LiveValuation magazine March Issue

ERNIE DURBIN, p28

VOICES

in your

head

p18

&a

freddie

fannie u d p24

the tech bar has been

raised

p36

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MARCH 2011

* LIVEVALMAG.COM | 3

table of contents

&

co nten ts

| contents |

Feature

28

Breaking the Paper Chain The freedom of an electronic office.

ERN IE DURBIN , SRA, C RP

As a result of these difficult changes in my appraisal practice, I have emerged as a truly mobile paperless appraiser.

Looking back, going paperless was one of the best business decisions I ever made.

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your monthly valuation publication

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LVM03.11 36

18

Up Front

Inside This Month

14

24

Tech Directory

Taking Appraisal Quality to the Next Level

How to navigate the products we’ve

Departments

44

featured in this month’s tech issue.

Robust appraisal data to be captured early

18

sh elley m . polan d

6

Is it Time for Voice Recognition?

Publisher’s Note

Can’t type or spell? This software is

8

fran k l ucco, SRA, C RP

for you…

by Freddie Mac and Fannie Mae.

36

Form Filler or Appraisal Analyst?

Three comps and a cloud of dust are behind us.

Contributors 20

R. wayne Pu gh , MAI, C RE

10

AVMs and MLS Data Mash-ups

Staiger on Stats

The race to create more accurate AVMs with

48

matt co hen

MLS data.

44

Is Mobility a Myth?

These tools can make it a reality.

Voices of Valuation

j oel ba k er

49

Directory 50

For What It’s Worth

march 2011

cover

Breaking the Paper Chain

The freedom of an electronic office. ernie du rbin, SRA, C RP

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MARCH 2011

* LIVEVALMAG.COM | 5

PUBLISHER’S NOTE

$

THIS WAY IN.....

When I graduated from Anderson University in 1982, I returned home and joined my parents’ real estate appraisal practice. I came home with majors in religion, philosophy and psychology, not

A Letter from the Publisher

exceptionally useful for a real estate appraiser.

Computer science was a new discipline when I was in college and I remember hanging around the computer lab and watching my friends

hammer out basic programs on terminals without monitors; all the output was on paper.

My father was a self-taught technologist. He had written many rather complex programs for his HP desktop calculator. Upon my return, he informed me that my first task in our office was to “computerize.” In 1982, he plunked down $10,000 for several CPM machines with green built-in monitors. Most of them had dual floppy drives, but one had a 10MB hard drive. I remember saying to my father, “We’ll never fill all the space.”

Appraisal software was not available so Dad charged me with the task of writing our own appraisal management system and form-filling program. So began my technological training.

meet the team

The elder Ernie Durbin was unconcerned by my lack of formal CS education; he had read 1

the manuals and taught himself. That’s what he expected of me. I have my father to thank for where I am today. His love for technology

1. Publisher | Ernie Durbin, SRA, CRP

and gadgets infected me, and now I’m involved

2. Editor-in-Chief | Emily Vannucci 3. Copy Editor | Kersten Wehde

2

with technology at the developmental level.

4. Creative Director | Traci Knight

My father died 10 years ago at the age of 77.

5. National Sales | David Peck

Technology has advanced light-years since Printer | Ovid Bell Press

3

Advertising Information | P : 858.832.8900 / E : advertising@livevalmag.com

LiveValuation cover to cover. I know that Dad

Subscription and Editorial | P : 858.217.5332

would be excited by all the new technology that

E : emily@livevalmag.com / W : LiveValMag.com

is available today for his profession, even if he 4

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were retired. I’m sure my father would voice the same concerns appraisers have about the

© 2011 LiveValuation Magazine.

All rights reserved. LiveValuation Magazine is a California limited liability company and is the publisher of LiveValuation Magazine. Reproductions or distribution of any materials obtained in the publication without written permission is expressly prohibited. The views, claims and opinions expressed in article and advertisement herein are not necessarily those of LiveValuation Magazine, its employees, agents or directors. This publication and any references to products or services are provided “as is” without any expressed or implied warranty or term of any kind. While effort is made to ensure accuracy in the content of the information presented herein, LiveValuation Magazine is not responsible for any errors, misprints, or misinformation. Any legal information contained herein is not to be construed as legal advice and is provided for entertainment or educational purposes only. Postmaster : Please send address changes to LiveValuation Magazine, 16745 W. Bernardo Drive Suite 450 San Diego, CA 92127

he passed. He would’ve read this issue of

general state of the industry, but he would be a champion of the advances in technology.

5

We hope this special tech issue will make our readers “champions of technology” too. 6

| Publisher |

Ernie Durbin, SRA, CRP

Peace-of-mind is just one of the advantages we offer.

In addition to our unsurpassed real estate appraiser E&O program, we offer coverage for: AMC Professional Liability (E&O) coverage, worded by LIA specifically for AMCs Bonds for appraiser client contracts and state regulatory AMC requirements – extremely competitively priced General Liability coverage for real estate appraisers including additional insured options required by HUD and other clients E&O insurance for high risk real estate appraisers Health insurance for appraisers and their families through the same exclusive program endorsed by the AMA for its 400,000 physician members – includes 3-year rate guarantee options

n n n n n

LIA’s products are in response to requests made by real estate appraisers and other valuation professionals, seeking to meet the day-to-day challenges of the appraisal industry. In addition, LIA remains to be the leader in loss prevention and appraiser liability education.

For more information, visit our website at www.liability.com, or contact: Robert A. Wiley, Asst. V.P. robert@liability.com, 800-334-0652, Ext. 128 Peter Christensen, General Counsel peter@liability.com, 800-334-0652, Ext. 148

Serving the Appraisal and Valuation Industry since 1977

LIA Administrators & Insurance Services 16oo Anacapa Street, Santa Barbara, CA 93101 Ph: (800) 334-0652 Fax: (805) 962-0652 www.liability.com

I

I

I

*

MARCH 2011 LIVEVALMAG.COM lia@liability.com

|7

CA License #0764257

CONTRIBUTORS

?

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44

ernie durbin, SRA, CRP

JOEL Baker

Joel Baker, a la mode’s Lead Product Coach, has taught hundreds of classes for appraisers and real estate agents on the Web and in-person. A former high school teacher and self-described geek, Baker enjoys new technologies and figuring out ways to apply them in real-world scenarios. One of a la mode’s in-house search engine gurus, he divides his time between training and giving one-on-one advice to XSite customers.

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20

matt cohen

Clareity’s Chief Technologist, Matt Cohen joined Clareity in 1996 and has consulted for many of the top associations, regional MLSs, MLS software vendors, franchises, large brokerages and a wide variety of information and technology companies that service the real estate industry. Cohen is a wellregarded real estate industry expert on industry trends, software design, and information security, and has spoken at many events, including association, MLS, NAR and Inman conferences.

Ernie Durbin began his career in the Real Estate Appraisal business in 1982 and earned the SRA designation from the Appraisal Institute.

Specializing in relocation, Durbin holds the CRP designation from Worldwide ERC©. At the national level, he serves on the Industry Advisory Council (IAC) of the Appraisal Foundation and is also a member of the Collateral Risk Network (CRN). As Publisher of LiveValuation Magazine, Durbin focuses the publication on the concerns of the local appraiser, enhancing existing methodologies and advancing new valuation solutions.

contribu

24

shelley m. poland

18

Frank lucco, SRA, CRP

Frank Lucco is the Managing Director of IRR-Residential Appraisers & Consultants, with offices in Houston, Austin and San Antonio. He is also President of Frank J. Lucco & Associates, a real estate brokerage firm. He has a bachelor’s degree from the University of Houston and has been appraising for more than thirty years. Lucco specializes in residential appraising and consulting. He holds the designations of SRA with the Appraisal Institute and CRP (Certified Relocation Professional) with the Employee Relocation Council.

Shelley M. Poland is Freddie Mac’s Vice President of Single-Family Mortgage Credit Risk Management, a position she’s held since 2004.

Poland is responsible for setting, implementing and monitoring the company’s single-family credit, collateral and servicing credit policies and overseeing the Fraud Investigation Unit. She joined Freddie Mac in 1988 after eight years of holding positions of increasing responsibility in loan operations at Mount South Corporation and other companies.

36

R. Wayne Pugh, MAI, CRE R. Wayne Pugh, MAI, CRE is the CEO of R. Wayne Pugh and Company, a real estate consulting and appraisal firm founded in Baton Rouge in 1975. He is a graduate of LSU, holding a degree in Real Estate Finance. Pugh is also the CEO and founder of Software for Real Estate Professionals, where his firm has developed residential appraisal software for the past 27 years. From 2006-2009, Pugh had the honor to serve as an officer of the Appraisal Institute, wherein he served as national President in 2008. Many appraisers also know Pugh as the author of the “Cool Tools” column for Valuation magazine. In recent years, Pugh has also had the honor of chairing the Louisiana Real Estate Appraisers Board. He is also the author of the “Cool Tools” blog on Facebook. sfrep.com | 225.769.6000

utors

10, 50

ROGER STAIGER III

Roger Staiger III is Managing Director for Stage Capital, LLC. His areas of expertise are commercial and residential real estate portfolio investing; corporate business; and strategic planning; forecasting; valuation; financial modeling; asset repositioning; and risk mitigation through financial hedging for physical assets. He holds positions at Johns Hopkins, Georgetown and Loyola universities. rstaiger@gwmail.gwu.edu

| contributors |

MARCH 2011

* LIVEVALMAG.COM | 9

STATS

STAIGER on STATS I was wrong! There, I said it! My

students and former peers will be

Industry’s latest stats

Roger Staiger III

so very proud. The irony, however, is that now everyone wishes I had

been right! It was the beginning of

2007 and Bank of America sponsored a CFO round table of all their clients in the mid-Atlantic region. BofA

was sponsoring the event to assure

all the builders that the current stall in housing was temporary and had

flown in their economist to reassure

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the group. By the end of the round

table, the economist and I were in a

verbal fisticuffs match over the basics of residential real estate economics, while 20-plus CFOs heckled my

inaccuracy. Fast-forward to 2008,

when a senior vice president at BofA called to apologize, stating, “Roger, I

am calling to apologize for last year’s round table. You were heckled and

you were right.” (I could not get it in writing, but I wrote it down.)

In 2007

inventory … eventually. However, despite

residential market would be first quarter 2011.

“slammed” banks and required proof of

of mean reversion for household ownership

through securitization, what it accomplished

algorithms, just the basics. It is now first

Massachusetts defined a previously undefined

and a double-dip in housing is priced into the

understanding of court-required documents

for the Case-Shiller index.

a much more defined path and process to

the media sensationalism, the Massachusetts ruling was actually a positive for lending

I was professing that the bottom of the

institutions, not a negative. While the ruling

This was based on basic economic principles

ownership of the title from origination

and household affordability. No multivariate

most was a roadmap for future foreclosures;

quarter 2011, the nation is not at the bottom

process. Lenders now have a clearer

futures market as of the November 2010 data

and procedures for foreclosures as well as

Yes, you have read that correctly,

foreclose on properties.

