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If it was easy, everyone would do it.

About five years ago AVT started providing some of the major pieces required for appraisers to utilize regression analysis. We have produced a fantastic regression program, produced webinars which introduced regression, and produced the best regression training material on the market. This program and training material are offered at a very reasonable price. We are about to come out with this year’s version of the All-in-One CD. The regression Plus and the Fusion applications have been greatly enhanced. I will be speaking on regression analysis at the Appraisal Institute Connect conference this year in July.

One of the issues confronting the industry is a lack of good regression analysis training seminars. Again in 2012, the Appraisal Institute turned down my request to provide them with a seminar on regression. While the AI is a very good education provider, they are not the only good provider. AVT is about to enter into an agreement to provide statistical seminar material to a major appraisal education provider. This will fill a huge void and may be the single most important catalyst to moving the neighborhood appraiser into statistical analysis this year. Watch the web site for more information on where and when these seminars will be offered.

Over the past year I have had two articles published in the Appraisal Journal. One is on market delineation and the other is on market interactions. These articles can be found in the “Activities/Articles” section of the website. The article on market delineation will help regression users understand where to search for sales.

This blog introduces the new forum which has been set up to discuss the software applications and address any questions on analysis. Also, I have begun a project called “Analyzing the Analysis”. This project consists of a proposed series of reference workbooks that discuss the pros and cons of valuation analysis techniques. I will be presenting some of the work I have done at the AI Connect convention this year. Over the years, I have received more questions from appraisers on analysis methods than anything else. Frankly, I have been quite surprised by what I have learned about the various old and new analysis techniques appraisers utilize in their work.



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Long and Winding Road………

The Long and Winding Road…

Many lenders who rely heavily on AVMs and BPOs have stated, “AVMs and BPOs have improved significantly over the past five years, but appraisals (more specifically appraisers) have not evolved during that same time period.” From the lender’s standpoint AVMs and BPOs make a lot of economic sense. But, is their statement correct? I would say, yes and no.

Individual appraisers are not rewarded for going the extra mile, it is in fact the opposite. Appraisers are more often than not reprimanded by lenders when they attempt to evolve and improve their work. First, they are not paid for any “extra” work; so their first reward for evolution is to make less money per hour. Second, the lender is required to review the appraisal, so new techniques by the appraiser means the reviewer has to understand and take time to review these new techniques. The bottom line is that these same lenders who criticize appraisals for not evolving are the very force that retards appraisal evolution and promotes the status quo. Appraisers have been slowly learning more about statistical techniques, and a lot about market cycles. I expect that this will translate into more reliable and more useful appraisals in the near future.

I personally believe that about 25% of appraisers are movers and shakers and would like to elevate their game. This number may seem low, but you have to consider that over half of the profession is above 50 years old. In addition, appraisal fees have been too low for appraisers to invest any time in “research & development”. This means that guys like me are relied on to provide new automated products. A third problem is that none of the appraisal associations are fostering an environment for appraisal evolution to occur at a pace that is rapid enough. For example, while the Appraisal Institute is still the prominent appraisal organization in terms of advancing new technics and methods for valuing properties, they have turned down all of my attempts to work with them to promote regression analysis. Their reasoning is that I would be promoting my own appraisal product, the Regression Plus. The fact is that I created the Regression Plus because no one else was working on a regression product that would enable appraisers to move in that direction. It is like we are all trapped in a 15 foot pit and I gathered some tree limbs and constructed a ladder (as no one else was doing it). However, when I produced it for us to be able to climb out of the pit, those in charge said that we cannot use my ladder as I would be promoting my own product. So, here we continue to sit trapped in this pit while I have a ladder in my lap. Now, keep in mind that while I am critical of the AI in this situation, I am a member (MAI and SRA) and a promoter of this association. I encourage all of you to join and earn a designation as well.

This leads Automated Valuation Technologies, Inc. (AVT) to it continued goal of elevating the appraisal profession in terms of new valuation techniques and methods via automated tools. These tools have to be automated so that they are efficient, enabling a better value opinion in the same amount of time as traditional appraisals. AVT maintains that having the best regression related products possible is the main goal. However, because the phrase, “build it and they will come” has not proven to be true AVT is now trying to identify and market directly to the 25% percent of appraisers identified above. So, look for more advertisements and marketing. The first stop in marketing is the site. We have introduced a new media for explaining what our products are. This medial is the Xtranormal platform which allows us to use a cartoon format to present the product information. It is very engaging, but still a cartoon, which may not appeal to everyone. Take a few minutes and watch these presentations called “Frequently Asked Questions”. In addition we have opened out forums to a public format. We hope to make this the premiere forum for discussing regression and other statistical methods.

The 2013 product editions will be ready some time before the end of the year. There are some significant updates:

All of the products have been updated to run on Windows 8. They now require version 4.0 of Microsoft’s DotNetFramework where they required version 3.5 to be loaded before.
The Regression Plus:
An automated system for scrubbing data has been built in. No matter how good and fast you are at scrubbing data with Excel you will now be able to scrub the data several times faster.
Many statistical outputs have been added; standard errors, confidence intervals, Variation inflation factors, and more.
The Fusion:
A qualitative sales adjustment grid has been added.
i. Comp selection is aided by the Fusion identifying the most recent sales, closest sales, most similar sales, and the sales that sold at a price consistent with the market model.

Improved mapping features have been added.
Improved narrative margin controls have been added.
The USL has been updated to meet the 2012-2013 USPAP.

As always I appreciate your patronage to AVT and I commend your dedication to self-improvement.



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