On-Line Appraisal Is Simply Market Data

In response to the article on on-line appraisals (“Should Lenders Opt for On-Line Appraisals?” Sept. 4), the technology is not new, just the packaging. As a real estate appraiser, I can gather the same information, and more, in minutes, to get an idea of a probable price range of what a specific home may be worth. Is this an appraisal? Hardly. It is simply market data, and from this the valuation process begins.

Many factors at and around a specific property decide where in a price range the value of the property may fall, or if it is worth even less or more than preliminary research may have indicated. Remodeling, special features or upgrades, quality of construction, deferred maintenance, earthquake damage, infestation, environmental hazards and proximity to traffic noise and other nuisances are just a few factors that an appraiser must observe, in person, to begin to pin down the value of a specific property.

To arrive at a specific value from market data alone, which is what the new system does, is at best a disservice to many homeowners who may be turned down for mortgage loans because they didn’t quite fall in the proper place on a computers generated graph or analysis. At worst it is a dangerous tool by which many loans will be granted without thorough, independent analysis.

JOHN T. ASHWORTH

Marina del Rey

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The utilization of on-line appraisal services to determine market value will have dire consequences well beyond that experienced during savings and loan crises of the 1980s. No amount of electronic data can tell a lender the condition of the property.

As an appraiser with over 10 year’s experience with FHA as well as conventional lenders, I can assure you that numerous problems will result from using on-line appraisal services.

Nothing illustrates the dilemma better than a property I recently appraised. The owner of that property believed that the property was worth $450,000. The comparable property suggested a value of $400,000. I appraised the property for $290,000. Public records incorrectly reported that the property was 200 square feet larger than it turned out to be.

Besides, that same property was in substantially inferior condition when compared to the surrounding properties. These factors as well as others resulted in a much lower value than would be suggested by a data service appraisal. Is a $300 appraisal fee too much to pay to prevent a mistaken overestimation of $110,000? I think not.

CLIVE FINCHAMP

La Verne