A DOUBLE DIP IN HOUSING IS PRICED INTO THE MARKET! The current futures pricing predicts a new bottom fourth quarter 2011. I predict a bottom of the residential market fourth quarter 2012 (this assumes rational behavior by regulators with regard to Fannie/Freddie underwriting standards, foreclosure proceedings being defined, and moral fiscal behavior by the US populous, i.e., significantly reduced strategy defaults). Regardless of which forecast is correct, housing woes are far from concluded and the worst is yet to come.

The current hot topic sandbagging residential

real estate values is foreclosures, as evidenced by the 50 state attorney generals

media is not the reports of overaggressive

lenders foreclosing but the lack of attention focused on the end-borrower. The vast

majority of end-borrowers being foreclosed

upon are in monetary default under the loan stopped or been significantly reduced from the agreed amount in the loan documents. While the Massachusetts ruling appears to be a win

troubling in the mainstream media is not the reports

for homeowners, it is actually a huge victory for lenders. The roadmap of the foreclosure

process has been defined and all current and future homeowners facing foreclosures have used their “get out of jail free card” and will

of overaggressive lenders foreclosing but the lack of attention focused on the end-borrower.

be proceeding to foreclosure without passing

The vast majority

Go and certainly without collecting their

“$200.” Now that the process is defined, fasten

of end-borrowers

your safety belts: The race to the bottom of

foreclosures and the

the residential market

recent Massachusetts

being foreclosed upon are in monetary default under the

has begun.

Foreclosure Ruling, both of which

The November 2010

the media has

Case-Shiller pricing

sensationalized as

appears to demonstrate

“slamming the banks”

that house pricing has

in many news articles.

once again passed the

The 50 AGs and

Rubicon. Only this

Massachusetts have

loan agreements as payments have completely stopped or been significantly reduced from the agreed amount in the loan documents.

time, with the current

forestalled foreclosures

foreclosure rulings,

and aggravated price

our feet are wet and

declines nationally

which will add to market backlog of excessive

What is more

agreements as payments have completely

forestalling

by contributing to a buildup of inventory

$

What is more troubling in the mainstream

the boats have been

burned. There are an estimated 8 million homes in the U.S. >>

MARCH 2011

* LIVEVALMAG.COM | 11

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in some state of delinquency and/or

the major benefactor from the trillions

historic averages of 2 million and largely

the national leaders to remember what

foreclosure. This is 400 percent higher than attributable to life events, i.e., deaths, job losses, injuries, etc. What remains

consistent is the decoupling of the DC-

MSA from the nation, as measured by the

in stimulus, the nation or D.C.? I beg

happened in France after the Napoleonic Wars when Versailles lost touch with the reality of the nation!

composite-20 index.

An interesting and MBA approach to real

On a month-over-month basis, national

the specific MSA betas as compared to the

home pricing reduced close to 100bps, while DC reduced slightly more than 10bps. The disparity is even more

pronounced when analyzing the yearover-year price changes. The DC-

MSA increased over 350bps while the

nation lost approximately 160bps. The delta in performance between the two

markets is significant, i.e., 5.00 percent differential between DC-MSA and the national composite. The question that

begs answering from the data is: Who is

estate pricing predictions is to calculate

composite-20, i.e., the market. Given that

recent predictions are a continued national market correction of 10 percent or greater,

an extrapolation for each MSA is required.

Beta is a singular measure of risk that

encapsulates all macroeconomic factors

into a single risk factor. It is quantified as

the covariance of the market and asset, i.e., individual MSA, divided by the variance of the total market.

The equation form for beta is as such:

βMSA =

CovMSA,Comp-20 VarComp-20

MBAs are familiar with betas use in equity return expectation using the Capital Asset

Pricing Model (CAPM). The CAPM defines the Security Market Line (SML) and is

used to predict future price expectations, or demands, for equity. Applying its use

to real estate, in layperson terms, indicates that MSAs that are above the 1.00 beta

line will experience a market correction

of more than 10 percent and those below

will experience a market decline below 10 percent. For example, the DC-MSf beta is

1.15. This translates to a market decline for DC of 10 percent. Currently the Futures market only has a 5.00 percent price decline priced into values. 6

MARCH 2011

* LIVEVALMAG.COM | 13

Tech directory

=

BEFORE WE

BEGIN Essential information for this month’s tech issue

Hot Links

How to navigate the products we’ve featured in this issue

THE WEB: VISIT IT!

Voices of Valuation Educate

livevalmag.com

Give us your opinion

LVM Blog Entertain Read Articles

YOU’RE CURRENTLY READING OUR MARCH ISSUE

Inform

livevalmag.com/ articles

Valuation News

HOW TO FIND PRODUCTS

18

pg

14

an expanded guide on where to find the hottest tech products

20

pg

24

pg

FRANK LUCCO

MATT COHEN

SHELLEY M. POLAND

Is It Time for Voice Recognition?

AVMS AND MLS DATA MASH-UPS

Dragon - Naturally Speaking 11 Bluetooth SFREP

Cloud CMA CoreLogic: RealAVM Realtors Property Resource

taking appraisal quality to the next level

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Freddie Mac UMDP

36

pg

28

pg

ad

20

pg

44

pg

THE TECH ISSUE

ad

24

18

pg

pg

28

pg

36

pg

44

pg

ERNIE DURBIN

WAYNE PUGH

JOEL BAKER

BREAKING THE PAPER CHAIN

FORM FILLER OR APPRAISAL ANALYST?

IS MOBILITY A MYTH?

iPhone, Android, iPad RingCentral, Dropbox, CrashPlan, SnagIt, Adobe PDF, JotNot, GoogleDocs, Open Office

S.M.A.R.T., CompCruncher, LiveValuation RPM, AVT, Caliper Corp. Maptitude, Microsoft Excel

DaVinci (a la mode), iPad, iPhone, Leica DISTO, Android, Square, Evernote Bluetooth

MARCH 2011

* LIVEVALMAG.COM | 15

TECHnology PRODUCT DESCRIPTION

Cloud CMA Compares the AVM value of comparable sold properties against the subsequent selling prices of properties from the MLS and to active listing prices. cloudcma.com

Caliper Corp Maptitude

Corelogic: RealAVM Delivers

Microsoft Excel With Excel, the

highly accurate valuations at fast speeds. Combines data from your local MLS and CoreLogic’s nationwide property database. corelogic.com/products/automated_ valuation_models.aspx

Intelligent mapping software with a powerful combination of technology and geographic data. caliper.com/maptovu.htm

appraiser can model any process and handle virtually any appraisal problem you can conceive. office.microsoft.com/en-us/excel/

Dragon - Naturally speaking Realtors Property Resource

Provides Realtors with data on every parcel of property in the United States, giving brokers and agents valuable tools and features to make them better informed. blog.narrpr.com

Eliminates the use of a keyboard and uses your voice to produce text. Speak your thoughts; then watch your words appear onscreen. nuance.com

graphs as tools where the appraiser is in control of analyzing the data. smarterappraising.com

CompCruncher Puts appraisers

in control of the valuation process, giving them the ability to produce supportable, transparent, accurate valuations in record time. appraisalworld.com/CompCruncher

LiveValuation RPM Valuation software powered by MLS data producing real time metrics. livevaluation.com

AVT Helps the appraiser understand their markets and deliver leading edge valuations in an environment that is more complicated and competitive than ever. avttools.com

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developed and marketed by Apple primarily as a platform for audiovisual media. apple.com/ipad

iPhone 4 A smart phone with a high-resolution display, FaceTime video calling, HD video recording, a 5-megapixel camera, and more. apple.com/iphone

Dropbox A cloud storage solution that provides local storage and synchronizes between multiple computers while backing up all of your files. dropbox.com

CrashPlan A social backup

concept that makes it easy to back up to computers belonging to your network of friends or family for offsite backup and uses your own computers and external drives for onsite backup. crashplan.com

DISTO A laser measuring device, the

Leica DISTO™ D5 is designed with many functions and features to make measuring easier. leica-geosystems.com

SnagIt An easy screen capture

software to create interesting training documents, collaborative design work, IT bug reports, and more. techsmith.com/snagit

Android A smart phone that uses Bluetooth Wireless technology

S.M.A.R.T. Provides interactive

iPad A tablet computer designed,

that lets you connect computers, mobile phones, and handheld devices to each other and to the Internet. bluetooth.com

SFREP Full suite of appraisal technology tools for the real estate appraisal industry. Product development is lead by R. Wayne Pugh, MAI, CRE, an appraiser with over 37 years of industry experience.

Technology is appraiser-centric and focuses on getting the most accurate appraisal out the door as fast as possible. sfrep.com

the Google-developed Android operating system and platform. android.com

Square An app for smartphones that allow you to quickly and securely accept credit card payments over your iPhone, Android or iPad. squareup.com

Evernote An app that helps you keep track of nearly anything by storing all of your notes in the cloud, giving you the ability to access it wherever you are. evernote.com

Freddie Mac Umdp A program to

improve the quality and accuracy of loan data delivered to each GSE. freddiemac.com/sell/secmktg/ uniform_mortgage.html

DaVinci (a la mode) A free app

on iPhones, iPads and coming to Androids, allowing appraisers to quickly draw sketches in the field.

It’s as easy as the swipe of a finger. alamode.com/davinci

RingCentral Functions as a fax machine and replaces phone systems. All incoming calls are routed to cell phones and directs voice mails as well as faxes into your email inbox. ringcentral.com

Adobe PDF The global standard

for capturing and reviewing rich information from almost any application on any computer system. adobe.com/products/acrobat/ adobepdf

JotNot This app acts like a pocketsized scanner to capture data and convert them to PDFs enabling you to email them as attachments or upload it to the cloud. jotnot.com

GoogleDocs Create and share your work online and access your documents from anywhere.

Manage documents, spreadsheets, presentations, surveys from any computer or smartphone. docs. google.com

Open Office The leading opensource office software suite for word processing, spreadsheets, presentations, graphics, databases and more. openoffice.org

t h e

TECH i s s u e

WHAT’S INSIDE

LIVEVALUATIONMAGAZINE MARCH 2011 TECHNOLOGY ISSUE

take on the hottest products and up-and-coming technology ventures

the Brainy Authors:

within the valuation space. We cover everything from talking to your computer

M a t t C o h en

(voice recognition software) to Freddie Mac’s electronic initiative and even a step-

E rnie D urbin , S R A , C R P

This month we’ve recruited the brainiest of brainy authors to give us their

by-step manual on how to create a paperless office. So, come on in – there’s a lot to take in … and hey, you just may learn something new in the process!

J o el B a k er

Fr a n k L u c c o , S R A , C R P S h elley M . P o l a nd R . W a yne Pu g h , M A I , C R E MARCH 2011

* LIVEVALMAG.COM | 17

U

up front

<

V

8

oice recognition software is one piece of technology that’s probably enhanced my productivity more than anything else. I utilize voice recognition software when answering e-mail, inputting data into my form fill residential software, creating Microsoft Office documents and responding to text messages on my iPhone.

The software has come along way and I have enjoyed the ride.

Although I was a member

Is it Time for Voice Recognition?

Can’t type or spell?

