Some appraisers fear the growing sophistication of appraisal-related technology. They worry that as the business becomes more and more automated, human appraisers will become less relevant. The appraising community is shrinking already, due to several factors, and it’s aging. The doomsday scenario is one where virtually all appraisal work is automated, requiring only a few human beings to push the buttons—practically eliminating the need for skilled appraisers.
Many say technology is good for appraisers
Many observers argue that while the appraiser population is inexorably dwindling, due to an aging population and the difficulty of getting fully licensed, improved technology is likely to grow the appraiser’s capabilities so that those who remain in the business will be able to do more appraisals, more accurately and efficiently. We might see fewer people doing more work—but they’ll do it faster, and presumably make more money.
Automated reporting improves efficiency and accuracy
“Technology is not running appraisers out of business,” insists Douglas Weisbart, director of operations and development for ReportBuilder PRO, a Denver-based company that offers automated reporting technology. “If we increase efficiencies, we improve the appraiser’s level of deliverables. Our technology is designed and streamlined so customers of all size can manage and monitor the metrics. With our services, you can realize a 25 to 30 percent increase in activity, which devolves to the bottom line. We believe technology will only enhance the shrinking number of MAIs in the industry as they age and drop out, because institutions want reports sooner, at a lower price. We eliminate much of the post-production review.
“We also eliminate ‘data creep,’ in which inaccurate data from old reports sneaks into new reports through the copy/cut/replace process. That can’t happen with our technology. Our newest version takes the comps database and the whole narrative solution to a new level, where you can see the comps from within one mile, or 200 miles, of the subject property, and see whether it’s a land comp, a sales comp, or a cost comp. You can add that information to the report with a click, drastically reducing the time it takes to select the appropriate comps.”
ReportBuilder PRO does not force the user into a specific, immutable type of report, Weisbart says. It’s completely customizable to the individual appraiser’s master templates.
“It’s easy to add information on the fly,” he says. “If you find a mistake in a review, and find you entered, say, the wrong ZIP code, you just click on it and change it, and the program reviews the entire report to see if you made that same mistake elsewhere. Our new version is as fresh off the shelf, with the most advanced technology in the industry.”
High-tech products can be easy and intuitive
At Kansas City, Mo.-based realquantum, chief marketing officer Jeff Weiner says the main selling point of his company’s product—which is geared strictly to commercial properties—is that it contains no Microsoft Office products whatever. All the work is done in the Web browser, minimizing the possibility of numerical errors.
“Many appraisers work with Word or Excel, with some sort of plug-in to a database, all of which creates a cumbersome heartburn. We’ve eliminated all that. At a recent appraisal conference, we had a conversation with an appraiser from a large company, and some savvy technology experts, who were looking at our product; the techie turned to the appraiser and said, ‘I told you this was possible.’”
With realquantum, Weiner explains, all information is stored in the appraiser’s comps database. realquantum started the development of its product by hiring a “human factors” expert: someone who knew how to make the user experience easy and intuitive.
“This has paid off, because new customers are telling us how easy it is to learn, then use,” he says. “It’s no secret that the average appraiser is on the older side; it’s often a family business, with the son or daughter getting ready to take over, and one of reasons they chose us is ‘I could never get Dad to learn the other tools.’ We often hear, ‘I had Product A and Product B already, but I’m using yours.’”
Weiner says the flow of information on the screen is designed to be as intuitive as possible, analogous to a set of construction drawings. He emphasizes that this is specifically a commercial property appraisal tool, that also supports agricultural properties, but not single-family residential.
Software takes the busy-work out of appraising
Another company that focuses on technology for commercial appraisals is New York City-based Bowery Valuation, where founders Noah Isaacs and John Meadows say they have automated and upgraded the appraisal process to allow their largest sponsor and client, Cushman & Wakefield, to diversify its appraisal business. Whereas C&W used to appraise only large office buildings, it has now expanded into multifamily assets, which form the bulk of commercial real estate in New York City.
“Commercial appraisal is a niche that’s not well known,” says Meadows. “Noah and I grew up in Berkeley, Calif., surrounded by technology, but as appraisers, we were doing long tedious work every day, searching through report after report after report. We started talking with banks, who told us that appraisal was always the biggest headache in commercial real estate lending.
“It’s a huge annoyance, coming at the end of the lending process, taking two to four weeks to deliver. If you’re on a fee, you want to get it done as fast as you can, but you’re working with a convoluted sell sheet of 150 pages or so, hoping you’ve hit all the points. When you’re manually typing in all the tax information, etc., if you get one figure wrong or leave it out, the appraisal could be off by millions.”
Meadows says his software is all-internal, and not currently available on the market. Bowery is in an exclusive partnership with C&W. He explains that this cloud-based software does not automate the evaluation, but does make data entry more efficient.
“It takes the busy-work out of appraising,” he concludes.
Appraisal technology companies
What companies are providing this technology? This list includes the three businesses discussed above, plus a few others that offer high-tech products for appraisers:
- ReportBuilder PRO – automated reporting technology
- realquantum – commercial property appraisal tool
- Bowery Valuation – internal tool for appraisal process automation
- Datappraise – cloud-based Web software, proprietary comps
- Commerical Complete – customizable appraisals, mortgage equity analysis, comparison grids, cost analysis
- ExactBid Narrative 1 – cloud-based Web software, with drop-down menu data entry and custom branding
Article written by Joseph Dobrian. Joseph Dobrian has been writing about commercial and residential real estate, and real estate-related finance, for more than 30 years. His by-line has appeared in The Wall Street Journal, The New York Times, The New Yorker, Real Estate Forum, Journal of Property Management, and many other publications. He is also a noted novelist, essayist, and translator. His website is www.josephdobrian.com, and he can be contacted at [email protected].