Notes

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 won't require them to appraise the properties in future and will become the "final value determining factor" for just about any property. This thing has become more active to some extent, nonetheless it hasn't replaced appraisers. Alternative Valuation Products or AVPs in short have been achieving this from quite sometime. But it doesn't mean that AVPs may replace appraisers down the road. According to The Appraisal Foundation folks, this is of an AVP is really as follows:

"AVP is really a product that communicates an impression of value or price other than the original 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 when 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 absolutely no specific form or format for BPOs - several were built and tweaked in line with the requirements of users over the course of years.

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

get more info or AVMs: To a big extent, the credit of this worst nightmare about which we talked above in this article goes to AVMs. The reason being AVMs make use of several mathematical formulas and data for calculating the worthiness. Although many appraisers retain negative feelings about AVMs, still the simple truth is they have been making their mark in the valuation marketplace from the steady pace because of their accuracy. The only downside of AVMs is they rely largely on data and in a few circumstances data may necessitate filtering by an appraiser.
What type of clients use AVPs?

For clearly understanding that what type of clients use AVPs you should first understand where AVPs are not allowed. Beneath the Title XI of FIRREA, all federal transactions and real-estate related transactions (transactions such as sale, lease, renting or refinancing of real property) should be conducted after a USPAP-compliant appraisal. So AVPs are not requested in such transactions. AVPs are usually requested by loan servicers, government-sponsored enterprises and hedge-fund companies. Sometimes they're also utilized by potential homebuyers, insurance firms and marketing agencies.

Why do clients use AVPs rather than appraisal?

If said in one line then due to the fact it saves time and money. But there may also be various 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". According to The Appraisal Foundation, no product or format can always 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 a properly conducted appraisal by professional appraisers may be the "gold standard." But yeah, in a few certain circumstances we may see the increased usage of AVPs in future instead of appraisal.

This article was compiled by Ashish Bhatnagar for increasing awareness about AVPs in appraisers. http://www.ieimpact.com is really a company that provides appraisal data entry for appraisers. You can learn more about their appraisal data entry services at http://www.ieimpact.com/appraisal-data-entry/.
Here's my website: https://thegadgetflow.com/user/charleschappell778