The occurrence of “multiple versions of the truth” - by Shaun Fitzgerald

Fitzgerald Appraisals" width="144" height="180" /> Shaun Fitzgerald, Fitzgerald Appraisals

What does it mean to “take a listing?” An appraiser friend was once taken aback when I said I was doing a listing on a single family residence. You act as a broker(?) was the question. Today the term “listing” means obtaining a brokerage agreement – usually an exclusive right to sell. Years ago, it meant going to a property to physically list and measure the characteristics of the property. In those days, brokers were not likely to obtain an exclusive right to sell. Each was competing silently against each other to find the prospective buyer; each had done their own “listing.” There were very few For Sale signs on peoples’ lawns, and there were certainly no MLS systems to communicate to other agents what the details of the “listing” were.

Today, not only does the term “listing” mean something else, the act of “taking a listing” is becoming rare. An increasingly lower number of agents actually document the characteristics of the property - and significantly fewer actually “measure” the property to be appraised. Instead, many of the physical characteristics are obtained from the online Property Record Card (PRC) provided by the assessors. That is, a computer program within the MLS system downloads the description from the online PRC directly into the “listing.” The agent is responsible for verifying the information, but often does not; the online PRC has become pretty much the gospel truth. Fortunately, the assessor data is fairly accurate much of the time. But when it is wrong, it ends up wrong in the assessor’s database as well as the MLS database. If the data ends up wrong in the MLS database, it will surely end up wrong in the multiple databases owned by companies like Zillow, Trulia, Homes.com, and the Realtor RPR system.

Now, there are computerized functions within appraisal software that will download into the appraisal report the data in one or more of these databases. An unwitting appraiser who takes this information at face value is now preparing a report that will update computer databases in the Fannie Mae and Freddy Mac systems and multiple other data collection systems. And at any point, the data becomes available to Google, Bing and Yahoo. Now we have all sorts of system that can be cross-referenced to “verify” that the information is correct. Some folks may find it hard to believe, but the “verified data” triggers a computer to require a review appraiser or an underwriter to question the appraiser who actually took the time to physically list and measure the property. And the consequence of that is that an increasingly greater number of appraisers would rather rely on data in a computer that might be wrong than to buck the system. A question from the review appraiser is only going to slow down the process and reduce the time available for an appraiser in the field. And when I say “in the field,” I mean someone who actually leaves the office to do the assignment.

In the early days of computer database software, the designers of the systems were trying to minimize the occurrence of “multiple versions of the truth.” That is to say that they were concerned that when your address changed in one part of an integrated business system, your address changed in every part of the system. I fear that those system designers would be so frustrated to know how much inaccurate information is floating out there in the cloud. Their new fear might be labeled “multiple versions of the verifiably untrue.”

Shaun Fitzgerald is the owner of Fitzgerald Appraisals, Easton, Mass.