This software is for you… fran k l u cco , S R A , C RP

of the slide rule club in

junior high school and we one the state meet (not

much use to me now), I

failed to learn any typing skills and never took a

typing class. This did and

did not hamper me early in my career as an appraiser because back then we

had secretaries. I utilize a dictation machine, which the secretary would then

transcribe into a document.

In the early ’80s, when the

personal computer started to take hold, my lack of typing skills exposed a

real weakness on my part.

I almost broke down and

took typing class, but then I came across Via Voice

software from IBM and the journey began.

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My first attempts at voice recognition software

were met with limited

success. The software was iffy, computer resources were minimal and the training manual was

pathetic. Fortunately there is a large area personal

computer special interest group in my city which

happened to have one of

the SIG coordinators that was big-time into voice recognition software. I would go to monthly

meetings and be fascinated by the demonstrations he would perform dictating documents in fields as

complicated as medicine in which I had no idea what every other word meant, let alone how to spell it.

In his skilled hands, the

voice recognition software just humming along at

over 150 words a minute,

without skipping a beat and virtually no errors, was a sight to behold.

Voice recognition software also alleviated one of my

other skill set weaknesses: my inability to spell.

Many times I cannot even get close enough on the

spelling of a word to have spell-check correct it.

Fortunately I live by the

words so eloquently spoken

by Andrew Carnegie: “If you cannot spell a word

four or five different ways, you are probably stupid.”

He could not spell either.

As I attended these

monthly meetings and

played around with voice

I have utilized it effortlessly

and clarifications of your

pecking my way through

several things became very

Microsoft Word, Excel,

you can effortlessly go on for

clerical issues to ever get my

recognition software,

apparent. You had to throw

way the headset microphone that came with software and purchase a decent

microphone, and the more RAM memory you had in

your computer, the better.

I went through several

versions of Via Voice software and eventually moved to

Dragon - Naturally Speaking. i Fast forward to 2010 and

I have a badass notebook computer with a core I7 processor, 8 GB of ram

memory, solid state hard

drive and a cool Bluetooth i headset running Dragon - Naturally Speaking 11

voice recognition software.

inside such programs as Access and PowerPoint.

It works great inside my

form fill software, SFREP. i It is a lifesaver in Microsoft Outlook and browsing the Internet. I’ve dictated in

excess of 250 words a minute and in some cases with 100% accuracy. For me, shackled with the inability to spell and type and faced with

I’m to the point now that if

I’m considering purchasing a new device and it won’t

accept my voice recognition

software; it is a no go for me.

and accuracy and elevate

boggling, multitasking,

never ending and sometimes frustrating endeavor. I have

drastically reduced my stress and strain by employing this technology tool in my

day-to-day operations.

If I get

a new computer, smart phone or other device, the first program I load is my voice

recognition software.

do that improve the speed your success with voice

recognition software. Being able to think on your feet

your other high-level tasks,

find them. 6

such as emptying the garbage get buried into your eloquent appraisal narrative if you’re not careful.

can actually have CNBC or

the background and still be able to dictate without any interference. For me, that

juice is worth the squeeze and practicing with your

voice recognition software is no different than spending

the time with any other piece of hardware or software to

understand its functionality so you can use it to the best of your and its ability.

Appraisal Institute, both of

probably won’t appreciate

rapid-fire responses,

improved my dictation skills.

As a famous management

consultant once said, begin with the end in mind. It

does help to know where

you’re going before you sit

down with microphone. Be aware of how many other

events you have going on.

For me, that juice is worth the squeeze and practicing with your voice

By the way, although the

which required accurate,

document – see if you can

can, that whole dialogue can

helps a lot. Public speaking

and teaching courses for the

point across.

P.S. I left the errors in this

room and reminds you of

Desperate Housewives on in

top of my productivity list.

it, too bogged down with

significant other walks in the

fashion, this tool is at the

need completion in a timely

managing e-mails, text

work product is a mind-

in mind, however, if your

I am impressed how you

There are things you can

messages and creating daily

paragraphs if need be. Keep

a mountain of tasks that

Information overload is at an all-time peak and just

residential appraisal report,

recognition software

editor of LiveValuation

this, it only took 6.5 minutes

and five error corrections for

is no different than spending the time with any other

me to create this document.

piece of hardware

seems now-days it is much

understand its

Hey, maybe it shows, but it

more about productivity than perfection. If I would have had to type this document

I would still be on the first

or software to functionality so you can use it to the best of your and its ability.

paragraph, hunting and

For instance, if your firing

back some fantastic analytical theory and techniques to an underwriter that just

requested five corrections

i

Dragon 11: nuance.com BlueTooth: bluetooth.com SFREP: sfrep.com MARCH 2011

* LIVEVALMAG.COM | 19

U

up front

have been used by banks for more than a decade, but recently there has been new interest among other parties. Even brokers who were formerly skeptical of AVM performance now have an interest in them, especially as AVMs incorporate listing data and become more accurate.

What has the impact been

of leveraging

listing data? When

CoreLogic began

incorporating listing data

AVMs and MLS Data Mash-ups

into their AVMs three years

The race to create more accurate AVMs with MLS data.

the last two years.” Banks

I

mat t c o h en

t used to be that Automated Valuation Models (AVMs) were entirely driven by public record data, but they have increasingly been made more accurate by incorporating MLS and other data sources into the valuation calculation. AVMs 20

|

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ago, they described the

impact in a press release: “Adding supplementary

data has made a tremendous difference in our model

performance,” said Susan Allen, Vice President of Collateral Solutions for

CoreLogic. “Our models now produce results on

over 85% of US homes, and we have reduced our error rates by more than 50% in and their regulators are

obviously happy with the

improvement. Most recently, FFIEC regulators released a

70-page document updating guidance on valuations, and included a section

affirming a role for AVMs 1.

in the lending practices of regulated banks.

“An AVM may be used for a transaction provided the resulting evaluation … is consistent with safe and sound banking practices, and produces a credible market value conclusion.”1 Of course, vendors that supply AVMs to banks

must be careful to ensure that the AVM is not

inappropriately influenced by active listing data.

The new guidance makes

more than 50 references to

“independence” in property valuations. A list price is typically determined by

a seller and listing agent,

both interested parties in

the real estate transaction.

It follows that an AVM

based too heavily on list prices may run afoul of

banking regulations. But not everyone interested in property values is a

regulated bank. Perhaps

the more significant recent development for AVMs is broader reach to new real estate participants.

For many years, most

Realtors were hostile to

AVMs and did not engage

with AVM providers in any way, even as consumers were starting to access

AVMs through sites such as

occ.gov/news-issuances/news-releases/2010/nr-ia-2010-138a.pdf

realquest.com. Then, Zillow

One of the best tools for

show how the AVMs for

and whether professionals

do this is a product called

with both actual sold prices

made AVMs ubiquitous

liked it or not, consumers

real estate professionals to

were coming to real estate

Cloud CMA (cloudcma.com). i This product has a feature

“Zestimate” valuation.

Analysis, illustrated below,

professionals with Zillow’s For several years, many

professionals ignored this

and other AVMs, discounting them as inaccurate, but now they are engaging

with AVM consumers more productively.

called the Online Valuation which compares the AVM value of comparable sold properties against the

subsequent selling prices

of sold properties from the

MLS and to active listing list prices.

One of the best ways to

Armed with this type of

regarding the AVM is to show

consumer (including buyers

engage in a discussion

how local market knowledge provides context regarding

the accuracy of the valuation.

comparable homes compared

The largest AVM provider

examples below, the AVM is

offers RealAVM™, i which

in one of the comparable

34 percent above the likely

selling price – or perhaps it

is entirely accurate – but this type of report provides the

basis to begin that discussion and immediately overcomes any assertion that AVMs

provide a figure that should be taken as gospel.

Realtors can also provide

and sellers) approaches

for “freeware” AVMs by

AVM, the professional can

Realtor AVM market.

and list prices. Perhaps, as

report, when an AVM

the professional with an

battling for a share of the

more accurate context

leveraging professional-grade AVMs, and two players are

One of the best tools for real estate professionals to do this is a product called Cloud CMA. This product has a feature called the Online Valuation Analysis, illustrated below, which compares the AVM value of comparable sold properties against the subsequent selling prices of sold properties from the MLS and to active listing list prices.

in the industry, CoreLogic, aggressively leverages

MLS data in the models

and analytics. RealAVM is built on the same data set

and infrastructure used to

provide AVMs to 18 of the top 20 mortgage lenders.

CoreLogic also uses MLS data in the Listing and

Market Activity Reports

(LMAR). The LMAR report includes a subject property

profile including both MLS listing and public record

information; the MLS photo of the subject property;

recently sold comparables similar to the subject

property; and recent and

active listings that are similar

to the subject property. It also accounts for neighborhood

trend information, including median sales; listing prices; sale velocity; number of

transactions of properties

over the past three, six and 12 months; variation of sale and listing prices for the past 12

months; foreclosure activity; and average days on market trends.

CoreLogic’s market-specific data covers 98 percent of

all U.S. ZIP codes and 3,085 counties in all 50 states and the District of Columbia,

representing 99 percent of >>

i

Cloud CMA: cloudcma.com CoreLogic RealAVM™: corelogic.com/products/automated_valuation_models.aspx

MARCH 2011

* LIVEVALMAG.COM | 21

the U.S. population, 97

percent of all properties

(145 million), more than 50

million active mortgages, and 96 percent of loan-level, nonagency mortgage securities.

In addition to the public

record data, the AVM models have data detailing which

properties are currently for sale, the characteristics of the property, and current

asking price for the property.

CoreLogic has several

additional AVM products.

For more information on

these, visit corelogic.com/ products/automated_

valuation_models.aspx.

The other player in the AVM battle is a company created

by the National Association i of Realtors called Realtors Property Resource (RPR™).

