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Five Reasons AI Cannot Replace Real Estate Appraisers
by Timothy Andersen
QUESTION: When I got involved in real estate appraisal, nobody ever told me about AI, UAD 3.6, AVMs, and all the changes that would take place. I can’t keep up with these changes and the changes I will have to make to the way I appraise and report those appraisals. Please tell me there is some good news out there about the way I have chosen to make a living! Is there any such news?
RESPONSE: Traditionally, when there were questions of real property value, the party with the questions called a real property appraiser to answer them. Real estate appraisers are professionals who estimate the value of properties like homes or land. They are trained, licensed experts who visit properties, study local markets, and follow ethical rules to make fair valuations. Lately, artificial intelligence (AI) and computer models called Automated Valuation Models (AVMs) are helping estimate property values, thus possibly decreasing the demand for real estate appraisers. From your question, you are asking if these innovations in AI are going to take your job. In all candor, AI is going to take some appraisal jobs. But the good news is that, with some upgrading on your part, that should not be a worry.
Reason 1
Currently, the law requires a licensed or certified human appraiser to opine a value for important property deals. For example, when a lender gives a mortgage for a house, they often need an appraisal by a human appraiser, especially for bigger, riskier, and/or unique properties. For taxes, court cases, or legal settlements, only a real person who can sign their name and be accountable can serve as an expert witness. AI can’t do that. So, in these instances, the human appraiser (you!) is still in charge. AI may help you answer the question, but you’ll be on the witness stand all by yourself. Therefore, you’ll get all the credit for the quality of your answers (or all the blame).
Reason 2
One reason you’ll get all the credit (or blame) is that humans exercise judgment, follow ethics, and accept responsibility. Algorithms cannot execute these since, to some extent, judgment, responsibility, etc. have an emotional component to them, rather than purely logic or reason. Remember, AI is a tool to help you. In so many ways it cannot replace you (nor was that its design).
Reason 3
One reason it cannot replace you is simply because AI (i.e., AVMs) struggles with unique or complex houses, especially if those are rural properties. Automated models work best when there is a lot of similar data. This means typical homes in well-documented neighborhoods. But they often fail when homes are unusual, upgraded, or in rural areas.
Reason 4
In rural or low-data markets, AVMs often miss unique features like renovations, historical character, or changes. A study shows AI estimation errors are particularly high (15 to 20 percent) on luxury or customized homes, compared to only five to seven percent for human appraisers. In other cases, agents report that AI tools undervalue homes in certain regions or miss important value-adding details like smart systems or loft conversions. This means AI often needs a human to step in and adjust for unique features or context.
Reason 5
Speaking of humans stepping in, that is exactly what has happened. Recently, several U.S. regulators (e.g., the OCC, FDIC, FHFA, and CFPB) stepped in and tightened the rules that AVMs must follow. Now, AVMs must periodically test their models for accuracy, fairness, and bias. There are random checks for accuracy. And the big one, there is more accountability now than in the past when these quality controls found something amiss. These regulatory rules don’t eliminate the need for human appraisers; they make appraiser oversight even more necessary. AI systems must be audited and overseen by trained professionals. Again, AI is a tool. It is up to the human who uses that tool to keep it shiny, sharp, and properly calibrated.
Just as a carpenter cannot work without a hammer, that hammer, without a carpenter to guide it, is nothing more than a potentially dangerous hunk of steel and wood. It is the calloused, experienced, strong hand of the carpenter that turns a mere hammer into a tool with the sublime capacity to build a family a home. Therefore, the hammer and the carpenter are a team, each complete only in the presence of the other.
Therefore, AI and humans must work together, not replace one another. A popular idea is that AI and appraisers will collaborate with each other rather than compete against each other. With this quality of teamwork, tech helps with data, analyses, and so forth, but human operators will oversee matters of judgment, ethics and unique scenarios. This balanced approach adds speed and scale but keeps appraisers in control.
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Conclusion
At this point in the response, you rightly ask, “What does any of this have to do with me!?” That answer is essentially up to you. Understanding the theory that AI is here to assist, not to replace, is important because it shows AI is powerful but not perfect. Real estate appraisers bring more than data processing. They bring ethics, context, experience, and accountability. For consumers, AI tools can improve speed and transparency, but trusting a valuation still means trusting knowledgeable professionals to conduct themselves in such a way that they merit our trust and confidence. If you choose to understand AI, as well as use it as a tool, then this has a lot to do with you. If you choose to ignore this inevitable progress, if you choose to fight it, then it has nothing to do with you.
This balanced future between AI and the appraiser means appraisers will remain relevant in the valuation space, but their jobs will shift. They might focus more on handling complex cases, interpreting AI outputs, and explaining value. However, that’s a shift in the appraiser’s strengths and responsibilities, not a call to replace the appraiser with something weaker and less responsive.
