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ChatGPT: Valuable Tool or a Replacement for Real Estate Appraisers?
by Dustin Harris, The Appraiser Coach
As artificial intelligence (AI) and machine learning (ML) continues to advance, it has found its way into various industries—including the appraisal world. ChatGPT, a powerful AI language model developed by OpenAI, has been making an impact on the world and in the valuation profession as well. While some may question whether AI is a threat or help to appraisers, its potential applications in the appraisal field are vast.
Elon Musk once tweeted, “AI is a significantly higher risk than nuclear weapons…” and, unchecked, he could be right. However, the truth of whether it is a help or hurt to appraisers probably lies somewhere in the middle. In this article, we’ll explore how appraisers can effectively use ChatGPT to enhance their work, from writing narratives to market analysis.
ChatGPT: A Game-Changer for Appraisal Work
For those who have embraced it, ChatGPT has been transforming multiple aspects of appraisal work, such as:
• Creating lists
• Writing emails and messages to current and potential clients
• Crafting blogs
• Strategizing networking and relationship development
• Writing presentations for ‘lunch and learn’ events with real estate agents
• Crafting the perfect apology letter when you upset a key loan officer in your small town
• Identifying key visionary goals for the company
• Analyzing P/Ls and identifying areas to cut spending
• Creating business plans
• Developing ideas for growth
• Writing procedures
• Organizing schedules for maximum efficiency
• Writing narrative
• Market analysis
• Market-specific information
• Descriptions of adjustments
To effectively work with AI, such as ChatGPT, and get the results needed for your appraisal work, follow these steps:
Choose the right prompt: This is the real key to getting the results you want. Select the appropriate prompt from a list of sample prompts based on the task you want to accomplish. For instance, if you’re working on the narrative of the appraisal report, try using a prompt such as, “Provide a concise introduction for the appraisal report, including an overview of the subject property, its location, and the purpose of the appraisal.” Another example for writing a narrative could be, “Explain the methodology used in the appraisal, including data collection, analysis, and the valuation approach.”
Input the prompt: Enter the chosen prompt into the ChatGPT interface, along with any specific details related to your subject property or market area. This will help the AI generate a more tailored response. The more information you can give it, the better success you will have.
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Evaluate the generated response: Review the AI-generated content to ensure accuracy, relevance, and clarity. The AI might provide a good foundation, but it’s essential to double-check the information and edit as necessary to fit your specific appraisal report.
Iterate and refine: If the generated content isn’t satisfactory or requires additional information, rephrase or modify the prompt to get a better response. You can also provide feedback to the AI, guiding it to produce more accurate or relevant information. Sometimes, you have to talk to ChatGPT like you would a 5th grader to ensure clarity and understanding. For example, I often find myself saying things such as, “Remove the reference to the commercial property a half mile away and make the whole thing more conversational in tone.”
Apply the AI-generated content: Once you have the desired response, incorporate the content into your appraisal report, ensuring it meets industry standards and follows appropriate USPAP, Fannie Mae, and state guidelines.
Repeat the process: Use the AI with different prompts to address various sections of the appraisal report, market analysis, terminology, and research. Over time, you’ll become more adept at using AI to efficiently generate useful content for your appraisal work.
Save and reuse templates: As you find prompts that yield helpful results, save them as templates for future use. For example, “Use this format to write a similar narrative for the following property.” This will save time and make your interactions with the AI more efficient.
The Future of Appraisal with AI
AI, like ChatGPT, won’t replace appraisers (at least in the near future) but can serve as a valuable tool to enhance their work. Learn to see it for what it is—a tool! By embracing AI technology and learning how to use it effectively, appraisers can improve their efficiency, streamline their processes, and provide more accurate and comprehensive reports.
That does not mean we should not be aware of the potential costs to appraiser jobs that AI might have in the future. Technology is changing the world and is getting better and better at repetitive tasks. In a recent interview with Geoffrey Hinton, widely known as “the Godfather of Artificial Intelligence,” it was said, “I think it is going to make jobs different. People are going to be doing more of the creative end and less of the routine end.” For the ‘form fillers’ out there, there will likely come a time when your ‘work’ could be replaced. Time to get creative. If you cannot readily answer the question, “What makes my valuation work different from my competitor’s?” you may want to start thinking about making some changes.
It’s important to remember that AI is not a perfect technology, but it is ever-evolving, and as we learn to work with it more effectively, its potential applications and benefits will only continue to grow. Remember, AI is a tool to support your work, and you remain ultimately responsible for the content and quality of the appraisal report. It is still your signature. By utilizing AI as a powerful resource, appraisers can stay ahead of the curve in an ever-evolving industry. As ChatGPT and similar technologies continue to advance, their capabilities will only become more refined, making them an increasingly indispensable tool for appraisers who wish to excel in their field.
About the Author
Dustin Harris is a successful, self-employed, residential real estate appraiser. He has been appraising for over two decades and recently sold his appraisal business, Appraisal Precision and Consulting Group, Inc., and is now the Director of Appraiser Education for True Footage, LLC. He is a popular author, speaker and consultant who owns and operates The Appraiser Coach. He personally advises and mentors other appraisers to run successful appraisal companies and increase their net worth. Connect with Dustin at theappraisercoach.com.
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