Appraisers, Keep Apprised: Software Does What You Do

Watch out, appraisers. If life hasn’t been hard enough during the recent housing slump, technology is starting to encroach on your turf.

A few companies are now selling software designed to estimate home values based on comparable sales in the area, with no inspection by an appraiser.

Experian Inc. of Orange was one of the first to start marketing the software, Value Point. It allows users to dial into property databases gleaned from county records.

It’s now starting to catch on with banks and thrifts that are making small home loans or home equity loans, or checking the accuracy of appraisals in their loan portfolios, according to Doug Gray, director of Experian’s mortgage lending industry sales.

But using the software in place of home inspection can be pretty risky, said appraiser Margaret Manaster of Irvine.

“The information in the database can be wrong and that can affect value,” Manaster said. For instance, houses with four bedrooms can be accidentally listed with the county as two bedrooms and lot sizes can be entered incorrectly, she said. Moreover, some houses are just in much better or worse shape than the others in the neighborhood.

Gray said the program works better in some older tract neighborhoods, such as areas in Orange, Anaheim and Santa Ana, where houses are similar. “They all sell within a tight band of price,” Gray said. He acknowledges that few lenders are going to take the risk and make a $500,000 home loan based only on a computer-generated report. “We really don’t see this as replacing appraisers, but rather as a productivity tool,” he said.

One that he expects to be used in 50% to 70% of all real estate transactions over the next decade.

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Melinda Fulmer covers real estate for The Times. She can be reached at (714) 966-7832 and at melinda.fulmer@latimes.com