With the introduction of the property data collection (PDC) program by Fannie Mae and Freddie Mac, people without appraisal licenses or certifications can now perform site visits to collect information. This has raised much concern in the appraisal profession, so we wanted to address these concerns. To provide some clarity, we’re looking at the myths about PDC and clearing them up.
Myth #1: PDC is the same thing as property appraisal
As a professional appraiser, you know very well that what a property data collector does is not the same as what you do — even if your clients don’t always understand the difference. While there is some overlap, being qualified to perform an appraisal requires much more training, education, and expertise, and the job goes far beyond gathering physical data.
A property data collector’s job is very observational and fact-based. They visit a property in person and collect many standardized data points and photographs – things like what building materials are used, floor plan information, and the utilities connected to the property. While this type of physical data gathering does overlap somewhat with the on-site property visit performed by an appraiser, it represents only a fraction of the appraisal process.
An appraisal, on the other hand, is much more analytical and far more detailed, taking into account property upgrades, market conditions, and numerous other factors. An appraiser’s job is to develop and report a professional, unbiased opinion of value based on their observations of the property as well as their understanding of buyer’s preferences and expert analysis of the local real estate market.
Myth #2: Data collectors are going to replace appraisers
There’s a lot of buzz right now about PDC possibly replacing traditional property appraisal, but the intent of this service is to fill a gap in the lending process. The job assignments given to property data collectors are often the types of assignments that wouldn’t come across an appraiser’s desk. For example, property data collectors (PDCs) may be engaged by lenders for very low-risk loans where an appraisal is not required.
Additionally, property data reports may be used for hybrid appraisals, in which a data collector will gather the data that will then be used by a licensed or certified appraiser to develop an opinion of market value. Tax assessors and real estate companies may work with PDCs when they need very general, fact-based data as opposed to a professional valuation opinion that only a highly skilled appraiser can provide.
Myth #3: PDCs are not properly trained or qualified
Unlike the appraisal profession, there is no professional license or certification needed to perform a PDC. This has led some to think that data collectors won’t have the necessary level of knowledge and expertise, which could lead to inaccurate or unreliable property information.
While there isn’t a license, PDCs are still required to be trained and competent to do their job. Both Fannie Mae and Freddie Mac require that PDCs must be professionally trained and vetted. They must adhere to Fannie Mae or Freddie Mac’s property data standards which set forth the minimum requirements for collection of the subject property data.
Individuals who complete McKissock’s Property Data Collection course will receive the high-quality education needed to do the job well and provide accurate, reliable data in compliance with the most recent PDC User Guide requirements.1
Myth #4: PDC is bad for appraisers
Probably the most prevalent myth is that PDC is bad for appraisers and bad for the profession in general. But in actuality, it may offer some significant upsides for appraisers. In particular, becoming a property data collector may be beneficial for:
Appraisal trainees in need of extra income
Busy appraisers who are looking to delegate tasks
Older appraisers who are looking to reduce physically demanding tasks or may be transitioning into retirement
Any appraisers wanting to grow their bifurcated and hybrid appraisal services
It is well known that much of the appraisal profession is aging and retiring, and there is a need for new blood in the profession. But it can be a difficult profession for young appraisers to break into. PDC may help solve this problem by helping them get their “foot in the door” and providing the opportunity for practical work experience. While it doesn’t count toward their experience requirements, it can help trainees gain confidence to go on-site to properties, take pictures, and get the foundational knowledge in place to succeed as an appraiser.
Grow your hybrid, desktop, and bifurcated appraisal services
Furthermore, if you are interested in expanding your hybrid, bifurcated, and desktop appraisal services, now is a great time to do so. The demand for these services may increase significantly as PDC continues to grow.
Learn everything you need to know when it comes to accepting and completing hybrid, bifurcated, and desktop appraisal assignments. Enroll in our CE course, Best Practices for Completing Bifurcated and Hybrid Appraisals.
Resources:1. property-data-collection-user-guide.pdf (freddiemac.com)
