Though we live in a world where information moves quickly, processes and institutions do not. In some ways, the cautious and careful approach may be the smart one. In other ways, we are behind the times. Interestingly, when asked why we still do things the old way (despite new and helpful inventions), our answer is a lame, “because that is the way we have always done it.”
For as many years as I can remember, most full appraisals have always been done the same way. The appraiser physically inspects the home and then heads back to the office for the analysis and write-up. Though this process may work, is it the most efficient way? In an area like mine (Eastern Idaho and Western Wyoming), there is a lot of time spent in a vehicle staring at the old, white line. Though this is necessary in order to travel to and from my appraisal inspection appointments, is there a better way where I could be spending more time using my knowledge and expertise doing what I was trained to do… appraise?
Just yesterday, I took my 13 year-old son with me to the furthest area that I cover. It is a little, isolated town in Wyoming that has no local appraisers. About once or twice a month, I get paid handsomely to jump in the car
and spend several hours behind the wheel to get to and from this area. As we were traveling, my son and I talked about technology (a subject he is extremely interested in). The subject of Google Glass came up. For those of you who do not know, Google Glass is simply a computer in the shape of eye-glasses. You wear it like you would a pair of sunglasses, but it allows you to search the Internet, navigate with GPS, take photos, and even video everything you are seeing. My thoughts then turned to appraising (a subject I am extremely interested in). Could this invention (or something similar) assist appraisers to be better at what they do?
Though the inspection is certainly an important part of the appraisal process, it certainly is not the most important part. At least, it is not the part that requires the highest level of expertise. Back when the lenders allowed such things, many appraisers hired and trained other skilled people to do the inspections so they could concentrate on the more analytical sections such as choosing comps, market trends, making accurate adjustments, and the reconciliation. Though there is something to be said about physically being in the property, is it an absolute necessity in order to get a good idea of the quality and condition? Furthermore, what about using the technology that is currently available (not to mention what is still to come) to assist us in focusing our attention where it is needed most—on the write up?
Picture this: an appraisal business owner hires and trains a qualified employee or trainee. That person is individually and intensely trained by the appraiser to inspect homes. He or she is taught how to measure, sketch, take photos, take scrupulous notes, and pay close attention to detail. Once that individual is trained and trustworthy, he or she is given a Google Glass device and sent out on inspections as well as driving the comps and neighborhood. Not only does the appraiser back at the office get the sketch, photos, and notes that the inspector took, but can also watch the entire video of the inspection. It is as if they were there… almost, and without the arduous drive time.
What implications can this have for appraisers with disabilities? My father retired from appraising a few years ago because he could not physically do the inspections anymore. Since most lenders and clients require the appraiser to physically inspect the property, he could no longer continue working in the industry he gained an expertise in over 40 years. I wonder if he (and others like him) could claim privilege under the Americans with Disabilities Act (ADA) to have someone else do the inspections with a video camera.
Regardless of whether we choose to trust another with our inspections (I respect that some do not), are we considering everything that is available to us? If nothing else, should we consider recording our personal inspections and making it a part of our workfile? It might just save our backsides in a court or before the state board one day.
Now, go create some value!
Dustin Harris is a super-successful, self-employed, residential real estate appraiser. He has been appraising for nearly two decades. He is the owner and President of Appraisal Precision and Consulting Group, Inc., and is a popular author, speaker and consultant. He also owns and operates The Appraiser Coach where he personally advises and mentors other appraisers helping them to also run successful appraisal companies and increase their net worth. He and his wife reside in Idaho with their four children.
22 thoughts on “Virtual Appraisal Inspections?”
The idea is intriguing. I would think that it might take a whole lot of time for lenders (E&O companies) to accept it. Or better yet, how long would it take lenders or AMCs to train a bunch of inspectors how to complete inspections for a small handful of inhouse appraisers who ship their reports off to India to be typed, eventually eliminating the need for independent fee appraisers at all.
I still think the idea has merit. Thanks.
