At Bradford Technologies, we are always looking for new trends to see what the future might have in store. As many of you know, we’re located in Silicon Valley, so we usually get a preview of new ideas and technology well before the rest of the country does. So straight from the capital of technology innovation, here are the Top 10 appraisal related predictions for 2016.
Prediction #10: Lenders will start to adopt a new valuation product that allows the borrower to submit their own property inspection photos. Appraisers will be able to authenticate these photos and produce a HELOC collateral valuation with a turn time of less than 4 hours.
Prediction #9: Large appraisal firms will start to realize that having a steady inflow of appraiser trainees is critical to their future and will start investing heavily in building their own proprietary training programs. These firms will start to compete on the quality of their training programs to attract new, as well as, experienced appraisers to join their firm.
Prediction #8: Aerial imagery technology will take a leap forward with companies developing the ability to analyze aerial imagery and produce a quantifiable condition score. This could become another headache for appraisers, as reviewers are willing to pay for this technology and start to second-guess appraisers condition assessment. Conversely, it could become an opportunity for appraisers to further support their assessments and value conclusions.
Prediction #7: Big Data will continue to be a buzzword in 2016, but the value of having the appraiser interpret and filter the results into actionable information will become more and more evident as the limitations of Big Data become understood. This will make the appraiser or valuation analyst far more valuable in the collateral valuation process.
Prediction #6: Traditional appraisal methodologies will start to come under fire as Big Data Valuation Analytics start to identify and incorporate influences that can quantify the appeal of a property. These additional influences will not be able to be handled in the traditional grid, causing a conflict between the “art of appraising” and the new “science of valuation.”
Prediction #5: Appraisers will start to see lenders contract with home inspection companies to perform interior inspections with the appraiser incorporating the inspection results in their analysis to produce a faster, less expensive appraisal report.
Prediction #4: Appraisers discovered the power of coalitions in the past years and will start to band together in similar fashion to create common resources, such as shared regional databases, that allow them to compete with the Big Data valuation systems.
Prediction #3: There will be an increase in the number of Web-based products for appraisers. The traditional form filling-software vendors will introduce Web-based versions of their applications. “There’s an app for that” will be a common phrase in the industry as app development becomes easier, quicker and, cheaper allowing many new vendors to offer unique solutions to appraisers.
Prediction #2: Workshops, seminars and, webinars on valuation analytics will proliferate as many appraisers start to seek out education and solutions to meet their desire to analytically support their appraisals.
Prediction #1: 2016 will be a turning point for appraisers, as the majority starts to add analytical support to their reports for their comp selections, adjustments and, value conclusions. This will raise the bar for reliable, trusted appraisals and will once again be recognized by the financial community as the “gold standard” in valuation.
In summary, 2016 should be a very good year for the appraisal industry and for all appraisers who take advantage of the opportunities that open up in the coming year.
Best Wishes for a Prosperous and Happy New Year.
Jeff Bradford
P.S. One last prediction for 2016. This one comes from, Fortune.
This month, Ford announced it has partnered with Google to develop a self-driving vehicle. In 2016, Apple will buy Tesla and announce plans to deliver an electronic car by 2019. With over $200 billion cash on hand, the iPhone-maker has more-than ample resources to absorb the purchase, especially now that some of the bloom has come off Tesla’s once-rosy stock. In addition to its automobile know-how, Apple gets access to Tesla’s battery technology, which CEO Elon Musk claims can help change “the entire energy infrastructure of the world.” Of course, Apple would also get Musk—a worthy heir to Steve Jobs’ “think different” legacy and ideally suited to be Apple’s futurist, chief technologist and CEO-in-waiting.
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Written by : Jeff Bradford
Jeff Bradford is the founder and CEO of Bradford Technologies, the leader in the new field of computer-aided appraising technology. He has over 35 years of experience creating innovative solutions for appraisers and is a nationally recognized expert in computer technology and analytics. Jeff Bradford was awarded the prestigious Valuation Visionary of 2014 award by the Collateral Risk Network and was recognized as Tech All-Star by Mortgage Banking magazine in 2015. He holds three masters degrees: one in Engineering Mechanics, Computer Science and an MBA.
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Prediction 11: 10,000 more appraisers will flee this “profession” as interest rates rise; not because of planned retirement but rather to avoid taking bankruptcy.
Prediction 12: Five more college grads (independently wealthy) will enter the “profession” as trainees because they need a hobby and some type of title to get their parents off of their back.
Prediction 13: Ford’s new self driving vehicle will come with remote photography capability so banks can eliminate the need to hire appraisers for drive-by appraisals and verification photos.
Prediction 14: Five more appraisers will ban together to boycott AMCs before abandoning the idea and the “profession” six months later.
Prediction 15: AMCs will begin to orders their long anticipated 12 hour turn time appraisals.
Prediction 16: McDonald’s Corp. will employ more ex appraisers than are currently licensed in the state of Oklahoma with their new appraiser/cooks making twice as much as they made as appraisers.