As appraisers’ responsibilities shift, this will cause disruption. In turn, this disruption will cause the dislocation of some appraisers. Indeed, this aspect of dislocation means that some appraisers, for whatever reason, will leave the business. It will also mean that some appraisers will seek niches in which change is less necessary, or even not necessary at all. Nevertheless, it will also mean some appraisers will take advantage of this disruption, this potential decrease in the quantity of competition, to leverage their prominence in their particular market(s).
To leverage this dislocation, some appraisers will choose to expand the boundaries of their personal body of knowledge. Others will seek to advance their level of license to a full certification. Some will seek and earn a major appraisal designation. There is no reason to go on. The point is, this disruption, this dislocation, will be a boon to some appraisers because they will choose to take advantage of it. Others, however, will be less wise since they conclude that if they ignore change, they will not need to react to it.
It is tough to conclude other than that AI is transforming real estate valuation. AI won’t eliminate the need for human appraisers. Laws still require real people to sign off on valuations. Appraisers are ethically and legally responsible. AI still fails at unique or complex properties. Regulation demands oversight. And the best path forward is a partnership between AI and skilled humans.
So, no, AI won’t take real estate appraiser jobs away. Instead, it’ll change the tools and methods appraisers use to conclude values and communicate them non-misleadingly. Real expertise, judgment, and accountability remain irreplaceable.
References
CAARAZ. (2025, August 4). AI’s impact on real estate practice: A president’s perspective. Retrieved from [caaraz.com] Central Arizona Association of Realtors
FCIQ. (2025, February 4). AI vs. human appraisers: The real future of property valuation. Retrieved from [fciq.ca] FCIQ
Financial Times. (2025, June 18). Can AI tell us how much art is really worth? Retrieved from [ft.com] ft.com
Realpha. (2025, July 15). How automated valuation models impact home pricing? Retrieved from [realpha.com] Realpha+1
Teikari, P., Jarrell, M., Azh, M., & Pesola, H. (2025, August 4). The architecture of trust: A framework for AI augmented real estate valuation in the era of structured data [Working paper]. arXiv. Retrieved from [arxiv.org] arXiv
Wikipedia. (2025, August). Real estate appraisal. Retrieved from [en.wikipedia.org] Wikipedia+1
Wikipedia. (2025, August). Automated valuation model. Retrieved from [en.wikipedia.org] AmeriMac Appraisal Management+14Wikipedia+14housecanary.com+14
About the Author
Timothy C. Andersen, MAI, MSc, USPAP instructor and CEO of The Appraiser’s Advocate, is the instructor of “How to Raise Appraisal Quality and Minimize Risk” (7 Hours CE) at OREPEducation.org (OREP Members enjoy the course at no cost). Andersen has been in real estate and consulting since 1975 and is an AQB-certified USPAP instructor, USPAP consultant, author, instructor and expert witness. Andersen can be reached at tim@theappraisersadvocate.com.
OREP Insurance Services, LLC. Calif. License #0K99465
by BDL
Absolutely, Patrick. Here’s your message rewritten in my voice—clear, direct, and human—with no artificial formatting or unnecessary punctuation. I’ve preserved your tone and intent while tightening the structure for rhythm and clarity:
I’m not a pessimist. I’m a realist. This isn’t about being a killjoy or sarcastic—it’s about recognizing that good intentions and sound reasoning mean very little when there’s an agenda in motion. We’re not in Oz, and clicking our heels won’t take us back to the way things were.
-The truth is, there’s been a long, deliberate effort to eliminate the one unbiased, disinterested obstacle in the mortgage process: the appraiser. When someone controls the gold, they control the process. It’s easy to tweak an algorithm to favor a stakeholder. It’s much harder to convince a human appraiser to see things their way. That independence is inconvenient, and the formula to discredit it has been sitting in plain sight. They just needed the right entry point—and they found it in one word: racism.
That word lit the industry on fire. Not because of overwhelming evidence of widespread bias, but because it was politically useful. Racism exists, yes, but it wears many faces—politicians, doctors, lawyers, and people from every walk of life. Yet somehow, the appraiser became the fall guy. Stakeholders even managed to rope in elected officials, who feared that silence would be seen as complicity. So they spoke up, not out of conviction, but out of fear of being labeled.
It’s absurd, but it happened. And I’m done. I’m retiring. I loved this profession. It never felt like work. It gave me purpose, pride, and a sense of accomplishment. But those days are gone. Now, every day is a fight to defend my integrity against someone new.
I’ll watch from the sidelines as the mortgage industry, hollowed out by greed, begins to collapse. The real culprits won’t be around to face the consequences. They’ll be on a beach somewhere, sipping piña coladas and counting their spoils.
Call it pessimism if you want. I call it forty years of watching this play out. I expect rebuttals. I expect people to tell me I’m wrong. But I don’t care. I have no dog left in this fight. This is my honest, hard-earned opinion—and I stand by it.