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ยป VISIT US ONLINE @ DSNEWS.COM 19 IS THE FUTURE OF VALUATIONS BIFURCATED? As new technologies and access to unprecedented amounts of data continue to bring innovation and change into every segment of our economy, it would be naive to think the valuations industry would be immune to this global sea of change. So the question arises: What is the state of the valuations industry, and what does the future look like? While the industry primarily relies on traditional products like AVMs, BPOs, and the tried and true Fannie format appraisal form products, we are seeing the use of hybrid products become more prominent. ese hybrids are being used to piece together information in new ways and typically compile multiple elements from different valuation types and merge them into one report, thus creating a report that more accurately reflects the specific information requested on a particular file. In addition to simply refiguring information into new reports, further advancements are being explored through the use of bifurcated products. Bifurcated products represent not only a segmentation of current products but also a change in how this information is gathered and processed. ese latest innovations are largely the result of the organic growth of an industry that 1) has access to an unprecedented amount and breadth of data, 2) a progressive GSE attitude, and 3) a strong desire for continued evolution in an effort to make accessibility to homeownership as painless and straightforward as possible. With the introduction of their UCDP Portal and robust data collections processes, GSEs have been leading the charge in new ways to increase the accuracy, speed, and cost efficiency of valuations. is move has encouraged private organizations to get creative as well, and bifurcation currently looks to be the most promising of these experiments. Bifurcation by definition represents a divergence from the current standard. Not only is the information on the report different, as in a hybrid product, but it is gathered and processed in a new way. Current bifurcation products lean move heavily on an in-office valuation specialist who will receive a raw data report and combine it with additional resources including public data, MLS feeds, and other accumulated data. is confluence of information will then be used to validate the information provided from the field and produce a final product. Because no two properties are ever exactly alike, there is still a critical role to be played by a field expert. It has yet to be established, but in-field expertise may come from agents, appraisers, home inspectors, or perhaps even a person with an entirely new job title. Each of these professions has its strong points, and only through trial and error will we find out which is best suited to deliver a report that is more accurate, less expensive, and faster to the consumer. Regardless of title, we can be sure this individual will have obtained some type of license or certification. Fannie and Freddie will undoubtedly have a significant role to play in the standardization and oversight of any new valuation procedures as the new landscape develops over time. Pilot programs are currently being carried out by GSEs, lenders, and AMCs across the country to determine the best way forward. For bifurcated products to prove themselves as an effective path forward, we need to analyze their results and compare them to established products that have served the industry for decades. While there is a tendency to assume that data analysis will lead to new insights, we must be diligent in ensuring the expertise that only comes from human analysis is not lost in the process. Only when the power of data is combined with experience and intuition of field experts, will we arrive at a superior product for the end consumer. Rida A. Sharaf is SVP of USRES Operations. Sharaf oversees the daily operations as well as corporate strategic planning concerning USRES' real estate operational endeavors. Sharaf specializes in all-encompassing disposition solutions along with component service offerings, which include valuation services and risk mitigation products, with a specified emphasis on risk analysis and management as well as ROI maximization. Sponsored Content