Prediction 17: AMCs will require their appraisers to use a new smart phone app which will allow them to follow the appraiser throughout the day (thus proving that they saw the subject and all of the comparable sales).
Prediction 18: Banks will have reaped 400% more than they lost during the banking crisis via their AMC subsidiaries.
Prediction 19: Congress will agree to examine the appraisal fee transparency issue on the HUD 1 once a female president of Korean descent is elected during a leap year.
Prediction 20: Next January 1st someone will post a new article on this site boasting about all of the wonderful things coming down the line for appraisers.
#13 was thinking same thing as I was reading this. OR Drones will be employed to shoot aerials all around the home with no need for the Appraiser to take photos. Crazy!
Check your ego at the door please.
Well I won’t be switching to Mr Bradfords software anytime soon.
The biggest problem I see in the Appraisal industry is Software companies trying to drive change in the industry, to their advantage.
Appraisers will continue to be flung back and forth under busses until they CONTROL THEIR FORMS. Realtors learnt this 65 years ago. As long as we have triple Masters degree silicon valley morons trying to dictate the direction of our business, we are indeed doomed.
2 years ago this moron claimed we were going to need his special software to make Market based adjustments. What happened to that prediction?
My prediction is that at least one Appraiser will not be switching to Bradford Software this year or ever.
*Bradford’s
*appraisal
*software
*learned
*appraiser
Triple Masters degree silicon valley people mostly likely are not morons.
I predict with all the measures taking place to get cheaper and quicker appraisals, The quality of and the number of appraisers will diminish to the point we will be facing another 2009 in a few years. The requirements and cost of being an appraiser keep going up and the income of appraisers keep going down until there will be no really qualified appraisers left in the business. The idea that an appraiser can produce a creditable report looking at photos someone else took is not in the best interest of the lender since photos sometime can be very deceiving. The appraiser must view the entire property personally and take the photos personally to be able to get a true feel of the property’s condition and value. The appraiser must take all elements into consideration and through preponderance of the evidence, produce a creditable accurate report. Only an experienced appraiser with knowledge of other areas of the business such as Real Estate Sales, Home Builders, Home Inspectors and Structural Engineering are able to do the kind of job expected of them. There’s far more to appraising than crunching numbers from someone else. This kind of knowledge can’t be learned in an appraisal class since those classes only teach what’s necessary to pass the state exam. It can only be learned through years of experience.
Jerry Morgan
Certified Residential Appraiser
Morgan Appraisal Service (owner since 1983)
Totally agree This Software Company predicting for their own agenda.
#10 Gimme a Break. Borrowers taking photos and Appraiser authenticating them and produce report in 4 hours! Just say NO to this unrealistic prediction.
#5. NO Way hiring both an inspector and an Appraiser will mean less costly overall product. Appraisers still have to go out there, take exterior photos, measure the home and do everything else they do. Trust me inspectors are going to charge a few hundred for their work and Appraisers are NOT going to do what they do minus interior inspection with photos for $200.00 less than they already have to take with all the work they do!
Self Driving Car: I love what Retired Appraiser below said and thought the same about the self driving vehicle, they will start to supply cameras so it can take photos and then the Appraiser will not have to be present. OR Drones can do the same thing! Crazy once again!
#8 No way aerial imagery will provide better Condition ratings. Hello…Did we forget INTERIOR inspections. Both exterior and interior are combined to provide a Total Condition Rating.
Also as noted below, all the lenders want to do is further alienate Appraisers and Cut their throat every step of the way….Just try doing all of these things and watch another market crisis come to pass. For the lousy $400.00 on average Appraisal fee, well less in some other areas or for some AMC’s, Lenders and others just Do NOT get the VALUE that is provided by the Appraiser and the report we provide. They pay closing Attorneys high dollars, Realtors and Banks make good money at closing but they want FAST & CHEAP from the one person who can PREVENT another Crisis in the financial world. It just slays me!
My prediction for 2016: More and more GOOD, Experienced Appraisers will expand their non lender business as we have done for the past few years and they will say goodbye to this nonsense for good. Then see what you have left to deal with!