One of RPR’s key strategic goals is for Realtor data

The other player in the AVM battle is a company created by the National Association of Realtors called Realtors Property Resource (RPR™). One of RPR’s key strategic goals is for Realtor data to become central to the collateral valuation and risk process.

to become central to the

collateral valuation and risk

process. To that end, RPR has created a new product, the

RVM, or Realtors Valuation Model. The RVM launched at the MBA (Mortgage Bankers Association)

conference in October

2010. The traditional root

cause of inaccurate AVMs is bad property data from

public records, so the RVM

improves AVM accuracy by comparing for missing or

possibly inaccurate property

characteristics or sales prices

that data can be manually

then uses licensed MLS

example, the RVM software

in public records. The RVM listings of all statuses –

including active, pending,

and sold listings – to improve the accuracy of its AVM

calculation. Similar to how

evaluated in the Cloud CMA automatically adjusts its

valuation calculations based

on list prices and sales prices of comparable properties found in MLS data. The

RVM also accounts for other data in the valuation model,

Realtors Property Resource (RPRTM):

blog.narrpr.com/rpr-partners 22

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i

including local foreclosure, pre-foreclosure, auction

and REO data, and other

data “behind the scenes”

The traditional root cause of inaccurate AVMs is bad property data from public records...

in establishing a real-time

There are many other

for AVMs. CoreLogic also

valuation models, and

most ubiquitous modeling

property valuation. Realtors

providers of automated

also interact with the AVM

one can expect that MLS

and Realtor appraisers can

model in the RPR application,

and other data sources

creating a feedback loop on

will become increasingly

data and model accuracy.

important to all of them

going forward as they strive

The RVM is available for

for improved accuracy.

more than 200 MLS markets,

Two aspects of AVM

constituting approximately 36 percent of U.S. listings,

and coverage is expanding rapidly. A map showing

market availability based on MLS partnerships can

be viewed at blog.narrpr.

development will be There are many other providers of automated valuation models, and one can expect that MLS and other data sources

com/rpr-partners. Realtors,

will become increasingly

can access the RVM via the

going forward as they strive

including Realtor appraisers, RPR system at no cost. Others can purchase the RVM from

RPR by calling 888.914.7771.

important to all of them for improved accuracy.

important to the direction

the market ultimately takes: data coverage and patent infringement. CoreLogic has aggressively put up

some barriers to competitors achieving listing coverage in their AVMs by signing

has a patent covering the approaches underlying

industry AVMs (U.S. Patent #5,361,201, issued Nov. 1,

1994, for an automated real estate appraisal system) and announced patent

infringement claims against

several industry participants last year. That said, the

competition is really just starting, and it will be

exciting to watch how

the contest for the listingenhanced AVM market evolves. 6

exclusive agreements with a number of local and

regional multiple listing

services for using the listings

MARCH 2011

* LIVEVALMAG.COM | 23

| shelley M. poland |

takingappraisalquality

>

> tothenextlevel Robust appraisal data to be captured early by Freddie Mac and Fannie Mae.

24

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The recent collapse of the housing market not only underscored the critical importance of appraisal data to sound underwriting,

but also highlighted how little appraisal data was submitted to mortgage investors

at the time the loan was purchased.

In fact, at Freddie Mac we generally obtained only limited, identifying

property data as part of a loan delivery, and the only time we saw the entire

appraisal was when it was retrieved

as part of a quality control review of a particular loan.

This is changing. And this change is

comparable to the one that occurred in the 1990s when credit information of

unprecedented detail became available to investors through the nationâ&#x20AC;&#x2122;s credit repositories. Just as that development in credit information led to a

transformation in modeling and pricing credit risk, I believe we are on the cusp of a major enhancement involving

appraisal data. This change will enable

us to capture more appraisal data earlier in the lending process and to use that data to make better decisions about

individual loans, as well as improve

the next generation of mortgage risk modeling.

The driving force behind this change is the Uniform Mortgage Data Program (UMDP), an effort jointly undertaken

by Freddie Mac and Fannie Mae (the

government-sponsored enterprises or

GSEs) at the direction of our regulator

Federal Housing Finance Agency (FHFA) to improve the quality and accuracy of loan data delivered to each GSE.

First, the Uniform Appraisal

UMDP: The Next Level for Appraisal Data Quality

Dataset will minimize the

ambiguities in the definition

of data from one party to the

Currently, Freddie Mac and Fannie Mae are working together under the UMDP

next by standardizing terms, formats

uniform appraisal data and other loan

data fields. Specific UAD requirements,

loans purchased and/or securitized by

16, 2010 Freddie Mac Single-Family

electronic portal for submitting appraisal

formats for key data elements that will

That means, once fully implemented

consistent appraisal reporting. The UAD

appraisal data quality and accessibility.

disparate terms with consistent formats

The UMDP i consists of three

dollar values, dates, sales types, views,

appraisal and lending communities

quality.

of electronic appraisals and other loan

Initially, the new standardized terms,

approach to deliver appraisal data to

appear on the fields of four primary

to provide our customers with complete

and responses within the appraisal

delivery data standards for single-family

which were laid out in a December

either GSE. The UMDP also creates an

Seller/Servicer Guide Bulletin, include

data to Freddie Mac and/or Fannie Mae.

be standardized in order to produce

in 2012, the UMDP will improve both

requirements also replace vague or and terminology for such fields as

property condition and construction

components that will provide the

with a common dataset for the capture delivery information and a common

definitions and data elements will

both GSEs.

appraisal report forms for loans

delivered to Freddie Mac: the Uniform

These components are: Uniform Appraisal Dataset (UAD), which includes all the fields for a complete appraisal as well as standardized definitions and responses for a key subset of appraisal data elements.

g

g

Residential Appraisal Report (Freddie

Mac Form 70), Individual Condominium >>

Uniform Collateral Data Portal

(UCDP), which provides lenders

with a single web-based interface

and business process for delivering

electronic appraisals to one or both of the two GSEs.

g Uniform Loan Delivery Dataset

(ULLD), which includes all the loan data points that will be required at loan delivery and utilizes MISMO industry data standards for

...the Uniform Appraisal

Dataset will minimize the

ambiguities in the definition

of data from one party to the next by standardizing terms,

formats and responses within the appraisal data fields.

reference model data points, data definitions and file formats.

Since our focus is

on appraisals, letâ&#x20AC;&#x2122;s

concentrate on the two

components that speak directly to it.

i

UMDP: freddiemac.com/sell/secmktg/uniform_mortgage.html

MARCH 2011

* LIVEVALMAG.COM | 25

:

Unit Appraisal Report (Form

successful implementation. The

Individual Condominium

is intended, among other things,

465), Exterior Only Inspection

tips for improving

Appraisal Report (Form

quality processes

Report (Form 2055).

in-house appraisal

466) and the Exterior Only

Inspection Residential Appraisal

The second appraisal-

related component of

One of the keys to responsible lending

standards is a reliable in-house process for

the UMDP effort is

the Uniform Collateral

evaluating the quality, integrity and accuracy

Data Portal. Under the UCDP,

effort to help lenders develop and strengthen

developed by Freddie Mac

quality, Freddie Mac provides tools, like

a single common pathway

on decades of experience and on-site lender

like appraisal management

of appraisals and appraisal reviews. In an

an electronic portal being

their controls and capacity to manage appraisal

and Fannie Mae will provide

Home Value Explorer, and guidance based

where lenders or their agents,

reviews.

companies (AMCs), can submit

For example, some of the fundamentals to sound appraisal management include:

electronically to one or both of

1 2 3 4 5 26

Documenting and monitoring policies and procedures for compliance and effectiveness; roviding employees with training P and guidance on underwriting appraisals, and approving, monitoring and managing appraisers and appraisal management companies (AMCs); onitoring the performance M of appraisers, AMCs, appraisal reviewers, and proactively managing to specific performance benchmarks;

high-quality appraisal data the GSEs.

The UCDP will provide

lenders with feedback that will enable them to track

their submissions and make

corrections or modifications, if needed. Whatâ&#x20AC;&#x2122;s more, the new portal will also incorporate a

UAD compliance check based on the appraisal standards so

lenders will have a ready tool to manage their adherence to the new appraisal data standards.

All of this should help lenders

their new business processes

and technology by providing

a longer lead time between the availability of the UCDP and

its required use for electronic appraisal delivery.

Specifically, Freddie Mac and Fannie Mae issued

announcements in mid-

December laying out the

requirements for the UAD

and UCDP. Under the new

timeline, appraisers must use

the appropriate appraisal forms based on the UAD standards for appraisals with effective

dates on or after September 1,

2011. Lenders will be required to use the UCDP to submit

electronic appraisal reports for the four UAD-based appraisal

forms, as well as Freddie Macâ&#x20AC;&#x2122;s

Manufactured Home Appraisal

Report (Freddie Mac Form 70B) and Small Residential Income Property Appraisal Report

(Freddie Mac Form 72) for loans delivered to Freddie Mac on or

after March 19, 2012, where the loan application date is on or after December 1, 2011.

Submissions to the UCDP must

loan delivery and increase

Extensible Markup Language

the chance for errors prior to the efficiency of the lending process.

Given the magnitude of the

pplying appraisal review processes A to all appraisals, but varying them based on predefined levels of risk.

based on feedback from lenders

LVM

to give lenders more time to test

and appraisers further reduce

onducting due diligence of AMC C policies, processes and key controls on an ongoing basis; and

|

new implementation schedule

UMDP, Freddie Mac and Fannie Mae revised the effective dates for the different components

and other industry participants to provide more time for a

include either an acceptable (XML) data stream that

includes an embedded Portable Document Format (PDF) file,

or a first-generation embedded PDF file. PDF files must

include all exhibits, addenda and photographs, including

Freddie Mac Form 71, Market Conditions Addendum to the Appraisal Report.

Getting Ready for UMDP

Appraisers should also take advantage

Once fully deployed in March 2012,

In order to help the industry make

should participate in upcoming training

processes embodied in the UMDP

September 1 deadline, the GSEs have

vendors and industry trade groups to

updates on the UAD and UDCP and, in

data requirements, such as date formats,

materials and opportunities.

values responses. Appraisers should

Freddie Mac is committed to continuing

ensure they are implementing the new

of Freddie Mac’s online resources and

the transition and meet the upcoming

programs by their appraisal software

created a joint process to facilitate

learn all they can about the forms’ new

the weeks ahead, will provide training

standard abbreviations, and standard also work with AMCs and lenders to

we expect the new technologies and should increase lender and investor

confidence in loan-data quality, and improve risk management. Both of

which are fundamental to Freddie Mac’s mission to build a strong foundation of responsible lending practices,

ensuring loan quality through sound

underwriting that is supported by strong

to work closely with our lender partners

standards appropriately.

transition to the new requirements, and

At the same time, AMCs should be

Finally, this initiative is key for risk

created a governance structure and

find out how the process of uploading

of data and the submission of data in

to ensure as smooth and successful

together with Fannie Mae, we have

meeting with their lender clients to

process to facilitate future updates.

submissions to the new portal will

Meanwhile, appraisal software vendors

own systems can process appraisals in

software to incorporate the new data

clients’ needs. Meanwhile, lenders are

work with their appraisal forms software

of the additional tools and guidance

training. Both Freddie Mac and Fannie

internal quality controls and internal

be managed and to ensure that their

are in the process of updating their

electronic formats that meet their lender

standards. Appraisers and AMCs should

strongly encouraged to take advantage

vendor on software availability and

Freddie Mac provides to strengthen their

Mae are working closely with appraisal

appraisal management processes.

technology and business processes.

management too. The standardization electronic form are intended to facilitate appraisal underwriting reviews by

lenders, which should reduce defects over time. Accurate and robust data

lies at the heart of risk management for lenders, as well as here at Freddie Mac, helping us create models and policies that ensure we are putting families in

homes they can afford to buy and keep for the long term. 6

forms software vendors and industry trade groups to provide training opportunities.

Improving appraisal quality

on February 1, 2011, we began

objective at Freddie Mac.

interior photographs, as well

has been a long-standing In the aftermath of the

housing crisis, we are seeing significant improvements

in appraisal quality as more

lenders implement appraiser independence controls,

make greater use of Freddie

requiring appraisers to include as photographs of any physical deterioration that could

materially affect a property’s

market value or marketability, with their interior or exterior inspections.

