I got an email recently, from a listener to The Appraiser Coach Podcast. The individual in question asked, “Is it OK to use TOTAL’s weighted average technique in the final reconciliation of the sales comparison in determining market value?” It was a great question.
Most of you in the real estate appraisal game will know all about TOTAL, but here’s a quick recap. It’s one of a number of great programs out there to help real estate appraisers do their job. In TOTAL, you can look at all of your comps at once, side by side. The program then looks at your net, your gross and your single line adjustments, and automatically weights the comps based on those factors.
Sounds pretty great, right? Well, it is! My answer to the listener’s question, however, is still “Yes, but…”
This question really appealed to me, because it spoke to something I’d been turning over in my mind for at least two years. What role should technology play in real estate appraisal? Do some real estate appraisers rely too much on computers now, and not enough on their own minds?
Don’t get me wrong, I am a huge fan of technology. In fact, I’ve been using mobile technology to do appraisals in the field for 20 years. I’ve given talks across the country where I describe a ‘three leg stool’ approach to success. The top of the stool is your appraisal business. The three legs are human resources, procedures, and – you guessed it – technology.
However (and this is where the “but…” comes in!), I want to strongly urge my fellow appraisers to be cautious. I worry that some in the industry are becoming TOO reliant on this new technology.
The best example of this I’ve heard came from an acquaintance who served on a state board. An appraiser came before the board, and they started asking him questions about his cost approach. His explanation for what he’d done? “I plugged it in, the computer kicked that out. I don’t really know how that happened, but that’s what I always do.” When professional real estate appraisers are giving this kind of answer before a state board, you can see why I’m starting to worry!
Here’s the thing. I am massively pro-technology. There are some great programs out there, which are making our job easier all the time. They’re boosting the efficiency and effectiveness of our appraisal offices, but you can’t just trust everything they say. We talk all the time about our ‘smart’ phones, and how advanced technology is, but the reality is that we’re working with dumb machines here. There’s no artificial intelligence at work, only a series of 1s and 0s. We can’t just buy them, hook them up, then trust whatever is produced simply because a computer did it.
We have to have more respect for our work than that. Yes, we should utilize the latest technology, but we have to understand the technology that we’re using, and take responsibility for its results when we choose to use them. Can we use Total’s weighted average? Sure, but just understand where the results came from and make sure you agree. You are the appraiser, and the most powerful tools we have in the real estate appraisal business are still our own minds.
For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode 172 – Computer Generated Incompetence.