Sharing Company Data
When data lives in disconnected silos, its full potential is limited. That is why FarmlandFinder partnered with AgWare, Inc. to create an integration that makes it easy to download sales data from FarmlandFinder into AgWare's DataLog software. This integration allows appraisers and other valuation professionals to use AgWare's advanced allocation and reporting tools without the need to re-key basic sale data points.
Q&A: The Future of the Appraisal Industry
Q: What is the purpose of appraisals?
A: Appraisals are a major component of the U.S. financial system. Property loans are made using real estate as security, and the risk associated with the transaction is based on the market value of that asset. The financial lending requirements for an appraisal exist to "protect the public trust" and help ensure the financial stability of the economy.
Q: What challenges do rural appraisers face?
A: Rural appraisers expend a large amount of time and effort on collecting and analyzing sales data. Access to various public data has always existed. However, the time and cost required to access rural property data is slower and more expensive than users expect in our internet connected world. Most users of valuation services lose sight of the underlying reason appraisals are required. Appraisals are not an expensive nuisance, they are needed to protect the lending institutions and ensure the financial backing required to remain financially solvent. Technology changes have improved some portions of the process; however, data collection and analysis are time consuming. This is especially prevalent in rural markets with limited sales. The industry is currently under pressure to reduce the time it takes to complete an appraisal while lowering the cost. Many industries have gone through a similar change and the challenge is always the same. How do you reduce time and cost without reducing product quality?
Q: What is the mission of appraisers?
A: The overarching goal of The Appraisal Foundation and the Uniform Standards for Professional Appraisal Practice (USPAP)is to protect the public trust – which is the reason appraisers are required to follow rigorous standards. Some users believe "accuracy" is the goal. Very high degrees of appraisal accuracy require a significant quantity of current sales with economic and physical similarities to each subject. Some regions have very low sales volumes with widely varying characteristics, and to assume the same degree of accuracy is possible in those markets compared to a residential neighborhood is misplaced.
Q: How have you seen the industry change overtime?
A: Many seasoned appraisers began by counting dots on maps to calculate acreages and visiting the county courthouses to read recorded documents and collect sales data. Most counties have progressed to electronic records and even though they may be in differing formats, sales are generally available online. Then soil maps came online where the user can sketch boundaries and retrieve or generate soils maps in areaswhere soils are a major factor within the market. Later, FEMA flood maps also become available online. Now there are tools like FarmlandFinder where much of this information can be accessed on one website.
Q: What does the future of the appraisal industry hold?
A: The appraisal world will continue to bifurcate into non-complex versus complex properties. There is future in both. But valuation services users should not expect that "one size fits all". If properties are smaller, relatively homogeneous, then "faster and cheaper" valuations may be possible and can be highly efficient because of available data. However, there are property types with more complexity where a less expensive appraisal may not be possible. As complexity increases the sales analysis requires more time and expertise and the data is much harder to acquire. Users of appraisal services should not expect a 100,000-acre ranch appraisal to cost the same as a residential or commercial property in urban environments.
Q: Where does AgWare fit in the future of the appraisal industry?
A: AgWare works across the rural appraisal industry to help establish a common set of tools to make rural appraisers more efficient. Residential appraisers typically provide an appraisal on a common set of forms defined by Fannie May and Freddie Mac. Because the rural market is more diverse and dispersed no single standard exists. AgWare works to ensure that our customers have software that helps keep them compliant with USPAP while following procedures that are standard for a given property type. Because of the wide range of rural property types across the country, our software must give each appraiser flexibility to solve their specific appraisal problems, while still allowing them to share data with other appraiser. We work closely with the ASFMRA, lending institutions, and our customers to continually improve our software to comply with new requirements and take advantage of new efficiencies. Recently AgWare has introduced a new product named Maven to help address markets where better data is available and there is pressure to produce a more automated report.
Q: What is Maven?
A: Maven is a Model Assisted Valuation for AgWare's Enterprise DataLog users. AVMs have been readily adopted in urban environments, that same process rarely works in rural markets due to limited sales with commensurate characteristics. In ClickForms, AgWare has a self-imposed restriction on what the software automatically calculates. Any decision or opinion that is the appraiser’s will not be automatically filled in. In contrast, Maven will use a model to compute everything including the final opinion of value and let the valuator verify and either approve or change the valuation. Any changes must be addressed as part of the working file and documentation process to maintain review integrity.
Q: What is the biggest value you see for appraisers using FarmlandFinder?
A: FarmlandFinder gives valuers access to layers of different data points and public data that can jumpstart their sales collection and analysis. FarmlandFinder consolidates a substantial amount of data at one location.
"Collecting and analyzing sales data is the most expensive part of the rural appraisal process. That's why we're partnering with FarmlandFinder - so that these professionals have easier access to the data they need."
–Mark Elder, AgWare
About AgWare: AgWare provides rural appraisers a complete software suite consisting of several separate but integrated products: DataLog, ClickForms and Maven.
Credit: Interview with MarkElder, AgWare'sPrincipal Developer