Mac risk tools and establish

We also continue to

for resolving valuation issues

Appraiser Independence

defined escalation processes earlier in the origination process.

emphasize the new

Requirements (AIR), which

was implemented, together with Fannie Mae at the

To build on this success,

direction of our regulator,

multiple fronts. For example,

Agency, to replace the Home

we are stepping up efforts on

the Federal Housing Finance

Value Code of Conduct

AIR sets minimum licensing

HVCC was intended to help

prohibits a wide range of

(HVCC). Adopted in 2009, the insulate appraisals from undue influence by lenders, real

estate professionals or other interested parties. The new

AIR builds on the success of

the HVCC, which expired on November 1, 2010, under the Dodd-Frank financial reform law passed last year.

requirements for appraisers,

practices that could cloud an

appraiser’s objectivity (such as withholding payment for an

appraisal report or demanding reports hit a predetermined

value), and provides guidance

focused on improving accuracy and quality.

freddiemac.com/singlefamily/appraiser_independence.html MARCH 2011

* LIVEVALMAG.COM | 27

28

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The freedom of an electronic office.

E r nie D u r b in , S RA , C R P

MARCH 2011

* LIVEVALMAG.COM | 29

The

journey tow@rd

&

>

freedom.

Software Services

Approx.

95% of business information is still stored on paper.

Source: International Institute for Environment and Development (IIED) Discussion Paper.

115 billion sheets of paper are used annually for personal computers.

Source: Worldwatch Institute

Forty-five% of the paper printed in offices ends up in the trash can at the end of each work day.

Source: Environmental Paper Network, citing a study by Xerox.

The average U.S. office worker uses two pounds of paper products every day.

Source: Environmental Protection Agency.

Every year enough paper is thrown away to

make a 12-foot wall from New York to California.

Source: techsoup.org/greentech/paper/page10834.cfm

30

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{

{

quick guide to

a paperless appraisal

Hardware

Before the Inspection

Capture the order paperless from inception. Do away with your paper fax machine.

Appraisal order information should go in an electronic file folder on your computer.

1. “Open” and “Closed” folders.

• “Open”: Every appraisal that has not been transmitted to a client.

• “Closed”: Becomes closed once the order is completed and is sub-organized by year and quarter.

At the Property Gather information solely in an electronic method. All major software vendors provide a handheld solution.

1. iPhone is a great solution. The camera is very high quality (flash is weak).

If given paper while at the property, the JotNot application creates images of these as PDFs. E-mail (or upload via Dropbox) notes to yourself, including comparables selected in the field.

Writing the Report Buy an additional monitor for your computer. This is essential to paper reduction.

1. Display everything that you are tempted to print on one of your two screens. Instead of printing these documents, save them as a PDF. Completed reports are printed to the electronic file folder and then e-mailed to the client.

Buy a high-quality scanner and paper shredder for the paper you acquired during the appraisal process.

Scan the information remnants into the electronic file folder and then shred them.

MARCH 2011 LIVEVALMAG.COM | 31 *

My

journey Back in the glory days, before the

financial crisis, HVCC and the AMC onslaught, I had a large residential

appraisal practice in Southwestern

Ohio. Several of my appraisers had been with me more than 20 years and my

last trainee was a seven-year certified veteran. With the horsepower of this staff and the fuel of technology, my

well-oiled appraisal machine produced reports at unprecedented volumes.

Our appraisers and their support staff

composed highly documented quality

reports; even the simplest work file was a quarter-inch-thick. A platoon of black file cabinets stood at attention, lining

the walls of our office, each protecting only the most recent files. Off-site

storage had a battalion of legal-size

cardboard storage boxes corralling only the last four years of paper-based work

files. The management and organization of these work files was a logistical

challenge that consumed not just space but our most valuable resource: time.

The glory days are long gone now.

As market conditions changed so did my appraisal business. Most of my

mortgage clients dumped me by the

end of 2007 when we began to indicate “oversupply” on the 1004. The radical

change in business volume forced me to downsize my firm and reinvent myself in the appraisal space. Nationwide

travel was in my future; I realized I would have to work remotely and

paper work files stood in the way. As a result of these difficult changes in

my appraisal practice, I have emerged

office. Hey, now you can put your copy machine, fax machine, filing cabinets, phone system, toner cartridges and

reams of paper on Craigslist. Better yet,

“gift” these encumbrances to that newly licensed trainee who just became your competitor; he’s too “green” to know better. Without question, a paperless appraisal office will equate to cost

savings. Given the fee compression appraisers are experiencing, cost

savings are important … but not the most important.

one of the best business decisions I

anywhere, and I mean anywhere. I have

ever made, even if forced on me by challenging circumstances.

paperless means you can do business answered questions on a relocation

assignment from Panera, completed

a court case in the Delta Sky Lounge

The Benefits

and worked a Cincinnati assignment

A primary benefit of the paperless office

is of course the “green” effect. Being

paperless is certainly environmentally

reviewer in a Third World country can figure out fewer natural resources are

consumed by a paperless office. Become

paperless and you will

qualify as one of the cool “green” people

concerned

with their

carbon

footprint.

Green is also

the color of

money. Being paperless

will save

LVM

maintain an antiquated paper-laden

Mobility is the most important. Being

Looking back, going paperless was

fewer trees are felled. Even an AMC

|

on all kinds of supplies necessary to

as a truly mobile paperless appraiser.

friendly. Less paper is consumed and

32

you considerable funds once spent

in Key West, Florida (in the middle of winter, too). After the inspection and comparable photos are taken, you’re

free to roam. This is the beauty of being

paperless. My electronic file is available to me anywhere the Internet reaches,

and that includes coast-to-coast flights.

I’m a free man. No office will hold

me and my clients never know the difference.

Now that I have experienced my virtual appraisal environment, I lament not doing it earlier. Had I applied the

paperless lessons learned from the 2007 downturn earlier, I would’ve been a happier, more profitable

appraisal entrepreneur. Sometimes I lie awake at night thinking about

how I would’ve operated my former

high volume appraisal shop in light of the technological renaissance I have experienced. That brings me to the

last benefit in a short list of benefits: scalability.

With a paperless valuation office you

inception. E-mails are obvious, but fax

volume more efficiently. I’ve always had

introduce paper from the start. Do away

can adapt your business to order

appraisers as employees, but why do

I need to give them the desk? If I need

subcontractors for excess volume, why not set up a virtual environment for

them? Sure, I would want to see people in my office sooner or later, but why

require a daily pilgrimage? Easier for

them, less expensive for me; everybody wins. The paperless office works for

large organizations as well as the lonewolf appraiser.

It’s Electric… the Paperless Appraisal Start to Finish

machines and orders taken by hand

to the Closed folder, which is suborganized by year and quarter.

with your paper fax machine. There

Some research is necessary before an

incoming faxes to PDFs. My personal

have a list of potential properties with

are numerous services that convert favorite is a company called RingCentral, i which

appraiser goes to the property. You must you to shoot comparable photographs in the field. I use a handheld

functions as

device and laptop

my fax machine

computer in the field;

and also

others use devices

replaced

such as iPads. i

my phone

Some folks,

system.

however, are just

Incoming

not comfortable

calls are

with this. If you

routed to

require a paper

our cell

file for this portion

phones. Voice

of the process, elect

mails as well

reusable legal size see-

Every effort to be “paperless” really

as faxes appear in

orders that never involve cellulose,

of these items can be stored

but store none. The goal is to be totally

order. If an order is taken by hand, scan

like most goals it will take a while to

and shred the original paper order

appraisal order from cradle to grave.

into your management system (all major

paper involved but the end result is

your order is started.

through this process we will touch on

Now let’s talk about how to organize

At the Property

(see the call out section for a list of these

to your appraisal order needs to go

You don’t have to change the way

through plastic sleeves.

means to minimize paper. There are

our e-mail inboxes. All

and those that will use some paper,

in a central electronic file folder for the

listing printouts as well as an inspection

electronic and consume no paper;

the details into the electronic file folder

in the field to make any notes you

achieve. Together we will follow an

sheet. Enter the details of your order

You will see that there is usually some

software companies provide them) and

a totally electronic file. As we move

The sleeves can contain a

different hardware and software needs

your electronic files. Everything related

items).

in an electronic file folder on your

Before the Appraisal Inspection Occasionally someone will order an appraisal over the phone but most

orders nowadays come in by e-mail or fax machine. In this market, an order is an order, and I’ll take it on a paper

napkin. However, no matter how the

order is taken it needs to be processed electronically. A good starting point

is to capture the order paperless from

computer. This includes anything that would normally be in a paper file and maybe a few extras. Physical items

are scanned as PDFs i and any voice

messages (MP3s) are also saved to the

specific assignment folder. We have two

major file folder headings on our server: Open and Closed. Inside of the Open

folder are subfolders for every appraisal that has not been transmitted to a client. Once the order is completed, that file folder is

dragged (or moved)

printed order form, map, and multiple

template for notes. Use these papers

want, on the order form or MLS sheet;

“temporarily” store these in the reusable plastic folder. We will discuss what to

do with these “paper security blankets” later.

you gather information about your

subject property and comparables in

the field. If you are still “paper trained” you’re just going to have to scan that information later and shred those

documents. When the property owner provides you information in the field, put it in your plastic sleeve. You can

collect information the same boring and ecologically abusive way you always have, if you really want to. >>

i

RingCentral: ringcentral.com iPad: apple.com/ipad Adobe PDF: adobe.com/products/acrobat/adobepdf MARCH 2011

* LIVEVALMAG.COM | 33

That being said, real efficiency can be

over them and created electronic copies

SnagIt i or a similar product).

solely in an electronic method. All

don’t have a phone (iPhone or Android) i

Closing the File

digital camera on its highest-quality

Completed reports are printed to the

gained by gathering information

the major software vendors provide a handheld solution. Contact your

vendor to discuss these options. Many appraisers use tablet technology and actually enter information directly on their forms in the field. I have

using this wonderful application. If you that will accept this application, your setting will also do a great job. All of these field images are transferred to

your electronic file back at the office.

found this to be a bit cumbersome,

Writing the Report

an iPhone and collect my inspection

Paper grows like weeds when you begin

but it’s better than using paper. I use notes, including the sketch, directly on this device. The camera on this phone is actually superior to my

digital camera in many regards (phone

flash is weak). At the end of the inspection, I

e-mail (or upload via DropBox)

my notes to

myself, including comparables selected in the field.

I do

exclusively

relocation

appraisal

work now and

homeowners usually

provide information

for review when I tour

their home. While at the property, I

use the application JotNot i to create

images of these papers with my smart phone. This inexpensive program is

certainly my favorite phone app. You simply take a picture of any sized

document and it finds the edges and

creates a PDF that can be e-mailed or

uploaded to the cloud. I have even placed house plans on the floor, stood

JotNot: jotnot.com iPhone: apple.com/iphone Andriod: android.com 34

|

LVM

to research and write your report in the office. MLS sheets, online courthouse

records, plat maps, zoning maps, and verification notes are just a few of the items that are contained inside of a

properly documented appraisal file. A

few inexpensive hardware and software acquisitions and these items will never

use a speck of toner (or ink if you’re that far back).

Your first hardware purchase must be an additional monitor for your computer. The dual screen work

environment is essential to paper

electronic file folder and e-mailed to the client. It’s up to you when you move the file from the Open to the Closed

folder. I generally move it immediately.

