Communications of the ACM
OK, Computer: How Much Is My House Worth?
Federal regulators' proposal to ease real-estate appraisal requirements could give computer algorithm-based valuations an opening to replace appraisers.
Credit: kathymontesrealestate.com
Federal regulators' proposal to ease real-estate appraisal requirements so most U.S. homes can be bought and sold without assessment by a licensed appraiser could give computer algorithm-based valuations an opening to replace appraisers.
Issues concerning opponents to using these algorithms include the lack of regulation surrounding computerized valuations, and a dearth of quality control standards despite a mandate for them under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
Jeremy Sicklick, CEO of automated property valuation company HouseCanary, said substituting computers for appraisers will accelerate home sales by weeks, lower costs for buyers, and remove human bias and error from mortgage collateral valuation.
However, other appraisers believe an automated strategy is unsuitable for home purchases, because an appraisal that is off by a few percent could leave the homeowner owing more than their home is worth, or lenders with insufficient collateral to cover delinquent loans.
From The Wall Street Journal
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