From this morning’s Boston Herald:
Appraisers have resented AVMs for years, in part because the computer estimates have cut into appraisal companies’ business.
But the industry also challenges AVMs’ accuracy – especially in today’s market, where prices in some locales are falling rapidly.
And now, some firms claim a key industry player is even stealing data out of human-produced appraisal reports.
Critics say AppraisalPort.com – which appraisers use to electronically ship reports to banks – is extracting information and reselling it to AVM users.
To add insult to injury, appraisers say they must pay AppraisalPort parent FNC Inc. $5 every time they use the site to send reports to lenders.
“We are paying, (but) they are stripping out our work product without paying us a dime,” said Patrick Turner, a Richmond, Va., appraiser.
FNC spokesman Angela Atkins admits that her company extracts property-description data from appraisal reports.
But she said the firm can legally do so, and doesn’t take proprietary narrative analyses or valuation estimates.
She said FNC is building a national property-data repository for its customer base, which mostly consists of major U.S. mortgage companies.
“We are not an AVM company, and we could not exist without appraisers,” Atkins said.
But appraisers claim that what they include in reports – a home’s square footage, number of rooms, etc. – is proprietary information that goes way beyond public records.
For example, Turner said one appraisal he recently did showed a house had 2,900 square feet of above-ground space and a 1,200-square-foot, newly renovated basement.
By contrast, public records listed the home’s size at 1,100 square feet.
“Imagine the difference in (appraised value) between a 1,100-square-foot house and a 2,900-square-foot house,” the appraiser said. (AVMs) can’t be accurate when the public records they are relying on are out of date or wrong. That’s why everybody wants to strip out our data – it’s valuable because it’s accurate and current. But they don’t want to pay us for it.”
Technorati Tags: disintermediation, real estate, real estate marketing
Beth Larsen says:
Great article…interesting to see AVMs from the appraiser’s point of view, and to see that Realtors? aren’t the only ones to have others trying to benefit from their work product OR to be feeling negative effects from AVMs.
January 21, 2007 — 3:39 pm
Cochise says:
Boycott!!!!!!!!
January 21, 2007 — 10:18 pm
Danilo Bogdanovic says:
I personally think that, whether it’s legal or not, companies such as FNC should have made it very clear from the beginning that their information will get used by third parties.
And sure sounds like a legal battle is brewing.
January 22, 2007 — 9:24 pm