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Special Reports
Appraisals/AVMS
Elliott Creates Automated Combo AVM/Appraisal Product
By Joshua Brustein
GREENSBORO, NC-Elliott & Co. Appraisers has recently developed a way to offer
automated appraisals via a gap product where every case is examined by two automated valuation models and a licensed
appraiser.
The new product aims to satisfy needs for second-opinion appraisals, portfolio
evaluation and screening, nonperforming asset evaluation, pre-funding follow-ups, fraud detection, and to serve
as a supplemental appraisal review data source. It is not intended to compete with traditional appraisals on loans
that will be sold into the secondary market.
Charlie Elliott, the company's president and chief executive officer, said that
the move is being taken in part to position the company for a future when AVMs may become the norm. He noted that
the secondary market has been steadily warming up to AVMs. Now, though, his company is attempting to retain customers
who still want something more akin to a full appraisal.
The Elliott offering includes two independent AVM assessments, which are then
examined by an appraiser certified in the state where the property is located.
"Given the fact that there is some skepticism about automated products and
all, we didn't want to leave people to think that maybe the AVM, for whatever reason, might not be as sufficient
as they hope," said Mr. Elliott. "So with two, we have much better chance of providing them with a good
quality job, and still do it economically and quick."
Quickness, of course, has been a main draw of AVMs. But the Elliott system, by
offering a state-certified appraiser's nod, has sacrificed some speed. The company will rely on its base of 2,000
appraisers nationwide to assist in implementing the new product.
Elliott guarantees that appraisals will be ready in 48 hours, significantly longer
than a pure AVM. Mr. Elliott notes, though, that as the company begins to get more comfortable with the process,
the time will probably come down.
But Elliott's solution will never be the market's fastest.
"We're still dealing with people who have more than one thing to do that
day, so it will take a little time," said Mr. Elliot, who added he saw the human touch, and not raw speed,
as the product's biggest selling point.
"If we didn't do that," he said, of keeping flesh-and-bone appraisers
involved in the process, "we might as well be selling AVMs."
The company has teamed up with FNC Appraisal Management System to help with the
automated appraisal. FNC, the Oxford, Miss.-based company whose system is used by many appraisal companies, said
that much of its business is in gap products. Several companies use models similar to Elliott's.
Elliott's existing customer base of 5,000 will be the initial target of the automated
appraisals. While he has no quantitative volume goals, Mr. Elliott said that he expects the new product to be a
"material part" of the company's business within one to two years.
Meanwhile, in Grand Rapids, Mich., Great Lakes Appraisal Co., which values both
commercial and residential real estate, has launched an interactive appraisal report on CD-ROM. According to Michael
Cerny, a commercial analyst with the company, Great Lakes provides three copies of the CD with each report, one
for the borrower and two for the lender.
Currently, the company is using this product specifically to ease the storage
burden of its commercial lending customers, but says it can also provide the digital reports to residential lenders,
for whom it already provides reports in PDF format.
The company is using off-the-shelf software to format the CD-ROMs.
Rick Grant contributed to this report.
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