If there are questions on my relocation assignment, I simply refer to the

closed file. Revisions are printed as

an additional PDF into the closed file.

Some may choose to leave folders in the

open section until the appraisal invoices are paid. With smaller organizations this can serve as a reminder of who

still owes you (although I’m sure you know).

Now come the final two pieces of

hardware. You will need a high-quality scanner and decent paper shredder.

Whether you like it or not, you may have acquired some paper while processing your appraisal.

reduction. If you work on a laptop it’s

Scan these information remnants into

monitor. Most modern desktops also

them. I use a Fujitsu ScanSnap, a duplex

as easy as plugging in an additional

support dual monitors. Monitors are

very inexpensive nowadays; buy the largest you can. “Location, location,

location” also applies to “screen real

estate”; the larger the monitor, the more open windows you can locate onscreen.

Now instead of printing the MLS record, you can

the electronic file folder and then shred scanner that will capture both sides of

the document in one pass. The scanner comes with document management

software including Adobe PDF writer.

Choose whichever scanner you like

but make sure you select a duplex. The easier it is to close the file, the easier it will be to kick your paper habit.

working your appraisal form on the

Final Considerations

everything that you are tempted to print

USPAP certainly provides for

put it on your right-hand screen while screen directly in front of you. Display on one of your two screens. Instead of printing these documents, save them

as a PDF inside of

i

your electronic work file. Take screen

shots for further

documentation (use

electronic record keeping. But it is

your responsibility to make sure these files are thorough and well protected.

Backup and security are essential. As a normal part of the workflow, I use

an online service called Dropbox. i A cloud storage solution, Dropbox

Your

also provides local storage and

synchronization between multiple

computers. There are several other

similar solutions that are also available.

The advantage of this cloud storage is redundant backup of your files. Files

journey

are stored not only in the cloud but

Making the move to a paperless office

provides you with an off-site and on-site

eating the proverbial elephant. How

as well. Because I’m a bit anal-retentive

saying goes, “One bite at a time.” First,

a similar backup solution. CrashPlan

As people get enthusiastic about being

files over a network. You can back up

of their previous files. This becomes an

location over your LAN or at a remote

task that blocks the

is critical; if you have a fire at your

in time and become

have copies of your files elsewhere. All

point. Leave the past in

also on other computers you own. This

may appear to be a daunting task, like

backup solution with multiple versions

do you eat an elephant? As the old

about losing files, I also use CrashPlan, i

don’t concern yourself with the past.

utilizes your own computers to back up

paperless, they envision scanning all

one computer to another at the same

almost insurmountable

location via the Internet. Off-site storage

initiative. Pick a point

office you want to make sure you still

paperless beyond that

of these solutions are “set and forget.”

the past. Second, don’t be too idealistic

i

going to use some paper; just don’t

store it! You will make measurable gains consuming less and less paper on every assignment. Finally, don’t wait for a

specific date to start. Countless people want to wait to for the beginning of a

calendar year. That’s nonsense; you can start down this path today. I guarantee

you’ll remember the day you made this decision. It will change your life for the

better; you will save money, work more efficiently, and be able to spend more time with your family. 6

DropBox: dropbox.com CrashPlan: crashplan.com SnagIt: techsmith.com/snagit

about being fully electronic. You’re

Peace-of-mind is just one of the advantages we offer.

In addition to our unsurpassed real estate appraiser E&O program, we offer coverage for: n AMC Professional Liability (E&O) coverage, worded by LIA specifically for AMCs n Bonds for appraiser client contracts and state regulatory AMC requirements – extremely competitively priced n General Liability coverage for real estate appraisers including additional insured options required by HUD and other clients n E&O insurance for high risk real estate appraisers n Health insurance for appraisers and their families through the same exclusive program endorsed by the AMA for its 400,000 physician members – includes 3-year rate guarantee options LIA’s products are in response to requests made by real estate appraisers and other valuation professionals, seeking to meet the day-to-day challenges of the appraisal industry. In addition, LIA remains to be the leader in loss prevention and appraiser liability education.

For more information, visit our website at www.liability.com, or contact: Robert A. Wiley, Asst. V.P. robert@liability.com, 800-334-0652, Ext. 128

Serving the Appraisal and Valuation Industry since 1977 CA License #0764257

Administrators & Insurance Services

Peter Christensen, General Counsel peter@liability.com, 800-334-0652, Ext. 148

16oo Anacapa Street, Santa Barbara, CA 93101 Ph: (800) 334-0652 Fax: (805) 962-0652 www.liability.com lia@liability.com

I

I

MARCH 2011

* LIVEVALMAG.COM | 35

| R. wayne Pugh, MAI, CRE |

f o r m

Fi l l e r

OR

a p p r a i s a l

a n a l y s t ?

T h ree c o m ps an d a c l o u d o f d u s t are be h in d u s .

36

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LVM

A vastly weakened economy, millions of foreclosures, a number of bad actors on Wall Street, and, in general, the long-term viability of

our financial markets,

all have led our lender and investor clients to re-evaluate their business

processes with the goal of

So the days of “three comps and a cloud

descriptive statistics, charts, graphs,

is a new dawn with a wealth of market

LiveValuation RPM, a value estimate

of dust” are now behind us, and there information to feed reliable market analysis and advanced analytics.

and in the case of CompCruncher and with a measured level of confidence.

Yes, these applications are new to the

For most communities, real estate

appraisal community, and our first

appraisers now have access to an

abundance of data through their MLS

services, co-ops, and private databases.

It’s time to begin utilizing this data

to understand more about the market

response is usually to doubt their

credibility and application to our own

markets. But ask yourself: How well can the dynamics of a market be measured

with three, six or even nine comparable

minimizing their financial risk.

sales using an adjustment process that

To appraisers that means they are

we get a better picture by studying

include more meaningful information,

the trends defining the market? At a

appraisal reports. The days of the well-

tools discussed below. Some just may

is mostly unsupported, at best? Could

increasing the reporting requirements to

a much larger sample to understand

analytics and in the end more credible

minimum, take a look at some of these

educated, experienced appraisal analyst are just beginning.

The first indication of this change

began with the release of the 1004

Market Conditions form. The 1004MC

expanded the reporting requirements to aid the underwriters’ abilities to better understand the market surrounding

the appraised property and comparable sales. While some appraisers were

already performing this analysis, the

vast majority of appraisers simply were not. Without this market information, appraisers are not able to provide

be able to give you an edge up on your

To appraisers

competition.

that means they

are increasing the

S.M.A.R.T.

reporting requirements to include more

The first time I saw the S.M.A.R.T. i

meaningful

application demonstrated, I knew the

information,

developer had a hit on his hands. Never

analytics, and in the

before have appraisers had the ability to

end more credible

analyze sales in bulk with such flexible

appraisal reports.

function and meaningful results. As an

The days of the well-

added benefit, S.M.A.R.T. will complete

educated, experienced

the 1004MC form with minimal input

appraisal analyst are

from the appraiser. The user just

just beginning.

downloads the filtered MLS data and

drags the file to the S.M.A.R.T. icon, and

the detailed critical analysis needed

to measure the metrics of a changing economy.

The second indication evidencing this

trends and their impact on the elements of value. We just need the tools.

S.M.A.R.T. shows you the following

dashboard view of your selected data.

The entire premise behind S.M.A.R.T.

is to provide tools where the appraiser

trend is the release of the new Uniform

The most innovative new tools

appraisers will be asked to provide

amounts of market data: S.M.A.R.T.,

will cite this as an attempt to mine

RPM, and a series of products from

appraisers, but this is simply not true.

These applications analyze

to provide the level of information they

thousands of sales and

reporting.

with meaningful

Mortgage Data Program. Once again,

are products that analyze vast

more information for their clients. Many

CompCruncher, LiveValuation

more meaningful information from the

Automated Valuation Technologies.

Instead, the GSEs are asking appraisers

hundreds or even

need to ensure credible analysis and

provide the appraiser

i

is in control of analyzing the data, not

to analyze data for the appraiser. There are many software programs that can produce a graph; in S.M.A.R.T., the

interactive graphs are the tools! Now an appraiser can work with data in >>

S.M.A.R.T.: smarterappraising.com

MARCH 2011

* LIVEVALMAG.COM | 37

CompCruncher and LiveValuation RPM CompCruncher i and

LiveValuation RPM take a

different approach: Each of these products help the appraiser rapidly manage their way

through the valuation process.

Simply put, each product

functions as an appraiserâ&#x20AC;&#x2122;s

assistant with connections to the data resources necessary

to prepare a regression-based

limited appraisal report using a direct sales comparison

approach. Both applications

provide analytics to help rank the comparability of sales transactions and develop adjustments, all while

allowing the appraiser to smarterappraising.com

a visual format instead of numbers.

control the decisions throughout the process.

The analysis transforms right before your eyes and becomes the final

image that is placed in an appraisal.

Whether an appraiser is analyzing a market with 100 sales over the past 12 months or 10,000 sales over the

past 10 years, the amount of time and effort is always the same. S.M.A.R.T. allows the appraiser to study both

macro and micro trends at the same

time, and allows the user and reader to

understand the dynamics that the parts

have on the whole. The underlying data can be pushed into virtually any form,

without ever punching in a single digit.

Finally, powerful analytics empower the appraiser to study entire market

dynamics in real time with relative ease and a very small learning curve. For

$25 per month, no appraiser should be without S.M.A.R.T.

CompCruncher: appraisalworld.com/CompCruncher

38

|

LVM

i

appraisalworld.com/compcruncher

a

CompCruncher

The CompCruncher application, which produces the Collateral Valuation

Report (CVR), allows an appraiser to build a valuation model at the

neighborhood level. In other words,

using their own local market expertise, an appraiser can extract from a local neighborhood all of the factors that

contribute to value, such as GLA, baths, site area, age garage and basement

values. Additional features include

tools that can rank all of the comparable sales and listing data to assist and

support the appraiserâ&#x20AC;&#x2122;s decision on

the most appropriate and applicable

sales. The regression-extracted property characteristics can also be used to

support the adjustments made to the

sales in the sales comparison analysis of three to five comps. Using sophisticated regression analysis techniques,

experienced appraisers can blend a

powerful analytics tool with their own

appraisal knowledge to deliver a more detailed and supported solution to clients.

a

iveValuation RPM and L Valuation 2.0

The team at LiveValuation â&#x20AC;&#x201C; and

others â&#x20AC;&#x201C; believe the renewed emphasis on collateral risk will usher in a new

livevaluation.com

era. The new era will be evolutionary, not revolutionary. Just as authors

moved from the typewriter to the

word processor, appraisers will finally

non-MLS data sources. Understanding

expanded solution. For Valuation 2.0 to

The LiveValuation flagship product

forming an opinion of value. Analysis

scenario. Those producing valuation

Property Metrics. The road map for

via regression and hedonic modeling.

development efforts by Ernie Durbin

required and modeling is used as a

Lee Trice. The product design is simple,

addition to a traditional

outcome. RPM is form agnostic and

an XML payload so they

migrate from form filling to process.

the market profile is just as critical to

is called RPM, i an acronym for Real

of sales and listing data is accomplished

RPM is based on pioneering software

However, no complex training is

and re-engineering criteria laid out by

benchmark and not the solution. In

with a focus on process as opposed to

report, the client receives

ingests data from a variety of MLS and

can fully benefit from an

i

be adopted, we truly need a win-win

products must do so with efficiency and confidence, and those consuming these

products must get greater transparency and objectivity. >>

LiveValuation RPM: livevaluation.com

MARCH 2011

* LIVEVALMAG.COM | 39

a A utomated Valuation Tools (AVT)

their markets, and deliver

AVT i operates under

captures, stores, analyzes,

environment that is more

Geographic Information Systems (GIS)

critical and demanding than

Another interesting group

merging of cartography,

popularity, use geographic

database technology.

leading valuations in an

complicated, competitive,

manages, and presents data linked to location(s). In the simplest terms, GIS is the

the belief that there is

ever before.