I could not agree more. The time of the most knowledgeable and experienced appraisers is usually best spent on doing the analytic parts of the appraisal. The fact is, not all appraisers have the same level of skills and experience. As with many professions, including law and accounting, the time of the most knowledgeable and experienced personnel is leveraged, with paralegals, junior accountants and bookkeepers, for the benefit of everyone. It allows these companies to serve the greatest number of clients without a material decline in the quality of the service and expertise provided. For the appraisal industry to essentially discard the most knowledgeable and experienced, as a result of injuries, physical abilities or aging is a true waste. Great subject.
Several years ago here in Oregon there was an appraiser who became wheel chair bound and did just that, she had an assistant video tape the house and each of the rooms. This was approved by the state based on the ADA. She continued this practice for many years before passing away.
My son got Google Glass last year. It is in it’s infancy insofar as programs go, but Google is encouraging the general public techies to create programs for the device, along with their employees. I believe it would be a great tool for appraisers!
It sounds excellent hope to try it soon.
I like the Idea!! Many professions have accredited assistants, Physician’s assistant, Physical and Occupational Therapy assistants, paralegals etc. Why not an appraiser assistant??
I often get requests from cash buyers who are looking for an appraisal for their upcoming purchase. This would be a private party (non lending) appraisal – and would fit this model well. Someone without disabilities would likely NOT get approval to do this type of inspection for lending work. But there is plenty of private work out there for this. As long as the “client” is advised of the scope of work and disclosure, I don’t see why this would not work for that type of work. When I get a call from a private party, I discuss the various levels of appraisals : full inspection, limited exterior inspection, and no inspection – and the relating cost savings for them as well as the limitations of each for the appraisal. We discuss their needs, the purpose of the appraisal, etc – and decide on an agreed scope from there. This could certainly be one more factor in the mix.
Be careful what you wish for, you may get it. A similar idea was proposed by the Builder’s Association about a year ago. A clear part of the concept was the establishment of a few centralized hubs of “appraiser specialists” (somehere in a Fannie Mae or major lender offices) where all the video feeds would be sent live. The specialists would then complete the appraisal having acces to all the search and analytical data. This concept is already in the works, and it is coming. It will not make your life as a certified appraser better. When implimented, it will put you out of business.
Thank you Dustin! You always seem to be on the cutting edge of technology. I’ve gone to the Google Glass website and it is definitely interesting, no doubt. I am somewhat concerned about “Google Creep” however. It seems that Google is really successful at weaving themselves into many things we do on the internet….that could be good or……maybe not so much. I would be more ready to give you two thumbs up as a dad for taking your son along with you for such a long drive allowing your son to see you doing your job. As far as I’m concerned, the high point of your article is you being a good dad – which is far more important than appraising could ever hope to be.
Definitely intriguing Dustin. I would just hope there is a viable way to offset or absorb the EMF’s that are produced; particularly since the device is worn on the head.
A true appraiser would never be comfortable allowing others to perform their site inspections. The author wants to downplay the importance of this function. My clients deserve better than sending someone with camera glasses because of the work and travel involved to properly inspect a home and taking responsibility for it. I feel the same way about others taking comp photos. I’ll bet the author bangs out four or five reports a day by circumventing the process this way. Just go into the CMA business and let real appraisers do their jobs.
Hmmmmm….if that were to become the “standard” practice among appraisers, what’s to keep the lenders from hiring their own “property inspectors” and then using their AVM’s (using data WE have provided via the UAD forms) in order to perform their own appraisals?? Appraisal Property Inspection would become it’s own “profession”. And they would have 1 more excuse to NOT use a full, professional appraisal.
I like the idea. And it appears that Divedude and some other commenters have never had a trainee or done a review appraisal.
As a supervisory appraiser, I am fully responsible for everything in the report when I sign. I accompany a trainee on 5-10 inspections until I am confident that the trainee knows what to do at the property. Washington requires that the trainee be accompanied on a minimum of 25 inspections during the training period, but not necessarily the first 25. If the trainee cannot adequately perform a basic inspection after 10, they need to reconsider their career choice. And as the trainee gets involved with more complicated assignments and more complicated properties, I co-inspect at least 15 more properties.
