To reduce the stress and time for real estate to be appraised and a value generated computer-based algorithms have been introduced. These systems make it easier for people who want to sell their homes go through the process quicker.
What this means is that more homes will now be sold every year due to the simplified process. In the US, the average price of homes falls around $400,000 as seen in the U.S. census data. The proposal for this new computer-based system indicated that about $68 billion would have been added to the revenue recorded in the real estate sector from the sale of homes if this computer based appraisal system had been introduced earlier.
However, the mortgage providers have indicated that they may still prefer the old system which requires the use of human appraisers to determine the value of homes. These groups pointed out that there is no regulation to guide the computer-based real estate appraisal system. The major reservations about the new system are due to the lack of response from the authorities when asked the plans to establish a mode of regulation for the new appraisal process for properties.
Over the years, the process of buying home loans requires a real estate appraisal which represents a confirmation of the property’s value. With the use of appraisals, investors can trust the quoted value of a property as represented in the proposal. However, the high costs of using human real estate appraisers and the time it takes to get the reports have been a problem.
On the other hand, the introduction of the computer-based real estate appraisal system will create the opportunity for more tech companies. The involvement of innovative technology such as artificial intelligence and computer algorithms require expertise and constant management to ensure the systems deliver the needed value. There will also be a reduction in human error and the time it takes to sell homes will be remarkably shorter.
The computer-based real estate appraisals will be done based on similar properties which have been sold recently while modifying the results through special innovative technology. It is coming at a time when human appraisers are being blamed for the issues encountered in the real estate sector regarding the sale of homes.
Overall, it is apparent that the advantages of the computer-based real estate appraisal system have made them more acceptable. There will be many lost jobs in the appraisal profession. The experts in this industry have already indicated a decline in the available jobs since the housing crisis began in the U.S. In some states, some lenders have removed the criteria for appraisals to be presented in a bid to make the process easier and quicker. In these cases, the lenders simply ask for collateral.
The decline in the activities of human appraisals raised concerns in the market previously because stakeholders still relied on their services. While some companies may be willing to pay the high costs charged by human appraisers, the use of computers for this process will remarkably lower the costs homeowners have to pay, and the outcome from property sales can be sufficient to pay off debts and have some extra money.
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