Open Standards Consortium for Real Estate

Matt Marschall, managing director, national practice leader agribusiness valuation services --capital markets group for Cushman & Wakefield, says the new standard is significant because it will cut costs, reduce the time it takes to get information and, "for the first time, provide real consistency and transparency in the data we rely on." Marschall has served as the chair of OSCRE's Appraisal Reporting Standard working group.

Real estate practitioners have often said "appraisal is an art, not a science." Now, for the first time since property valuation began, technology is about to change that axiom: it's providing access to data and tools so real estate professionals can analyze data more extensively than ever before. Just as importantly, it's gradually providing it in a standardized format.

John Cirincione and Sam Bacharach, executive director of the Wayland, MA-based Open Geospatial Consortium Inc., an industry consortium supporting interoperable solutions that "geo-enable" the Web, wireless and location-based services and mainstream IT, describes real estate as one of the "last digital frontiers." In a paper Bacharach co-authored with John Cirincione, owner of Property Appraisal Corp. in Hudson, OH, he says the industry has failed to "take advantage of the standardization of data and online services that has revolutionized business operations in other sectors of the economy."

"Technology has already revolutionized the way real estate information is retrieved, analyzed, transmitted, reported, and stored. But few would debate the massive costs, time lost and reduced productivity that result from users manually re-entering data several times into various applications," he states.

But Bacharach says things are finally changing. There's little argument about the potential benefits of industry standards, including decreased operational costs, increased employee and workplace productivity, improved accuracy, more open exchange of information, increased flexibility, reduced risk and more real-time transactions.

"Data Standards specify the names, formats, and properties that will be used in a given system," Bacharach says. "If I call my land a 'lot' and another person calls their land a 'ranch,' it is difficult for a computer to understand it. A data model might reconcile this by making the 'parcel' the word that describes the physical extent of the land you own and then add an attribute called 'use type' and one of those types could be 'ranch.'

"But without a formal agreement--think standard--that defines the information used in real estate transactions any sharing of information requires a great deal of human interaction to be understood. By creating a standard that 'negotiation' is done ahead of time and more importantly just once instead of each company having to coordinate with every other company with which they want to share information, it becomes faster, easier and cheaper to share. This leads to more sharing," Bacharach concludes.

According to Patrick Craig, chair of the business innovation committee for Cushman & Wakefield, standardization "creates a new value proposition" for valuation firms and their clients. "For valuation firms, we now have the ability to transmit our appraisal report data to the client with speed and accuracy. Previously, this was not even possible. Also, we can validate the data against the data standard to make sure it is compliant."

John Hall, chief credit officer for Prudential Mortgage Capital's structured finance group, says the technology will enable the firm to stream data and eliminate manual re-entry. "Historically the appraisal information was used only once in a single transaction and we would have to fill out a form manually with 15 to 20 data points. Now, we can move hundreds of data points from the appraisal report into our forms or even store it in our database to help source new transactions or monitor existing deals in our portfolio."

Bacharach predicts the step to file sharing, which is what OSCRE demonstrated last week, "is the first step towards what will become a web-based service where the data files may never be moved completely."

"A user will query for exactly the information they need, at the time they need it, and get an answer," he explains. "That way, the originator of the data retains it and is also assured that the data have not been corrupted since they passed a file on. In file transfers, the information starts to age the second it is separated from the data base and written to the file."

"In the service model, the data is always fresh. When I use my Garmin Nuvi to get directions I am using data that were separated from the database months ago," Bacharach says. "When I use Google Maps on my mobile phone, I am using data that were separated from the database weeks or perhaps days ago."

Instant Insights /

Data Standards: As Technology Grows, So Does the NeedFor a Common Language

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