Most of the AMC’s (and some states) require that the supervisory appraiser inspect every property with the trainee, but that is not cost effective, so we do very little work for AMS’s. Our clients pay reasonable fees and allow reasonable turn-times.
WOW.
I guess all you folks that think the idea of “video recording” the interior of someone’s HOME are all on board with the NSA spying on YOU? And don’t even try to sell the idea by saying ” Well, we are already looking at all their stuff and taking interior photos” either. If you don’t understand the PERCEPTION of the homeowner on the differences you simply have no common sense and are therefore probably a weak appraiser.
Most homeowners are already a little uncomfortable with some guy they don’t know taking a few photos of their living room, room, kitchen and baths, so how do you think they would like the idea of knowing EVERYTHING the inspector/appraiser saw while wnadering through the house was on a vidoe that could end up who knows where?
Congrats Dustin, this is your worst new “idea” to date.
Not mentioned: Site inspection; adjacent properties, the school half block down the street or the high tension power lines that run across the rear of the site (but not on it), the aircraft noise, freeway noise intrusion or the smell from the nearby municipal sanitation sewage treatment facility, the refineries located a 1/4 mile away, railway line two blocks away, noisy dogs next door, crowded parking on Sundays due to church overflow, etc.
There is a lot more to “an inspection” than just looking at the subject and comparable properties. Most of us make mental notes of ALL the conditions I pointed out on our way to and from the subject property. Most trainees do not. BTW-if you think my examples are far fetched look into West Long Beach, or East Wilmington CA sometime. Virtually ALL the conditions I mentioned can be found.
I think you’ve got a good point Divedude. The lender might be best served by having the appraiser’s hands-on experience with the property that has the potential of being fully owned by the lender if the borrower defaults.
Jim,
You’ve made a point I hadn’t thought about. I’m wondering if this Google Glass thing would be a simple recording device that is contained within the glasses that are worn……or it may be a video that is uploaded to the net. After reading about Google Glass at “http://www.google.com/glass/start/what-it-does/” I suspect the latter. As a former law enforcement officer I can foresee hackers stealing the videos and selling the info to other bad guys who could target the residence for theft…..or worse.
It occurs to me that the author, home builder associations and other self proclaimed valuation experts are all out the change the appraisal process. Is it a coincidence that this is happening when appraiser independence is being taken more seriously and these parties has less control over the valuation process? I don’t think so. The consumer needs a disinterested party performing the valuation. Not the guys building the homes or writing the loans. Real appraisers should be cautious of an individual that appears to be an advocate for the AMCs’ and in the same breath calls himself Appraiser Coach.
Right on. Divedude. Last time I checked, Google glasses didn’t smell or hear. What about that urine or nicotine odor? What about traffic noise? Pictures don’t tell the real story of functional deficiencies such as too many stairs, too narrow halls, odd shaped rooms, etc., etc. Can they pick up the general feel of a dirty room? Can they tell whether the paint is a sloppy once over or professionally done? Are they so good they can pick up the feel of the neighborhood? And what about comp pictures? Or maybe the Appraiser Coach doesn’t see those as important either. Maybe the homeowner should take the pictures and skip any professional onsight inspection.
The reason lenders stopped the practice of letting appraisers send out trained (?????) people to inspect properties was because it didn’t work well. What has the responsibility and the liability? Since the appraiser’s job is to put on the hat of the typical buyer, my question is, how many TYPICAL buyers buy from pictures without ever stepping foot into a house. Not many, and for good reason. Houses have an aura, a feel, a presence that make a typical buyer say, “I could live here” or “Not a chance”. Google glass may be good for some things, but they can’t replace actual site visits by appraisers. As for this part of the job being less important than form filling or “writing up the report”, please. An appraiser cannot make accurate adjustments unless he understands the pros and cons of a property and that is best done by an actual inspection of the property by a competent appraiser.
Cheap and easy, cheap and easy. We have been down this road before. It precedes a market crash. And yes, I have done reviews and I have been appraising for 25 years. I am tech savvy, I teach appraisers (including USPAP), and I have personal contact with hundreds of appraisers each year. Quality appraisers would never go for this and for good reason. The $200 appraiser with little training or experience would probably think its great until they get complaints for incompetence.
