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Paper: eres2006_153
| Paper title: | AUTOMATED VALUATION MODELS: AUTOMATION VS. HYBRID BLENDING TECHNOLOGY AND HUMAN INTERVENTION |
| Authors: | Cassens Zillioux, Victoria |
| Summary: | Automated valuation models (AVMs) are being used more frequently in all phases of lending in the United States. However, there is still a question of acceptance in the secondary market and with the GSE’s. While all agree that these products can supply an accurate valuation of a residential property, there is not agreement as to what creates problems for this technology in the market. Rating agencies fear that a lack of current data causes the model to miss the market turns (either up or down). All agree that the lack of accurate or timely data will create problems with AVM’s. If these problems are apparent in the US market where much of the information that feeds the models is readily available, how are these issues solved in countries where the data is less reliable or unavailable for model use? The appraiser’s involvement in the automated process is seen by many to address these concerns and add the subjectivity that can not be recognized by today’s modeling technology. The appraiser has specific knowledge of the area and related issues that may not be readily apparent in even the most accurate data. The lending market in the US has for years been comfortable with the appraisal process and is reluctant to rely on AVM technology. This hybrid solution may work well not just in the US but also in places where the appraiser has learned to work with the data available and rely on his expertise. Each country has its own version of data that appraisers use for valuation purposes. Model builders have been very creative in some countries such as the UK and Ireland to work with the data they have available to come up with interesting and accurate model results. Many other countries are at the experimental stages of valuation modeling with what information they have available. Can the appraisers who are most familiar with the data help in the modeling process as well? Would this proactive stance create a new product that would be available to appraisers rather than the reverse that has happened in the US where most appraisers consider the AVM a threat to their business? This combined effort may allow lenders in many countries the opportunity to use 21st century technology in the best possible way. Quite possibly, despite the availability of data in the US, we haven’t gone about this in the best way for all involved. This paper will explore the options of the combined advantages of technology and human talent and how it can best be designed and implemented in a variety of situations and used to the advantage of all involved. |
| Type: | normal paper |
| Year of publication: | 2006 |
| Keywords: | automated valuation models; AVMs |
| Series: | ERES:conference |
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| Citation: | Cassens Zillioux, Victoria (2006). AUTOMATED VALUATION MODELS: AUTOMATION VS. HYBRID BLENDING TECHNOLOGY AND HUMAN INTERVENTION . Book of Abstracts: 13th Annual European Real Estate Society Conference in Weimar, Germany, http://itc.scix.net/paper/eres2006_153 |
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