“Neighborhood Appraiser.”

One publication worth

local market is unique and

Introduction to Statistics

remote computer analysis.

Marvin L. Wolverton, Ph.D.,

The Appraisal Institute

are hardworking and

reference for the appraiser

two books covering

question, appraisers will

analysis. As with the other

as they have the knowledge

be purchased by clicking on

focuses on helping the

at appraisalinstitute.org.

no substitute for the

of products, gaining in

Their knowledge of the

mentioning is An

cannot be duplicated by

for Appraisers, written by

These local appraisers

MAI. It is an excellent

dependable. Without

investigating statistical

carry out their duties as long

publications, this book can

and tools to do so. AVT

the Publications & Store tab

appraiser understand

automatedvaluationtools.com

a

40

|

LVM

i

ow can I learn H more about GIS?

has recently published this technology. Visual Valuation by Mark R.

Linne, MAI, SRA,with Michelle Thompson,

Ph.D., explores advanced technical applications of

GIS. The valuation scenarios mapping as the basis for

presented in this new book

relationships. It wasn’t until

to the complex, as various

that I truly understood

expertise leverage

data in a Geographic

address valuation issues.

commonly known as GIS.

demonstrations provided

a 3-D histogram of overall

to valuation modeling and

Angeles County. The cooler

the concerns of more

the lower, safer rates, while

already comfortable with

spikes represent the higher,

technology. Each chapter can

understand where the

of a larger argument about

trying to draw the same

practice in the 21st century.

of data from which the chart

Their second publication

describing data trends and

range from the approachable

I saw the following chart

contributors with diverse

the value of displaying

existing technologies to

Information System, more

The discussions and

This chart above provides

will educate appraisers new

capitalization rates in Los

GIS while also addressing

tones and valleys represent

sophisticated users who are

the warmer tones and

practical applications of the

riskier rates. It is easy to

be read on its own or as part

higher risk exists. Imagine

the evolution of appraisal

conclusions from the table

Automated Valuation Tools (AVT): automatedvaluationtools.com

statistical analysis and

was developed.

is GIS in Real Estate:

Technically, GIS is a

and Presenting Locational

system, or geospatial

III shows in detail how a

Integrating, Analyzing,

geographical information

Information. Gilbert H. Castle

information system, that

geographic information

system, which examines and displays

view of the employment levels in

The two spreadsheets shown on the

suited to the detailed analysis of real

representation of the data. What

used to extract important market

data in a spatial context, is uniquely

estate data and its presentation in your

appraisal reports. Both publications can be purchased through the AI Store at appraisalinstitute.org/store.

Of the three online GIS seminars offered

Manhattan provides a simple visual do you think will provide a better

understanding of employment levels in Manhattan: the 3-D chart below or the table of data from which the 3-D chart was derived?

Microsoft Excel

introduction to GIS applications for

Without a doubt, Microsoft Excel i is

appraisers looking to use technology

available to the real estate appraiser.

the appraiser. This seminar is aimed at to assist them in their appraisal

practice. Some of the appraisal-related processes discussed in this seminar

include: assisting with a market analysis assignment; assisting with evaluating

the distance or drive time to suppliers and customers so that the most

efficient location can be selected for a

can be found at appraisalinstitute.org/ education/default.aspx.

protection command under the tools

fields that require user input.

The application has so many applicable

factor. Summary statistics are provided

uses; it would be impossible to address them all here. So, I have limited this article to just two appraisal tools

developed using Excel. Links to both of these spreadsheets are provided with the graphs on the following page.

approach or a more detailed direct sales

sensitive processes. Class registration

own specific needs by turning off the

The first spreadsheet can be used to

by overlaying boundary lines over

flood data; and many other location-

be modified to accommodate your

the most flexible and productive tool

With Excel, the appraiser can model

USGS maps and overlaying soil or

Each of the spreadsheets can easily

only allows the cursor to access the

warehouse or plant; helping appraisers better understand a large piece of land

information from a group of five sales.

menu. Currently the protected sheet

by the Appraisal Institute, “GIS - The

Executive Overview” provides the best

following page are simple applications

any process, whether it is a simple cost

extract the living area adjustment

below the grid to quantify some of the

indications. Users should consider that the indications would represent the

higher end of the range of the living

area adjustment factor. Other elements of comparison, such as story height,

bedroom and bath count, design and appeal, and quality of construction

aren’t addressed in the calculations.

comparison analysis with automated

The section below the summary

commands. Excel has the flexibility to

show an analysis of the unitized

adjustments driven by macro

handle virtually any appraisal problem you can conceive.

statistics shown on the first spreadsheet difference in each comparable’s

adjusted living area value. The data was then sorted by size. Please understand

that the data included in the table is not from actual sales, so don’t focus on the indications. Instead, see the process.

a C hoosing the Right GIS Application

The second spreadsheet can be used

to extract the annual depreciation rate and economic life. As with the first

The Appraisal Institute’s GIS users’

spreadsheet, summary statistics are

group reviewed the majority of GIS

provided below the grid to

applications considering pricing,

quantify some of the

features and ease of use, and Caliper

indications. >>

Corporation’s Maptitude i was their choice. Members of the AI can purchase the $695 product for $520 (a 25%

discount). More information can be

found at caliper.com/maptovu.htm.

Just as in the cap rate example in the

Manhattan Employment chart, a 3-D

caliper.com/maptovu.htm

i

Caliper Corp. Maptitude: caliper.com/maptovu.htm Microsoft Excel: office.microsoft.com MARCH 2011

* LIVEVALMAG.COM | 41

Don’t forget, you can use your forms software for pairing sales Every appraiser is familiar with

at least one of the GSE’s appraisal

forms. Remember, if you have reliable support for all but one adjustment,

i.e., a swimming pool, complete your grid accordingly, and the swimming pool adjustment can be extracted

by comparing sales with pools to

those without. It’s a simple residual

process, but it’s certainly accessible to every residential appraiser. Just think of the form as nothing more than a preformatted spreadsheet.

TO download this xls. doc: bit.ly/absdfe

Without a doubt, Microsoft Excel is the most flexible and productive tool available to the real estate appraiser.

Conclusion If one thing is constant, it’s change.

Just look back and consider how your

business processes and resources have

changed in the past two decades. I doubt you will see very much that looks the

same. From typing reports on an IBM typewriter, to fax machines, to laser

printers, to digital cameras, to electronic mapping, and to the explosion of

Internet resources and services, I would propose that we have all adapted quite well to the many changes that have helped shape what we do today.

As with technical advancements, changes in how and what we deliver to our

clients has and will continue to change to provide streamlined processing of

appraisal orders, reviews, reports, and communications.

The primary point I hope to get across in this article lies in the appraiser’s

curiosity, adaptability and willingness to challenge what they know. The bar has been raised and residential appraisers everywhere will have to gain the

knowledge to ensure their reports remain

TO download this xls. doc: bit.ly/fd98eb 42

|

LVM

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MARCH 2011 LIVEVALMAG.COM | 43 To learn more, call 800-640-7601 or visit us at www.intercorpinc.net *

| Joel Baker |

|

LVM

it

y. alit re

44

se

s can MA l o KE to

A

Th e

Is mobility a MYTH?

So long as appraisers have to inspect homes, they’ll always be

in search

of ways to gather data m o r e e f f i c i e n t l y i n the f i e l d .

Always.

And it’s the job of dreamers and

software providers to find a way

The reason is that two key pieces of technology came about in the last

decade, and neither of them sound

particularly groundbreaking at first blush: the cloud and multi-touch

screens. When it comes to mobile appraising, these two pieces of

technology changed everything.

We’ll discuss these things further, but here’s why these two things matter, in a nutshell.

Storing your documents in the cloud (i.e., on a Web server) means you have just one single version of a

to help you do it.

document, accessed from anywhere,

Until recently, it’s been

No more “it’s on my computer at

made available on all your devices.

the wall. You should too. Leveraging

like proving unicorns exist.

the office.” What multi-touch did

You’ve heard it all before: “And

brain-dead-simple way for people to

was usher in a previously unimagined,

now, introducing the latest in mobile [fill in the blank]! Lose the clipboard

Grove Real Estate & Valuation Services

to the hype. So why would we present

in Chico, CA, says he’s gone completely

you with yet another article on the

paperless since buying his iPad i last

latest in mobile appraising technology?

cost, weight, and durability, that makes being a mobile appraiser – like we all dreamed back in 1998 with the now-

Paleozoic Era HP clamshell Pocket PCs – a reality.

We, and our competitors, have fielded all kinds of solutions over the years.

Whatever the pros and cons of the

software, we were bound somewhat

year. He uses the DaVinci i for iPad

The reason is that two key

app to create sketches and collect data

pieces of technology came

while on inspections.

about in the last decade,

and neither of them sound

“I seriously do all of the data in the

particularly groundbreaking

field. I don’t write anything on a

at first blush: “the cloud”

piece of paper. It’s actually turned me

and multi-touch screens.

completely paperless,” Grove says.

When it comes to mobile

“When I get back into the truck, I pull

appraising, these two pieces

up the spot that says ‘condition of the

of technology changed

property’ and I go ahead and use the

everything.

iPad’s keyboard to type in basically my paragraph and a half of ‘It’s a pretty

by the hardware. Pocket PCs had tiny

screens. Five years ago tablet PCs cost

field and go paperless in the office is our

Neal Grove, who works for Robert

forever!” But reality has rarely lived up

successful convergence of technology,

together, to boost your efficiency in the mission.

appraising technology, it’s the new

It’s very simple. There’s finally been a

this technology, and integrating it

normal house, it’s kind of cluttered, it’s

a fortune and weighed a ton. UMPCs

use software applications on the go,

and the list goes on. Remember the

hardware market resulting in lower

going paperless has been a fantasy for

durability. Apple, Google,

were a joke, netbooks were too weak,

and launch a whole new competitive

digital pen? Until now, the reality of

prices, higher quality, and great

most appraisers.

Microsoft, Dell … all the heavy hitters see the

got this, it’s got that, unpermitted space, blah blah blah.’ I type all of that up as if

I were typing a report, while it’s fresh in my mind. Then, when I get back to >>

i

multi-touch writing on MARCH 2011

* LIVEVALMAG.COM | 45

the office and sync it, it’s all there.”

Pythagoras

Grove also uses a DISTO laser i

measure walls

measuring device to get - all of

his measurements for the sketch.

