Posted: Wednesday, April 15, 2015 on valuationreview.com
Collateral Analytics, which develops AVM models, collateral and mortgage risk tools and related products, announced that the company has developed a new tool to help define the property condition for homes across the U.S. Appraisers can use this rating system to better select sales comparables and estimate the return on investment for renovating a property.
Collateral Analytics developed historical and current property condition ratings with corresponding dates for approximately 10 million single-family homes around the U.S., and the company continues to add ratings data for more properties on a daily basis.
After working on the system for more than a year, incorporating local property data, these property ratings were standardized to coincide with Fannie Mae’s standardized C1 to C6 property condition ratings for appraisals.
The subsequent data is being utilized by Collateral Analytics as part of the company’s proprietary CA Value AVM, which selects and uses comparable properties that indicate the nearest condition to the property being valued. Additionally, the data can be used to help provide market-based factors for condition adjustments.
Collateral Analytics President and CEO Michael Sklarz said he is excited about what this “ground-breaking” technology will mean for the appraisal industry.
“First, this new data will help appraisers identify comparable properties which are of the same or similar condition to the one which they are appraising,” Sklarz told Valuation Review. “Second, it will help them with more accurate market-based valuation grid adjustments when using comparables which are of different condition than the subject property.”
Collateral Analytics currently is working on obtaining recent Collateral Underwriter (CU) reports to compare how successful the rating system is in predicting suitable comps compared with Fannie’s model.
“We are hopeful that our new technology will provide standardized condition ratings for each property,” Sklarz said.