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This is the case for AVM Zillow, according to the
Arizona Board of Appraisal. The Board issued two cease and
desist letters to Zillow asserting that the company is not qualified
to perform appraisals in Arizona. “Arizona law provides that all
appraisals are to be done by a licensed or certified appraiser,”
said Deb Pearson, Executive Director of the Arizona Board of
Appraisal. “The Board determined that 'Zestimates' are not actual
appraisals.”
The story
Copyright Appraiser Takes on AVMs,
profiles the latest efforts of Tim Vining, MAI, the appraiser who
brought the first appraisal copyright infringement suit (and
collected). In a complaint filed with his home state of Washington
and with several federal agencies, Vining tackles two issues: can
AVMs lawfully produce opinions of value in states, such as
Washington, where such activity requires licensing? And is the “data
stripping” of confidential consumer information that is contained in
appraisal reports, by AVMs, banks and others, in violation of the
Federal Financial Privacy Act Gramm-Leach-Bliley (GLB), when that
information is shared with unintended users?
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Agreeing to Disagree
“Right on to Tim Vining! Please let him
know hard-working appraisers support
him.”
- Eve Simpson
As you might expect, reasonable and informed appraisers disagree on
the
subject of AVMs. Some believe they are
unfair competition.
Others believe
appraisers are their own worst enemy.
“AVMs are not the problem,” said Patrick
M. O’Conner, ASA. “The
problem is that
most real estate appraisers are unwilling
to retrain
themselves to add new skills in basic computerized valuation
modeling. Appraisers need to offer AVMs as part of
their services.
Regulation was the
accepted answer after the (Savings and
Loan) bust
of the 1980s. It did not work
then and will not work now.”
Vining feels there are larger issues at
stake, however. “Appraisers
have a duty
(both legally and morally) to provide an impartial
opinion of market value. Forming
an opinion that is both responsible
and USPAP-compliant is a labor-intensive
effort. It takes time to
measure a structure, inspect the structure from the foundation to
the roof and inside from room to room. It takes time to conduct
market research- not just pulling sales out of the MLS. A real
estate appraiser needs to constantly research the market- talking
with buyers and sellers, as well as agents. Keeping tabs on the
local economy, keeping current on supply and demand and the list
goes on. If appraisers are truly professionals, then the public has
a right to our best efforts.”
Additional Content
You will find an important Pennsylvania case that decided that state
law supersedes federal law in non-federally-related transactions,
posted at
www.workingre.com. Look for “Fidelity National Information
Solutions, Inc., v. George D. Sinclair.” You will also find Vining’s
complaint, the cease and desist orders issued to Zillow by the
Arizona Board, and a consumer-protection-related complaint brought
by the National Community Reinvestment Coalition (NCRC) against
Zillow. The list of 32 “mandatory” states is also posted at
www.workingre.com.
Read the full story on AVMs in the upcoming issue of Working RE.
Subscribe here.
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