appraisers for over 26 years. You can find more information on ClickFORMS, CompCruncher and "computer-aided appraising" at www.appraisalworld.com or www.bradfordsoftware.com.
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