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November 18, 2000

Take the Online Appraisal LeapMichael C. SchaferUnited Software Systems, Mornet, FannieMae, EDI
The demand for the electronic exchange of appraisal information is moving fast into the age of
the Internet. While some appraisers will face this new frontier with unhurried skepticism, savvy
appraisers will take advantage of this new market opportunity.
Years ago, the exchange of information between appraisers and lenders occurred by mail. This
was a leisurely two-week cycle. The introduction of overnight delivery dropped the delivery time
to days, but increased the cost substantially. Then came the modem and dial-up transmission,
which was replaced quickly with the speed and efficiency of the Internet. Appraisers now have
the ability to deliver completed appraisal reports in minutes. Once again, appraisers are on the
verge of an industry-wide paradigm shift, and those who choose to remain loyal to old business
practices may soon be out of business.
Today, EDI (Electronic Data Interchange) is the one of the most talked about subjects in both the
mortgage lending and appraisal industries. EDI is essentially a simple procedure where all of the
components of an appraisal report are placed into an "electronic envelope" and transmitted to the
lender via the Internet.
Let's compare and contrast the traditional appraisal process with the EDI appraisal process.
1) On a clipboard, collect and write all the information to produce the report
2) Search for comparables
3) Record the relevant data on comparable properties
4) Take the measurements of the structure
5) Snap photos and hope you remember to match the address with the picture
6) Drop the photos off for processing
7) Drive back to the office and begin assimilating all the information
8) Retype the information from the clipboard onto your PC
9) Print it out
10) Find the map
11) Make a copy
12) Stick the little tabs on the subject and comps
13) Draw the sketch
14) Produce the invoice
15) Make copies
16) Drive back to the photo center, pay for the photos, and buy more film
17) Stop by the supply store for more paper; and return to the office
18) Sort the pictures, paste them on to the proper pages, and let the glue dry
19) Collate the pages
20) Sign all of the copies.
21) Package them up and address the envelope
22) Call the courier, or if you are up against a tight deadline, drive across town to the lender
23) Return to the office, label the negatives, and find room in the bulging cabinets to file
away another report
That is a lot of work for a single $200-300 report, and prices are going down or remaining the
Now, let's compare the laborious 23-step old process with what it can be using new online
appraisal technology.
1) We still do the fieldwork: note the information on the newly developed hand-held PC
2) Take photos with a digital camera storing images on the computer, a disc, or a mini
CD-ROM for easy reuse
3) Measure the property
4) Photograph the comps
5) Snap more photos, instantly knowing whether the shot was good because the image
appears on the camera
6) Return to the office
7) Upload the notes directly into the appraisal report
8) Upload the photos to the photo page
9) Draw the sketch
10) Download the location maps, and edit the final document
11) Finally, open your E-mail, drag and drop the report to the lender, and click on "Send
In less time than it takes to get to your car, your lender has the report! Your report is
automatically archived on your PC for easy storage and future access.
Online appraisals significantly cut the cost and time required to produce an appraisal. This
increases the number of appraisals an appraiser can perform per day, as well as the profit on
each. Internal expenses are reduced or completely eliminated: no more film and processing,
couriers or postage costs, and mileage and gasoline expenses, use of the copiers, file cabinets,
and maps are reduced.
Appraisers who embrace online appraisal technology will soon be sought after by lenders. In an
effort to reduce loan closing time, Fannie Mae recently introduced an interface that enables
mortgage lenders to order online appraisals through its MornetPlus network.
Take the online appraisal technology leap today and you will increase your speed and profits.
Michael Schafer is President of United Software Systems Incorporated, a Tempe, Arizona-based
provider of appraisal software for the appraisal industry. He can be contacted at (480) 449-2600
(ext. 190).