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AVPs: The Cost-Effective Alternative of Appraisal
Over the course of last few years the worst nightmare of many Real Estate Appraisers is that they are being replaced by way of a "black box" that will not require them to appraise the properties in future and will act as the "final value determining factor" for any property. This thing has come to life to some extent, but it hasn't replaced appraisers. Alternative Valuation Products or AVPs in short have been achieving this from quite sometime. But it doesn't imply that AVPs may replace appraisers in the future. In line with the Appraisal Foundation of US, this is of an AVP is as follows:

"AVP is a product that communicates an impression of value or price apart from the traditional appraisal."
Now let's learn a little more about these AVPs:

What are some typically common examples of AVPs?

Given below are some typically common examples of AVPs:

Broker Price Opinions or BPOs: Next time once you hear BPO in virtually any property related talks, don't misunderstand it as Business Process Outsourcing. Broker Price Opinions will be the mostly used AVPs today. There is no specific form or format for BPOs - several were built and tweaked according to the requirements of users over the course of years.

Comparative Market Analysis or CMAs: Very similar to BPOs, CMA is really a product that was found in a similar fashion but by the agents. However in modern times its usage has expanded. Pending sales and active listings may also be used in addition to closed sales for assisting homebuyers and lenders in CMAs. And just like BPOs, there's no universally utilized form or format for CMAs too.

Automated Valuation Models or AVMs: To a big extent, the credit of this worst nightmare about which we talked above on this page goes to AVMs. Lovelywholesale Reviews Plus Size is because AVMs take advantage of several mathematical formulas and data for calculating the worthiness. Although some appraisers retain negative feelings about AVMs, still the truth is they have been making their mark in the valuation marketplace from the steady pace due to their accuracy. get more info of AVMs is they rely largely on data and in a few circumstances data may require filtering by an appraiser.
What sort of clients use AVPs?

For clearly knowing that what sort of clients use AVPs you should first understand w here AVPs aren't allowed. Beneath the Title XI of FIRREA, all federal transactions and real-estate related transactions (transactions which include sale, lease, renting or refinancing of real property) should be conducted following a USPAP-compliant appraisal. So AVPs are not requested such transactions. AVPs are usually requested by loan servicers, government-sponsored enterprises and hedge-fund companies. Sometimes they're also used by potential homebuyers, insurance companies and marketing agencies.

Why do clients use AVPs instead of appraisal?

If said in a single line then mainly because it saves money and time. But there may also be some other reasons too in specific cases (i.e. for analyzing additional analytical values).

Are AVPs USPAP-compliant?

The short and dirty response to this is "Maybe". Based on the Appraisal Foundation, no product or format can continually be USPAP-compliant. Different valuation techniques ought to be used for different circumstances.

So can AVPs replace appraisals in the foreseeable future?

In short, the answer is "No." The Appraisal Foundation still believes that a properly conducted appraisal by professional appraisers may be the "gold standard." But yeah, in some certain circumstances we might see the increased usage of AVPs in future instead of appraisal.

This article was written by Ashish Bhatnagar for increasing awareness about AVPs in appraisers. http://www.ieimpact.com is a company that provides appraisal data entry for appraisers. It is possible to learn more about their appraisal data entry services at http://www.ieimpact.com/appraisal-data-entry/.
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