Summit Valuations, LLC, a full service valuation company, has released a new whitepaper on its website in which it describes the rationale behind a new real estate valuation product the company has developed. The Summit Validation Report (SVR) is a product built on the trusted foundation of the Broker Price Opinion (BPO) but with additional layers of real estate data and analytics reviewed by a valuation professional to create a new tool for use in quickly and affordably analyzing real estate portfolios.
"Tracking the property values for real estate held in a portfolio has never been more important," Summit Valuations President Ron Ahlensdorf Jr. said in the company’s press release. "We're seeing a wide variation in home price appreciation across the country as the market works through its recovery. Some markets, previously weighed down by a glut of distressed properties are now recovering quickly, so quickly in some cases that experts warn of localized bubbles.
In other areas, where the effects of the downturn were not as severe, real estate is appreciating slowly but steadily. There are always localities in which property values, for any number of reasons, are decreasing in value," Ahlensdorf added.
Existing valuation products either do not provide enough data to tell portfolio managers what's really happening in a market or are too expensive to apply to an entire portfolio of properties. Many valuation tools designed to be applied to entire portfolios have little or no human review. Summit's SVR product was designed to fill that niche.
"In particular, investors in portfolios of properties destined to be ‘fixed and flipped’ or ‘rehabbed for rent‘ find BPOs to provide less information than they would ultimately like to see," Ahlensdorf said. "There are other markets, such as home equity and hard money lending, where players would embrace a low cost property valuation report if it did not have the shortcomings of the traditional BPO."
The new hybrid product was created after Summit management realized the company was fielding an increasing number of requests for a valuation tool that, while still more affordable than a full appraisal, provides more transparency into the methods by which the opinion of value is derived so that management can have a higher level of confidence in the result. The whitepaper outlines the product's specifications and intended use cases.