The following blog consists of a brief interview with the owner of the small appraisal firm, Fast
Appraisals, my dad.
Q: So dad… how has digitization affected the real estate appraisal industry?
A: Well at the company I used to work for (Elliot Appraisals) my boss would spend over a thousand dollars a month to purchase film used to take photos of properties to be included in appraisal reports and have them developed. Now, using a digital camera, I just upload the pictures I take and insert them into my reports on the computer which are typically sent online to NAS (an appraisal management firm) who distributes them to the banks. This method is much more efficient and in place of the cost of film and photo development is a much smaller cost for ink used in printing some of the reports. Paper is also saved in submitting most of the reports online, which was not possible before widespread internet use.
Q: What about the use of mobile devices?
A: Many companies now require their employees to possess Blackberries or similar devices so that they can communicate with their office while on the road. I regularly spend a number of hours away from my office at a time while completing the field work involved in appraisal or working with an employee.
Q: But aren’t cellphones sufficient?
A: The thing is that NAS expects me to either accept or refuse work within an hour or two so that they can quickly pass it on to someone else who is available if I am not and have no one available to pass it on to. At first when I was told I had to purchase a Blackberry I was reluctant do so and worried about the complication of this new technology, but I now realize the efficiency that it provides me with and navigating the device has become second nature to me… for the most part. I no longer return to my office to find my inbox overflowing with appraisal requests, having to reject a number of them which may agitate NAS and cause them to restrict the amount of work that they send me. My Blackberry also allows me to send information and updates I receive about jobs to employees as I receive it while on the road.
Q: I remember you mentioning something about computer generated appraisal reports once…
A: Oh yeah. Computer generated appraisals are called AVM (Automated Valuation Model) reports. They provide basic reports and a number of companies use them because they are cheaper and quicker than using real estate appraisers.
Q: Well how come they aren’t exclusively used? How come your job isn’t obsolete?
A: AVMs aren’t nearly as reliable as humans and can make mistakes. They are strictly used by such companies as CMHC (Canada Mortgage and Housing Corporation) that insure high ratio mortgages where small mistakes in reports typically do not make a significant differences. Also, this is just a more convenient method for them. Because CMHC is using taxpayers’ money it does not do as thorough a job in its reports. On the other hand, banks are responsible to shareholders so they are more prudent and use appraisers. They are more concerned with falsified profits that may be reported and losses that may be incurred as a result of computing errors.
Q: K. Thanks a lot.
A: Ok go to bed now.
Q: In a minute!
Well I thought that was very interesting anyhow. Real estate is fascinating! Hope we have a COMM 486 class on it soon!
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