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Will Home Appraisals Be Replaced by Technology?
Monday, July 31, 2017

The automation of jobs is not a new subject by any means. When it comes to robots taking over, the future of work, employment, and economy has always been a discussion. But while self-driving vehicles are in the current limelight, there’s another technological advancement that may hit the real estate market in an unexpected way: automated appraisers.

Major advances in data and computing have led to systems which can automate this highly knowledge-based position. Recently, Freddie Mac announced that it would begin to allow automated valuations for a number of refinancing loans which will, in turn, decrease the number of appraisals requested. And if less appraisals are needed, less appraisers will be needed as well. However, not all will be lost right away. In most cases, there’s no replacement for genuine human knowledge.

Many of the computer models in use now can only give ballpark estimates when it comes to appraisals, but the technology is only getting better as time goes by. For example, Zillow’s Zestimate tool uses algorithms, machine learning, public records, MLS data, and broker/user information to calculate increasingly accurate estimates. The more data the tool collects, the more it learns. Because its focus relies heavily on public data, the tool is unable to know or understand the little details of a property. However, with the increasing power of technology, it’s safe to say that these appraisal robots just might figure those out as well. And the industry will have to adapt.

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