Many appraisers are spending their time worrying about how and when AVMs will replace their services but few actually understand how AVMs are being used today. I hope this article will debunk some commonly held beliefs and shed light on how AVMs are being used today. It will also take you inside the review process to show you how to create reports that will keep you out of trouble (and out of jail).
AVMs: Myth & Reality
Myth 1: AVMs are replacing appraisals in a majority of transactions.
The available facts simply do not agree with this premise. Currently, only the two big GSEs (Fannie and Freddie) even attempt this. Desktop Underwriter and Loan Prospector are the only two programs with this component. Remember that these two giants combined account for only about 25 percent of all loans purchased on the secondary market. In addition, both involve appraisers in the process- either to provide an inspection of the subject property or to add an appraisal into the mix.