The mortgage industry isn’t the only one still adapting to a technology disruption. A recent survey found that mortgage appraisers believe that their industry is on the brink of significant change as well.
Computershare Loan Services polled its network of appraisers on their experiences and views on a range of subjects, and found that they’re generally optimistic about the future of technology, but need some help adapting.
Of particular interest was desktop appraisals, which exclude a property visit by the appraiser. Instead of a site visit, the physical inspection of the property, comments about the condition of the property, any kind of measurements, and pictures are completed by a licensed real estate professional or inspector, and the appraisers complete their value conclusions using that as well as other MLS and public data.
Jim Smith is president of Property Solutions LLC, which provides various approaches to property valuation, asset management and title services. He said that over the last year, there has been a lot of conversations around those types of hybrid products, as well as pilot programs from GSEs that have made them more accepted in the marketplace.
“It’s definitely quicker, but it’s also more cost effective. When rates were a little bit lower in certain markets, you saw appraisals going up to $1,000 or more and taking a long time to get done, and the consumer ends up paying for that. So when you talk about the customer experience, not just timeliness but also the cost it puts upon them, these products are a phenomenal benefit to them because they are quicker and they’re far less expensive.”
Thirty-five percent of respondents said that they currently use desktop technology for at least a quarter of appraisals, and 70% said that they expected to deploy such methods for at least the same amount of their work over the next few years.
In addition, although only 12% said that desktop appraisals represent at least half of their work now, 37% said they expect to undertake more than half of their role using desktop technology within the next couple of years.
Smith said what was more “enlightening” than the appraisers’ expectation of how technology will change their work was how they felt about training, the lack of which is a barrier to adoption.
“We just throw the words ‘technology’ and ‘data’ out and then we just assume that people know what we’re talking about,” Smith said. “I don’t think as an industry we’ve done a very good job about relating that to their job and how do you use data, how do you use all these tools to be efficient and still do your job well. Our company in particular is putting a lot of effort into a lot more training through webinars and conferences and those type of things, but I think as an industry we need to tackle this problem a little more seriously about training appraisers to get them competent.”
Not only will increased competency benefit current appraisers, but make the industry more attractive to a younger workforce not only because of technology, but because of the increased earning potential. Any way to increase the number of appraisers and inject new blood into the aging industry is a good thing, he said.
As in any industry, some companies are early adopters, and others are left playing catch-up. If the appraisal industry doesn’t take the time to properly train appraisers with the latest technology, Smith said, the appraisers just won’t accept the assignments, forcing companies to implement more time and effort into training. Taking a proactive approach to training, however, is a much better way to support the people on the front lines—and working with companies who are proactive in that space gives originators an advantage.
“I think there will be a separation of valuation companies out there, they’ll probably be the early adopters and ones that will be the later adopters. I encourage originators to gravitate towards the companies that have been doing it or on the forefront of this movement because we put a lot of time, effort, and resources talking to GSEs, talking to investors, polling appraisers, training webinars—we put a lot of time and effort into doing that,” Smith said. “Very few of them have done that yet, so I think it’s important that they adopt to people that have been working at it the longest.”