San Nicolas is General Counsel and Sr. Corporate Strategist for Bluebook International, Inc., a leading provider of residential replacement cost data and solutions for the insurance, mortgage and appraisal industries.

Buzz: Tell me a little bit about Bluebook International and what it has to offer appraisers.

San Nicolas: Bluebook has been providing residential replacement and reconstruction cost data to the insurance and construction industries since 1964. The engine behind the cost calculations we provide in our on-line tool is the result of decades of experience analyzing actual repair and replacement cost construction estimates from the insurance industry. So we know what it really takes to replace or repair a residence. With the changes in the URAR, we recognized that there was a significant need for an easy, accurate, and inexpensive estimated replacement cost tool in the appraisal space that fast, so we developed InsureBASE ERC and The AARCA Report. Both reports are automated and available on line and via XML.

Buzz: You mention the URAR. How have the changes in the URAR brought the need for InsureBASE to light?

San Nicolas: When Fannie Mae announced that it would no longer require the cost approach, appraisers reacted by being reticent to perform it at all, and lenders looked for an alternative solution to the cost approach. With the new URAR certifications, appraisers were uncomfortable providing the cost approach analysis. Over the next few months many origination lenders got word from secondary market participants that they would not purchase loans that did not contain the cost approach analysis. Origination lenders then had no choice but to require their appraisers to perform the analysis. At the end of the day, appraisers are faced with the daunting task of trying to provide accurate structural replacement cost information to the lender/client or risk significant liability.

Buzz: What are some of the URAR challenges that Bluebook can help appraisers deal with?

San Nicolas: Well, appraisers face several challenges. First, there has been a lack of accurate, easy to use resources for determining a realistic cost to replace new and depreciated calculations available to the appraiser, especially in thriving markets. Additionally, it can not be ignored that the end result of the cost approach must be consistent with what the comparison approach reveals or the loan simply won’t get funded. With the new URAR certifications, the appraiser has to worry about who is going to rely on the appraisal and what his liability could be with each completed assignment. These combined challenges places the typical appraiser in the position of having to either spend an inordinate (albeit unrealistic) amount of time properly performing a cost approach analysis, or, simply “wing it” by backing into the analysis. This is not to say that all appraisers “wing it” in every case, as in some situations the cost approach is performed properly. However, appraisers can spend hours calculating the same figures that InsureBASE calculates within minutes. With InsureBASE, we offer the appraiser a user friendly tool to do it right in a fraction of the time.

Buzz: What is InsureBASE all about, and how does it work?

San Nicolas: We have two on line, on demand automated reports that appraisers are using to make their life easier in the performance of their obligations to their lender/clients, InsureBASE ERC and InsureBASE AARCA. InsureBASE ERC is an automated estimated replacement cost report that provides a detailed analysis of the cost to rebuild a residential structure, trade specific depreciation, a confidence score and a detailed breakdown of the property characteristics. The AARCA report, or Appraiser Assisted Residential Cost Analysis report is similar to the ERC Report, except it also breaks out all the structural calculations required in the URAR cost approach, making it the easiest and fastest cost approach tool available. Appraisers actually helped create AARCA, so we’re very excited about the product.

Buzz: AARCA sounds great. Tell me more about AARCA and the Appraiser Assisted Residential Cost Analysis.

San Nicolas: AARCA was designed by appraisers, for appraisers. Basically we asked appraisers and their instructors to tell us exactly what they wanted in the product. We took their advice back to our engineers and created the InsureBASE AARCA prototype. The final product was again reviewed by the appraisers, we implemented their suggestions and now offer the tool live. Basically, with AARCA, all the appraiser has to do is type in the subject property address, double check the per-populated property information, and review the property characteristics of the house, make any necessary changes, adjust for age, condition and quality on every major house attribute and press FINISH. In minutes the resulting report breaks everything out the appraiser needs (except site value and as is site improvements of course) to complete the URAR cost approach. Basically, appraisers don’t have to “wing it” anymore!

Buzz: How can appraisers get more information about this product?

San Nicolas: Either go to www.bluebook.net to review product information, download a product review or order a free trial of InsureBASE. You can also call toll free at 1-888-425-8326.