Is Artificial Intelligence (AI) affecting the Real Estate Appraisal market? Are Real Property Valuations more accurate from AI or from a licensed Certified General Appraiser? How will technology alter the demand for experienced Real Property Appraisers? These are some of the questions we will attempt to answer in this article.
With real estate marketing websites like Zillow, Trulia, Realtor.com, and others, the entire landscape for real estate transactions has changed. To say that technology, online databases, and virtual storage of information have not changed how we conduct business would be short sided. Many people, especially Millenials and tech savvy individuals will use the Internet for at least some part of a real estate transaction, such as finding real property, conducting a search of recent real estate transactions, finding nearby schools, determining utility costs, and more.
However, to say that a professional consultant is not a necessary part of conducting real property transactions would be short sided. In most situations, real estate property transactions start at $100,000, and in California, they typically start at $500,000. Think of realtors, property appraisers, real estate lawyers, etc., as insurance against a bad deal. There are numerous things to navigate in a financial transaction of this magnitude, including property liens, transfer of deed, taxes, liability, and much more.
Certified General Appraiser Requirements In California
To become a Certified General Appraiser in California requires a minimum of 3,000 hours of experience in no fewer than 30 months. 1,500 of those hours must be in non-residential experience. It also requires 300 hours of qualifying education courses and a Bachelor’s degree or higher. On top of that, the State of California requires that you pass a specific test.
Artificial Intelligence (AI) Requirements In California
What are the requirements for Artificial Intelligence (AI) to provide real estate transaction advice in California? The answer is none. There are two primary reasons for this. First, this technology is recent and there are very few laws related to obtaining information from the Internet. Second, at the end of the day the liability for the transaction resides with the person who signs for it. AI does not sign documents, you do. Technology is not ultimately responsible for ownership of real property, you are.
AI and Technology Affects Real Property Transactions
There has been an exponential increase in Real Estate Technology investments from $221 million in 2012 to $2.665 billion in 2016. Technology will change how real estate transactions are conducted. Many websites provide easy access to information such as property valuations and properties available for purchase. The fundamental question is related to the accuracy and thoroughness of this information. Zillow has been named in a lawsuit in which it was alleged that Zillow undervalued a specific property which caused harm to the plaintiff. At the end of the day, technology is just a combination of hardware, programming, and data. Modern technology is great at storing and processing vast amounts of data. Technology, however, does not understand the emotional elements of any transaction. Also, technology is only as good as its developers. They may not have any experience in real estate transactions. There are numerous nuances related to property transactions of this magnitude. What details are important? Which are not? Who is ultimately liable for not being properly informed?
When you go in front of a judge in a court situation, you are often warned against representing yourself. If you lose the case, you have no recourse. You are ultimately responsible for your own fate. Real estate transactions are similar. When you sign on the bottom line for real property, you are ultimately responsible for it. If you have not done your homework, and if you have not sought advice from experienced professionals, such as a Certified General Appraiser, you have little to no recourse should you find an issue later. Experienced professional consultants are like an insurance policy against bad financial transactions. Do your homework. Protect yourself and talk to an experienced professional before you take ownership of real estate property.