A question we all need to ask ourselves is, will the new form be a form or something else?
A context is in order.
- Why were the old forms like they were?
- What has changed?
- How will the new forms adapt to the change?
It made sense for any form to fit on a regular sheet of paper. We have seen a progression from the “back of a napkin” valuation done by the loan officer, to an 8 ½ by 11” sheet, to the 8 ½ by 14” sheet we have used for so many years. Overtime, we went from 2 pages, to addendums, to supplemental forms, all the same size.
Current paper forms serve several purposes.
- First, the forms (like the FannieMae form 1004) assist in organizing the data collection – both the subject and comps. They provide a focal point by identifying the subject and its key features. It is natural to then search for comparables based on your judgment of what’s important.For residential, usually this is the house size, the neighborhood, and other features. Since you only need three comps, you only need to search six or eight – just in case your ‘best’ ones don’t pan out. The forms were nicely designed for collecting data from public records, multiple listing books, and ways to verify or confirm that a sale had actually closed.
- Second, the form helps you focus on these key features of comparison and it helps you identify what else may be important.
- Then, if you need to do any further data gathering to refine what you know, it can help guide your confirming/verifying phone calls. In the past, this was critical to verify that the property had actually been sold, closed, and the sale completed.
- Next, the form helps match the subject features against comparable features in an organized manner. The form clearly sets out the differences in these key features and organized our thinking about adjustments to be made. Conveniently, the form also provides a place for entering the adjustment. In the past, adjustments were based on the appraiser’s experience and organized in a table (cheat sheet) of “reasonable” amounts or ratios. Appraisers were trained to adjust the adjustments for newer/better properties or older dilapidated properties. Consistency was important and useful.
- Finally, the form provides a consistent way of delivering and communicating the work. The report can be hand carried or mailed to the client.
Then . . . change happened.
We had electronic data. It arrived immediately, not in a quarterly “sold” book. The public records were confirmed the next day. Houses and neighborhoods came more homogeneous. FHA ‘points’ adjustments went away. We were using forms software.
We did not have to fill out the form by hand to then hand it to the typist to type. We had copiers, overlays, and even a form that showed up on our DOS computer screen. An added bonus, color choice – yellow type on black, or green type on black background. It was wonderful.
Before we know it, we were “gooey”. We were able to receive the form on the screen. The GUI made the computer form look just like the paper form. It was even more wonderful.
But, it got even better! Forms software. You could fill in the form right on the screen! One company became even more advanced. “Left hand entry” they called it. You did not have to move your eyes box to box. You typed each field on the left. But alas, left hand entry – good for the appraiser – was not good for the customer, who was used to the form looking like the form. Government regulations required certain documentation and reviewers needed the consistency.
One form fits all. What now?
Simple. A ‘screen’ form that works well for research and analysis may be different from a screen form to communicate to a reviewer, an underwriter or investor. We have high-resolution, large-size, multiple-screen workstations. The hardware is different and enables a much better human brain to machine interface. This has all changed.
A form screen that is good for a client/user/decision maker may be quite different from the ‘data entry’ form of the appraiser. This is the big essence of the next set of “appraisal forms.” They may not even look like forms in the future.
In future articles, we may look at these “different sides of the form.” It is to be brain-machine interface at each level. Different interfaces for different users. It is inevitable. We will look at how the appraiser may prepare for this future. It is in development now. It is coming.