AUTHOR: Patrick Egger is a Certified General Appraiser located in Las Vegas, NV. He teaches continuing education classes on the housing market, appraisal issues for real estate agents and appraisers. Click on Outside The Boxes for a collection of Patrick's articles on Appraisal Scoop!
In the The Right Start I talked about a few "what ifs" and my grand scheme to change things. The real questions for many appraisers was "is this doable" and if so "why should I as an individual get involved"? Essentially, what’s in it for me since it will take a lot of "collective effort" to get it going along with perseverance and patience.
It doesn’t take much of an imagination to conjure up a "few perks" that "the association" may yield but to satisfy idle curiosities, here are a few things to think about.
While we have public non-disclosure rules, what are the rules for a shared database via a professional association?
- Could key data from appraisals be shared among members of the association?
- Would verified data in non-disclosure and disclosure states make a difference in your everyday work?
- What other information could be shared such as market graphs, map mash-ups (see Windows Live Maps) with data overlays for neighborhoods where members could link and share map data, builder brochures, hazard locations, etc.?
Does a national level database make sense?
If say, 25,000 appraisers join "the association" and contribute data, maps, etc., are there users outside of the association for parts of these products?
- Verified sales data base.
- Shared graphs on neighborhoods trends, etc.
- Market reports sold to real estate agents.
- Real estate maps with hazard layers, neighborhood information, graphed trends, etc.
There are many websites providing market data that is misleading. Does a "realty reality" based website make more sense to those looking to finance purchase or sell a home?
Making your points
Supposing each appraiser earns points for their contributions and pays points for data they use. Every verified sale earns a point and each verified sale costs a point to another user. If you permit "the association" to use the subject and 3 sales, you get 4 points. You could upload additional verified sales and earn more. If you upload a builder brochure for a new or existing tract, a "mash up map" or a market graph, you earn points.
The key here is to collect as much real estate related data as possible and to link it to maps, searchable databases, etc. The more data we add, the better it gets and the more commercially viable product we have to sell to other real estate related professions, "if we choose to".
Prohibiting the use of data
The membership would vote on it and the use of the data would be limited or controlled by the group. In that way the AMC couldn’t create or sell "AVM products" if we didn’t want them to. At the same time "lenders and clients" (those providing assignments via the AMC) might have "free access to market reports" if they are using the AMC’s appraisers exclusively. Does that give lenders a reason to join the AMC?
"The association" could develop reporting standards (the De Facto ones mentioned in the Right Start) and formats for the membership to use. Everything would have "data standards", that is graphs maps data etc., would be uploaded in a standard format and a code would classify the information to the person that uploaded it.
Why re-create the wheel. With 25,000 appraiser members contributing data, maps, graphs, etc., how long would it take for "the association" to have a very viable data resource and possibly a series of marketable products? Would the sale of "association reports" provide a revenue source to the association and perhaps provide members with reduced membership fees, benefit packages, etc.?
Competitively getting it together
Each of us knows many of the appraisers in our areas and from that view the competition would have access to some of your assets (so to speak). However, this is a "big picture project". Let's say we have 100,000 residential appraisers nationally licensed or certified and 25,000 of them join "a la modes AMC" and "the association". Would 25,000 appraisers sharing data have an advantage over the other 75,000?
Your ability to access data and develop a better report in a shorter time-period makes sense, even if your contributions benefit "the competition", at the same time better data and better reports, raise the bar and therefore, the others will have to compete with you. To do so, they will have to do the research you are doing.
"Build it and they will come"
Through association, shared data and uniform standards, we could create a more comprehensive "standard report" and do it in a reasonable time period. The key in this type of market environment (where uncertainty looms) is not to find ways to cut cost, but rather ways to "improve the product" and "increase the market’s confidence in it".
Lenders investors and the secondary market are looking for "reliability". Association, standards and data sharing is one way to give it to them without substantially increasing your time and costs. Would it take some up-front work, absolutely it would, but it would be worth it in the long run.
Throughout the series I mentioned "a la mode" as a partner to help us create an association. Their AMC, technology, communication platforms and leadership, positions them to be a key player. They have a dog in this fight. In the meantime get those cards and letters flowing to a la mode. For those going to the conventions, take time to talk to a la mode and let them know we appreciate their involvement and will support their efforts on our behalf.
What other ideas do you have? "What if"?
AUTHOR: Patrick Egger is a Certified General Appraiser located in Las Vegas, NV. He teaches continuing education classes on the housing market, appraisal issues for real estate agents and appraisers. He can be reached at firstname.lastname@example.org Look for the new Outside The Boxes category for a collection of Patrick's articles on Appraisal Scoop!