Still Sifting

Started revising a presentation I did in November regarding photographs and psychology. That effort produced the post from yesterday, but it also raised further questions about the property resource issues and even the direction MLS evolution is headed (at an excruciatingly slow pace--more on that aspect later).

I think we'd all agree that the Public has access to a great deal more real estate data than they did, say, 10 years ago. 25 years ago they had ready access to very little data--brokers and agents had access to very little data. Despite increases in the availability and amount of data, there remain many attributes that are not among the existing datasets. Do those attributes make a contribution to value, at least to some Buyers when looking at some houses? Seems a safe assumption, particularly for qualitative, non-linear and otherwise difficult to quantify variables.

So, the property resource RVM application produces a valuation figure that doesn't take those attributes into consideration. That raises some interesting questions about marketing, winners, losers and respect for wisdom among any and all of the stakeholders.

Lets suppose a house has some very nice attributes that produce outstanding emotional appeal among a large percentage of those viewing it. It's probable that the MLS dataset, and even the property resource dataset, don't capture all, or at least a majority of those special attributes. After all, MLS and property resource datasets are a "one size fits all" solution. Same dataset for the property resource all over the US.

It seems likely that the RVM figure for that house has a good chance of being low. Now that sort of occurrence happens all the time with "zestified figures" and no one pays much attention. This is the official property resource, though, WITH MLS data. Will Sellers and Buyers and Agents and Appraisers just blow it off?

If they do, what's the point in creating it? It's another "zestification" of reality and little more.
If they don't blow it off, Sellers of very nice properties with value cues beyond the dataset will leave some money behind at close of escrow---if they can sell at all.

Lets consider the reverse situation. A house that just doesn't quite get it together. It looks OK from the dataset perspective, but it's just a little tired, with an immediate neighborhood that's sketchy, subpar landscaping, slightly quirky floor plan, etc. etc. The property resource RVM figure may be on the high side.
So, does the Seller price the house below the RVM figure and use that in marketing. Maybe price at the RVM figure and hope some Buyer doesn't notice?

Again, do the Sellers, Buyers, Agents and Appraisers blow it off or take the RVM figure seriously? If they take it seriously are they willing to experience the consequences (and explain them to the members of the Public they represent)? The Seller might luck into a nice deal if a Buyer would pay the RVM figure, but where does that leave the Buyer? Where does that leave the Appraiser? Go with the RVM (AVM in that case) figure and move on, OR perform a scratch appraisal with careful attention to adjustments?

The underlying issue involves the credibility of an application that bases value on a subset of the attributes considered by the Public in evaluating prospective future homes. Ultimately, the RVM disrespects Buyers, Sellers, Agents and Appraisers who do their research, gather their information, analyze it in the process of arriving at a valuation that closely matches the real world figure based on market value. Will everyone go to all that trouble? Of course not, and even fewer will after the RVM comes into wide use. Clicking a button is intoxicating!

The property resource may well be another one of the fast, cheap and out of control advances in technology based more on Trojan Horse psychology than on member service. Did someone mention the Public??