Technological developments have the power to change long standing business processes and significantly impact business outcomes. Practically no industry is exempt from this truth. Here is a look at technological advancements in the real estate appraisal process.
Real Estate Appraisal and Valuation Technology
There are two main types of tech advancements used to determine property values.
Cloud based appraisal software products are primarily used by professional appraisers and their staff to complete traditional appraisal reports. These programs allow appraisers to access information from numerous sources.
Automated Valuation Models, or AVMs, are used by many stakeholders in the real estate transaction including listing agents, buyers, sellers, investors and lenders as well as professional appraisers. AVM software helps sellers and real estate agents determine a selling or listing price. Investors and lenders use AVMs as an alternative to traditional appraisals or to verify the appraiser’s valuation and analysis.
Features and Benefits of AVM and Appraisal Technology
County real estate data is readily available online i.e., public records, tax, ownership and transfers, sales prices, and real estate listings. Additionally, users can access, integrate, and share data across multiple devices using mobile and web applications. This offers benefits including:
- Reduced turnaround time – faster completion and delivery of high-quality real estate appraisals
- Improved quality assurance – easier data cross checking
- Better team workflow – field inspection, data integration, analysis and valuation tasks can be performed by dedicated personnel
Impact of Real Estate Valuation Technology
Closing timeline. Purchase and refinance loans have different timelines. In refinance transactions, the borrower may not have a strict closing timeline if they have control over how and when the loan proceeds are distributed. A purchase transaction has hard timelines including a closing date for the sale and a rate lock expiration for the loan. Exceeding these timeframes can be costly all parties in a real estate deal.
Transaction costs. Delivering a late or inaccurate appraisal can mean failure to close within the contracted time period or lead to a loan denial or change of loan terms. This can cause a loss of earnest deposit, wasted appraisal fees, or and expired rate lock resulting in higher loan costs.
Transparency. Increased access to online data sources, coupled with the ease and speed of verifying facts and figures, leads to greater transparency in property valuation for sellers, lenders, and buyers.
All stakeholders in a real estate transaction including buyers, sellers, agents, investors, appraisers and lenders can benefit from technological advances in real estate valuation. Expect to see more appraisal professionals get involved in developing valuation platforms and apps.