From Valuation Records to Application Realm: A Real Estate Appraiser's Journey.

The real estate appraisal❓❓ sector is undergoing a radical transformation driven by technological advancements.

The Old Days:

In the early to mid-1980s, a real estate appraiser carried:

• A clipboard to hold a blank Uniform Residential Appraisal Report (URAR), notes, and graph paper for property sketches.
• Pencils for notes and measurements.
• A measuring tape.
• A Polaroid or 35mm camera.

A day in the life:

• Day 1: Field inspection to take photos of the property’s front, back, and street. Dimensions were measured, and a sketch was drawn. The interior was inspected, and notes were taken on finishes and fixtures. Information was gathered from the property owner regarding renovations. The appraiser returned to the office to search “Comp Books” for comparable properties and then photographed those properties.
• Day 2: Information was transferred to a URAR form in pencil, and adjustments were made to comparable property prices. A clean sketch was drawn in ink. Film was developed and printed. The report was typed by a secretary, reviewed for errors, assembled with photos, and delivered to the client. A copy was filed in storage.

At that time, real estate appraisal licensing wasn’t necessary. Education was limited, but included classes from appraisal organizations or community colleges. Experience was very important.

Garn/St. Germaine Law:

The Garn/St. Germaine law, passed in the 1980s, aimed to liberate the Savings and Loans sector. It allowed Savings and Loans companies to invest in junk bonds, offer unsecured personal loans, invest in commercial real estate and ventures, leading to the collapse of the Savings and Loans industry by 1986.

FIRREA:

The Savings and Loans collapse led to the issuance of the Federal Institutions Reform, Recovery, and Enforcement Act (FIRREA), which created the Appraisal Foundation to set appraisal standards known as the Uniform Standards of Appraisal Practice (USPAP).

Technology Improves Performance:

In the mid-1980s, pagers emerged. Then came portable cell phones, called “the brick.” The biggest invention was personal computers and software. The first digital cameras appeared around this time and took black and white photos.

The Savings and Loans collapse caused many appraisers❓ to lose their jobs. The computer technology led to secretaries losing jobs, as appraisers could type their own forms, receive requests via fax, and answer their own phones.

Opportunities in Appraisal:

By 2005, home appraisal fees rose to $550. The new generation of appraisers was better educated and technologically savvy.

Digital Transformation:

applications❓ and smart devices revolutionized the way real estate appraisers work:

• Measurement Apps: Allow appraisers to measure property dimensions using smartphones or tablets.
• Drawing Apps: Facilitate the creation of property sketches.
• Database Apps: Provide access to information on comparable properties and recent transactions.
• Appraisal Software: Allows appraisers to perform analyses and prepare reports.

Big data and advanced analytics enable appraisers to gain insights into the real estate market. Aerial photography and 3D scanning provide high-resolution images of properties. Artificial intelligence and machine learning automate tasks such as finding comparable properties and preparing reports.

Practical Applications:

• XYZ Smart Measurement App: Uses augmented reality to enable appraisers to measure property dimensions using smartphones.
• ABC Advanced Appraisal Program: Uses machine learning algorithms to analyze real estate data and provide insights.

Future Challenges and Opportunities:

• Challenges: The need for continuous training❓ and privacy and security issues.
• Opportunities: Increased efficiency and accuracy, new services, and improved competitiveness.

Conclusion:

Technology has changed the way appraisers work, increasing their efficiency, accuracy, and ability to provide insights.

Terms:

• URAR: Uniform Residential Appraisal Report.
• Comp Books: Comparable property books.
• FIRREA: Federal Institutions Reform, Recovery, and Enforcement Act.
• USPAP: Uniform Standards of Appraisal Practice.

Equations:

• Value of Subject Property = Value of Comparables + Adjustments
• Adjustment = (Characteristic of Subject – Characteristic of Comparable) * Market Price of Characteristic

Data Usage Example:

A 3-bedroom, 2-bath home being appraised. Recent transactions data indicates:

• Average sale price of similar homes: $350,000.
• Each additional bedroom increases value by $20,000.
• Each additional bathroom increases value by $15,000.
• A garden❓ increases value by $10,000.

If the subject property has a garden:

• Estimated property value = $350,000 (average) + $10,000 (garden) = $360,000.