Are you kidding me. First of all, before you can even dream of this scenario you have to completely rewrite the basics of USPAP. We are required to perform the actual interior/exterior inspection and data gathering of the subject property ourselves; as well as, the exterior inspection of the comparable sales, pending sales, active listings and the neighborhoods of both the subject and the comps. You can take assistants with you, but you have to be there to observe it yourself, using your observational skills. As for Google Glass or any other recording device being taken through a borrower’s home and recording everything we encounter and observe including things that have zero relevance to the act of appraising, you’re in American Civil Liberties Union lawsuit land. And what do we do during those awkward moments when we encounter and interact with the homeowner, the children or the pets? Now we’re entering “Reality Appraising” land. Many homeowners, especially those who care about how they themselves and their homes look, are pretty much at the limit of their privacy evasion tolerance by our taking individual interior photos as we go. Let’s take a deep breath. Every aspect of what we do as appraisers contributes to the quality of the work we deliver in the form of an appraisal report. How many times have we taken photos of a house in fair to average condition and found that our photos make the interior or exterior of the house literally look “good” on the PC screen or the printed page. How many times have we inspected and photo’d a comp from the street that was clearly in far worse exterior condition than the MLS photo showed, or our photo showed, except for that close-up second photo we took to document the truth about the overall condition of the comp. How many times has a comp’s neighborhood turned out to be inferior or superior to the subject’s immediate neighborhood. The idea of sending an assistant out to gather critical data, to make decisions over what is or is not relevant to the appraisal, attacks the relevance of the very act of certified appraising and the credibility of a “Full Appraisal Report”. It’s like the difference between flying an F-111 or piloting a Drone. It’s bad enough that we have to rely on tax assessment estimators and realtors for so much critical data concerning comparable properties, that to add desk-top inspections of subjects, comps and their neighborhoods to the mix would surely be the final nail in the coffin of the appraisal industry. Right now we have enough “garbage in/garbage out” coming from realtor data choices. We really don’t need to add second hand observation to the mix.
You get what you pay for — sometimes. And it depends on the person making the inspection — his/her motivation, and his/her level of dedication to the client/the quality of the work, and the quality of the work product. As a fee appraiser general certified (contractor) I worked in an appraisal practice in another large southwestern state with similar long-distance commercial property assignments. One person (general certified) appraiser in the practice could leave home at 6AM, drive 180 miles one way, perform a “detailed inspection” on a commercial property or multi-unit apartment complex,”inspect” all the comparables, get coffee, drive 180 miles returning, and be back in the office to make several phone calls before going to lunch at noon. The resulting analysis was thin, the descriptions/comparisons lacking, and the value opinion somewhat suspect. But the owner of the practice sent it out the door and collected a reasonable fee. CHURN AND BURN. I am somewhat anal in my level of detail, taking photographs of literally everything in the subject property, documenting with very detailed notes and sketches, and walking/photographing the comparables in addition to visiting with various owners/tenants/brokers/developers. Having performed other assignments in that area, I know for a fact that doing the job correctly is a very tedious and tiring day-long experience. I guess what I am trying to say here is that even some “appraisers” at the general certified level shortcut the inspection and documentation part of an appraisal assignment. While the analytics and hard data crunching are often more fun than the field work (and certainly the hours spent behind the wheel), in my opinion, there is simply no way to know what it is you are valuing if you have not seen it with your own eyes and experienced it for yourself. And if for whatever reason you are ever required to produce your workfile and testify to the soundness of your work, what do you do?? — say “I have a movie and half a page of notes taken by my associate trainee”. While technology is fun and rapidly expanding, I do not think Google-glass is the appropriate thing for an appraisal or the appraisal profession – especially if we let someone else do a vital part of our work for us.
With covid 19 and possible safety issues I feel it is time. I am trying to refi but because of covid my partner does not want anyone in our home. So I have had to put refi on hold until …..We are in a more tech savvy age so why not utilize it. Makes sense to me