Combined, the tools save him hours on appraisals and cut down on the hassle of retyping and redrawing. “It saves

me probably about a half-hour on the

inspections. It used to take me an hour and now it takes me a half-hour

functions

i

Bluetooth: bluetooth.com Square: squareup.com

from a distance.

Tilt sensors let you measure over fences blocking a direct line of sight. Some have Bluetooth i capabilities that

send the measurements straight into

your software and sketch for you. And

there’s a rugged, pocket-size version in

Barnett, of Barnett Appraisal Services

Inc. in Baton Rouge, LA, uses DaVinci on his iPhone to create sketches while on the property. He offers this advice to appraisers just starting to use the

iPhone app: “Don’t give up at first even if it seems like something that’s

max to do an inspection. Then,

alien or foreign (to you). Just

at the report writing stage,

stick with it. Practice with it on

instead of taking close to two

a couple of dummy properties,

hours, it takes me a little over an

at least a few simple houses,

hour. I mean, it’s huge,” Grove

and you’ll get the hang of

says.

it eventually.” That’s great

advice. And besides apps, smart

The tools of the trade

phones offer access to e-mail

and the Web from anywhere, so you’re more responsive to

At this point, there is nothing

clients and always in-the-know

you can do on, or with, a

about your business.

clipboard that you can’t do with an Apple iPad (and there will soon be similar alternatives

Key apps every appraiser needs

Dell). Any notes, data, sketches,

DaVinci is the premier mobile

from Google, Microsoft and

or photos you get in the field

can be handled on an iPad elegantly.

every price range. We hear people say

in the office to type up.” Use DaVinci

faster with my tape measure than you

“But I take notes and give it to a person (or another field data tool) to easily

enter data once with the large multi-

touch screen, sync it to the cloud, and

have it populate your report before you

all the time, “I bet I can measure a house can with a laser.” That’s like saying you could frame a house faster with a rock than a hammer.

Finally, you’ve got to get a smart

It’s mature technology now, and it just

variety, simply to do better business.

works. Lose the clipboard.

Next, lose the tape measure and get a laser measuring device, such as the

DISTO. It’s more accurate, faster, and keeps you out of people’s shrubbery and mud puddles. One-touch

phone, be it of the iPhone i or Android i Like the iPad, smart phones give

appraisers access to thousands of apps that help with everything from basic calculations to GPS, sketching, notetaking, voice recording, and more.

Some super-savvy appraisers forego

Leica DISTO: leica-geosystems.com iPhone: apple.com/iphone Android: android.com 46

|

LVM

the iPad and

i

about the only one out there). It’s free on iPhones and iPads, and coming

soon to Android, and makes drawing

sketches in the field as easy as a finger swipe. And your desktop QuickLists

text database is kept in sync with your

get back to the office, saving you time,

and the time of the person in the office.

appraising application (it’s

tablet entirely and

conduct inspections completely on their phone. Stephen

mobile devices, so data entry is simply a matter of selecting from dropdowns.

Everything syncs to the cloud and

populates your desktop report for you, so there’s nothing to retype, including the sketch.

Download the free Square app i for

iPhone, iPad, and Android to quickly and securely accept credit card

payments as soon as the inspection

is done. The joys of non-lender work include getting paid full fees and on

time. Why not make it faster and easier for clients? After downloading the app

and signing up for an account, Square mails you a free card

reader, which connects in the device’s headphone jack. Type in the amount, swipe their card, and the client signs with

their finger or your stylus to make the payment. According to Square’s website (squareup.com), there are no activation or

hidden fees, but there is a processing fee of 2.75 percent + 15 cents for swiped transactions and 3.5 percent + 15 cents for keyed-in transactions.

Appr aisal

TSI

®

We’re Hiring.

Join Us!

Last, Evernote i is an awesome note-taking app that helps you keep track of nearly anything. The cool part is that all

your notes are stored in the cloud, so regardless of where you happen to be or what device you’ve got, all your notes are with you. Evernote is great for inspection notes, snapping

TSI Appraisal® is hiring 200+ staff appraisers to supplement its existing appraisal network across the United States.

pictures, and tracking mileage and time spent. Since all the

We are seeking highly skilled candidates to fill numerous

each note is talking about. You can download Evernote

open staff appraiser positions. Opportunities are only

notes are geo-coded, you’ll know exactly which property

(PC, Mac, iPhone/iPod Touch/iPad, Android, Palm, etc.) at

evernote.com. All the downloads are free for any device., but we strongly suggest upgrading to the $5/month premium version for tighter security features – especially if you’re

storing photos of homes or your own personal information.

available in these states: Alabama, Colorado, Connecticut, Florida, Georgia, Indiana, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon,

Come on in, the water’s fine

Pennsylvania, Rhode Island, Tennessee,

These are just a few examples of fantastic tools and apps

and Wisconsin. Qualified

Texas, Virginia, Washington, D.C.

out there today, and the coolest part is that they’re easy to

residential appraisers are

use and affordable, which are usually the two reasons many

invited to complete our

doesn’t grow on trees, and time is not always abundant. So

short appraisal evaluation at:

appraisers are hesitant to adopt new tools like these. Money

what’s different now? Better technology, lower prices, bigger screens, greater durability. Ask the appraisers you know that leverage new technology. Don’t take our word for it. See

tsiappraisal.com/ appraisers

for yourself how these tools can save you money, make you money, boost your efficiency, and make your job easier. The unicorn has been found, saddled, and ridden to appraisal inspections. 6

Evernote: evernote.com

i 877.762.5342 = tsiappraisal.com TSI Appraisal 1450 W. Long Lake Road, Suite 400 Troy, MI 48098 =

MARCH 2011

* LIVEVALMAG.COM | 47

VOICES OF VALUATION

8

VOICES OF VALUATION Last month’s articles sparked a lot of debate. Here are some responses from our readers.

Regression Analysis: Tools of the Trade

1

Rdf Vstc Good article and comments.

Points well taken. I see us as a group with some new tools and capabilities who are not yet in a new paradigm applying it all. A little at a loss for what to do with the new capabilities. I use regression as a tool. Like my car. It’s not allowed to “just go where it wants” I manage it, I utilize it, same as my calculator .

7

LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM LVM

2

do you have something to say?

www.livevalmag.com 8

Something About a Forest and Trees

Alpine Appraisal Despite its brevity, this article is perhaps the most essential analysis of all that is currently broken in the appraiser-lender relationship-- even moreso because it goes beyond diagnosis and justifiable griping to offer such a clear and implementable solution.

Fred Great Article. Fortunately for me I no longer have to experience these unrealistic, ridiculous and meaningless underwriter demends. For I no longer provide appraisals to AMCs. Yes my business volume has dropped but my income has remained level as I do half as many appraisals but for twice the fee the AMC was paying. The problem is not with the AMCs. The problem lies with us, the appraisers. As long as we accept the meaningless demands of the AMCs along with their substandard fee structure, we should expect to be treated like children and comply with their every ridiculous request. The answer is simple.............JUST SAY NO!

State Appraiser Coalitions

48

|

Jmstratton Great job Julie. During my 43 years in the appraisal field the current formation of CoAA here in Arizona has been the best thing for appraisers that has ever happened. I encourage every appraiser in the USA to join their state coalition or help get one started in your state. Arizona appraisers can contact CoAA at http://www.azcoaa.us And tell all the other appraisers in Arizona about the link.

LVM

2

directory

DIRECTORY

ACI

Global DMS

a la mode, inc.

IRR-Residential

800.234.8727 aciweb.com

1.800.252.6633 alamode.com

Buildfax

877.600.2329 buildfax.com

Clareity Consulting

877.866.2747 globaldms.com

888.548.8258 livevaluation.com

SFREP

913.261.1800 irr-residential.com

800.523.0872 sfrep.com

Intercorp

Stage Capital, LLC

800.640.7601 intercorpinc.net

202.640.8912 rstaiger@gwmail.gwu.edu

LANDY

TSI Appraisal

612.331.1788 callclareity.com

800.336.5422 landy.com

Freddie Mac

LIA Administrators & Insurance Services

703.903.2000 freddiemac.com

LiveValuation

877.762.5342 tsiappraisal.com

800.334.0652 liability.com

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FOR WHAT IT’S WORTH

When I ask my classes, “What is the American Dream?” they always respond “Homeownership.” Then I ask them about our economic structure, i.e., whether it is capitalist, socialist or communist. The male students,

with chests proudly displayed, say,

“Capitalist!” I further ask the definition of capitalism and we eventually decide on

private ownership of material and capital.

The question, or rather the issue, is

the definition of ownership. Websters. com defines ownership as “legal right of possession.” Perhaps the problems

The American Dream

Roger Staiger III

with America were not started by the

lenders, regulators, or American culture, but rather by Webster’s?! Shouldn’t the

definition of ownership be expanded to

include a minimum equity percentage of value?

I remember telling my class a story

about the first time I met a girlfriend’s

father and he commented about liking my car. I responded, “Well, it is a nice

car but I paid cash.” He did not respond so I repeated myself, just in case he had not heard me: “The car is paid for.” I

must have sounded exasperated as my girlfriend at the time pulled me aside and said, “What is wrong with you?

Stop telling him you paid cash!” I was

dumbfounded! Anyone could “own” the

car but I had paid cash, i.e., I truly owned

the car! In truth, there was nothing wrong with me. I just believe I am one of the few that truly “gets it.”

When I think of the American Dream’s beginning it was in the ‘50s, right after

WWII, when everyone wanted to “own” a home. At that time, homeownership

meant a 50 percent down payment and a maximum 15-year note. It was an

accomplishment to own a home, a matter of pride and the ultimate indicator of success.

50

|

LVM

In the 2000s the American

Dream morphed into perversion.

Homeownership became a right rather than a result of hard work and a long period of self-denial as one saved the

50 percent down payment. The dream

drastically changed, in my opinion, from homeownership to home occupation,

i.e., public ownership. When FHA began providing home loans at 97.5 percent

of home value and high-leverage loans became the norm, the social fabric

of America changed. The American

Dream had changed and so did this

great capitalist nation. Dare I say it?

I dare! Ownership without equity is communism! American society has

become communist despite our masked verbal veil of capitalism. America must revert back to what made this a great

nation, hard work and self discipline.

In 2010 there was a political upheaval when the House of Representatives

was lost by the Democrats and won by the Republicans. Now the focus is on 2012 and the nation demands

more changes. Instead of talking about political frontrunners for 2012 and the

potential impacts of the 2010 election on politics, I nominate Mikhail Gorbachev for president in 2012. What America

needs is Perestroika, and who better to

instill private ownership in a communist society than the one person today with experience: Mikhail! Even better, I

understand he is currently unemployed

and therefore available for our top post!

My students never like facing this

reality but recognize its validity. Further, regardless of my nation’s changes, I

remain a believer in the capitalist system, even if it has failed of late. So if you ask

me if I own my home, I will tell you, “Yes! I am below 50 percent LtV and have a 15year note.” If you ask me if I own my car, I will tell you, “Yes, I paid cash!” Is there

something wrong with me? Perhaps. The greater question is, “Is there something wrong with American society?” 6

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