Lenders are convinced that a statistically supported appraisal is a more reliable valuation. Wow! Does anyone that understands the home valuation process really think a “statically supported” appraisal makes for a better quality report? This is not that hard to understand. What does “statically supported” really mean? It means you get a computerized report, similar to what Zillow or Trulia provides, based on the information in public records. Statistically speaking, the margins of error are frightening!!! Great products for entertainment, NOT for determining the value of your home.
This all comes down to the Golden Rule. Lenders are looking for new ways to make a profit and they have discovered the appraisal process makes the easiest target. At the end of the day, appraisal reform is all about the money. Appraising real estate is an art. No computer will ever replace the skill of a living, breathing, licensed appraiser. The “one new law” theory still applies. If we could create one new law to keep anyone without an appraisal license from profiting from the appraisal portion of a mortgage transaction, all this talk of appraisal reform and statistically supported appraisals would disappear overnight. Don’t fall for the hype…
Remember
… all the data in the world is nothing more than dots, dashes, and meaningless numbers, without having someone with the skill to interpret and analyze the correct information and make it all make sense. “Quantity” of data will never be a reflection of “quality” of the product. When it comes to pricing real estate, there will never, ever, ever be a replacement for a licensed, experienced, local professional.