Lender Processing Services announced a new valuation model for Lenders that brings listing and pending-sale data into the AVM equation. The mortgage and real estate services provider has struck an agreement with the National Association of REALTORS to productize MLS data derrived from the REALTOR Property Resource (RPR) to create derivitive products for Lenders. In this case, LPS is offering a product called the LPS REALTOR Valuation Model or (RVM)
According to the release, LPS plans to leverage this information to expand the reach of traditional automated valuations. In a quote, Rober Walker, managing director, valuations for LPS Applied Analytics told media sources that “By factoring listings and pending sales (from the mls) in the report, it becomes easier to better understand the external factors impacting the value of a specific property.”
LPS said the model correctly predicted the selling price of a property 72% of the time in sa sampling of sales in Maricopa County, AZ. By combining MLS data with tax data, the accuracy of valuations improves greatly. By comparison, Zillow is only predicting home values within 5% of the actual selling price 20% of the time, according to their website.
This is great news for RPR, who has staked a significant interest in the notion that MLS data has significant value in guiding the financial industry with better data that will allow Mortgage Banks the opportunity to make better, and faster decisions in operating their business to the benefit of consumers and the banks alike. If banks can make faster decisions, agents will be able to sell properties more quickly – solving a major problem that exists in todays transactions.
WAV Group released a paper in February of this year that compared and contrasted the offerings of RPR, First American, and MOVE – all three companies who have constructs for licensing MLS data. You can download it here. But as you will recall, the paper points out that RPR licenses the data in exchange for a business tool that allows REALTORS to extend detaled analytics and reports to their customers. First American licenses the data for cash per listing. MOVE licenses the data in excange for the ability to use it on REALTOR.com.
To be clear, RPR and others to not share the listing data with the mortgage companies or even LPS – this is a marketing relationship whereby LPS offers the RVM as a reseller to the mortgage industry.. The license agreements with MLSs prohibit the use of the detailed listing data, and RPR may not share the data with any third party like LPS according to their License Agreements with MLS.
Here is the full press release
LPS Applied Analytics Announces Realtor Valuation Model
JACKSONVILLE, Fla. October 26, 2010 Lender Processing Services, Inc. (NYSE:LPS), a leading provider of integrated technology and services to the mortgage and real estate industries, today announced the release of the Realtor Valuation Model (RVM) from its LPS Applied Analytics division. The LPS RVM is the only automated valuation model (AVM) with duly licensed multiple listing services (MLS) data drawn from the Realtors Property Resource™ (RPR).
The RPR is a parcel-centric information database launched by the National Association of REALTORS® (NAR), covering all of the more than 147 million property parcels in the country as a resource for NAR members. By leveraging this information for the development of the RVM, LPS Applied Analytics expands the reach of traditional automated valuation, bringing listing and pending sale data into the equation.
“With the introduction of the LPS RVM, users now have housing supply information at their fingertips,” explained Robert Walker, Managing Director, Valuations, for LPS Applied Analytics. “By factoring listings and pending sales in the report, it becomes easier to better understand the external factors impacting the value of a specific property.”
In testing, the LPS RVM has proven extraordinarily accurate when compared with other comparative AVMs. In a sampling of Maricopa County, Ariz. (Phoenix) properties, for example, the LPS RVM correctly predicted the selling price of a property 72 percent of the time. According to Walker, this high accuracy is the direct result of the addition of MLS data fully licensed by RPR.
“Think of the LPS RVM as adding the market knowledge of a Realtor,” Walker added. “Imagine how difficult it would be for a Realtor to accurately price a property without access to MLS data. Many times the listing value defines the upper end of value for a particular property. Knowing the current listing information is a big advantage in terms of valuation accuracy for the LPS RVM.”
About Lender Processing Services