I don’t beleive in the crystal ball theory and think there is going to be a shortage of appraisers on the way….that is no prediction….it’s a fact whereas the licensing states can show how many appraisers actually applied for licensure in a particular state, along with rising interest rates……and please stop calling them “appraisal firms”……THEY ARE SWEATSHOPS ! Just like most AMC’s are scumbags…..they are all it to make lots of money….charge the consumer $500 +/- for the appraisal, pay the noob $10/hr, or at a rate that will be performance point based that will equate to roughly a 1/3 of the fee(taxed) as a staffer and it gives this sweatshops more swing for write-offs vs the independent or mom and pop shop plan……..i do agree as a full time appraiser in the trenches near everyday and as a reviewer that many of the reports i see are really bad…..and i mean BAD….could use some training in tracking and understanding market trends while using solid databases and analytical training to assist them better……..but having a homeowner take his/her own photos and have us approve is biased and should never be accepted by any measure….there would be so many ways to cheat that idea…..why don’t i just send the borrower an empty form and they can fill it in and send it back for me to sign……are you mad ?! DON’T BUY INTO THIS CRAP…
Don’t discount what Jeff has said here. Yeah, this article is a thinly veiled promotion for Redstone but lenders would love to get rid of appraisers and $400 to $600 appraisal fees if the could. The reason that they can’t is because Fannie, Freddie, and FHA still require full appraisals in a loan file. But there has been plenty said about dissolving Fannie and Freddie recently with private and institutional investors stepping in to take their place. When that happens look out. Big data is much cheaper and faster than traditional appraisals. If, through the testing process, alternative valuation methods can be proven to be as effective or more effective than traditional appraisals, then residential appraisers will go the way of telephone operators, travel agents, and elevator operators.
People have have been talking about the elimination of appraisers from the mortgage process for at least 20 years now but it still has not happened. But data collection and technology has advanced rapidly and appraisers are still filling out forms that were designed by quasi-government agencies in the 1980s. This article should be viewed as a wake up call.
Oh, and not only will appraisers be impacted by big data in he future, so will the appraisal software companies such as Alamode, ACI, and Bradford who continue to live in the formfilling appraisal universe. But Bradford (which I do not use) at least has a grasp on what is likely to be coming down the Pike in the not too distant future.
I do understand your points and yes they have been talking about eliminating Appraisers from the equation for 20+ years as long as I have been Appraising and I agree that IF they find that the Big Data valuation will provide lenders with the same or LESS risk on lending. If Foreclosures are the same or less only using Big Data, then yes we may be going away for good. What will likely happen then is they will still need us for at least a decent drive by type of review, with basic information on the property stats, prior sales, market factors, etc. that no self driving car or aerial imagery can provide.
I would love to do 5 exterior “drive by’s” a day with NO Value, just provide physical data, take photos and provide any neighborhood data that may be important and be done with it. $100.00 to $150.00 a pop and I am good to go! :) Bring it on!
I love the 5 exteriors with no value concept Mary. My fear is that they’d only be willing to pay $25 a pop for a product like that. But you are right. Appraisers will be pushed out of valuation and into field verifiers. I don’t think that a certified residential appraiser will be needed for that level of work.
Yes, I did think about that and fear you are right! However for Investor or Financial reporting requirements, PERHAPS they may need a Certified Appraiser to sign on that dotted line if nothing but for appearances. Certified Appraiser rather than an “errand boy” who has actually looked at that home and provided general data on neighborhood influence, condition of property, etc. I know it may be wishful thinking. Any Appraiser worth their Salt would not even think about doing this type of service for $25.00. Just me feelings anyway! But of course there will be those that will do it.
There is a difference between pushing the industry in a direction to fit ones software products (like any one person could do that) and creating a software product to fit the needs of a changing industry. I predict that in 2016, the appraisers who thrive will be the ones who can see the changing landscape and get ahead of the curve.
#11 – More states will start to enforce customary and reasonable pay by way of the already passed law (Dodd Frank). These fees will be established by way of surveys where appraisers start quoting a standard (USPAP compliant) fee of $600, and a $1,000 fee for what lenders are getting now (Scope creep / 15 page engagement letters). #12 – ZERO appraisers will buy or renew their software with your company as your comments will go viral within the appraisal community and we will know you are NO friend of ours.
Yes Bradfords predictions are quite visionary. Not. I think the biggest joke is the Redstone software depicting & analyzing support for market adjustments. This is complete over kill. It should be INCLUDED in the B&R software for the appraisers who already pay through the nose for annual renewals in the 1st place.
….and the funny thing is that these Big Data sources are in direct contrast and conflict to the Actual Appraisal process, which is to work from a large group of comps and narrow it down a much smaller number of the best possible comps to compare against the Subject. In order for the Big data to work as it should, you need LARGE numbers. As someone here already stated, only years of experience and interaction with the local buyers, sellers and Realtors will produce the most accurate data upon which our adjustments should be based.
Oh Jeff left out one prediction: Appraiser’s will now be required to knock on the door of the comparable, sit down and have lunch with them, that the appraiser must pay for, water his garden, paint his bathroom because it is peeling, get a signed affidavit from the owner stating how much time the appraiser spent at the comparable and agree to pay the AMC a $100 fee for doing the appraisal that now pays on $100.
Laughing Hard as I read this! Would not surprise me as crazy as this is getting!
Can somebody please quantify the level of pain we will collectively receive from the extra heavy boot of progress worn by the establishment rule stampers as 2016 creeps up and lowers our compensation while raising our analysis+software fees?
I enjoyed reading all your comments. Thanks for taking the time to post. I appreciate it.
#17 has already happened. Only one AMC as far as I know, and the app is mandatory for employees, though it soon will be available to everyone.