DTN Executive Editor Marcia Taylor reported last week that, “Online ag real estate websites like AccuAcre.com, AcreValue.com and WhatsMyFarmWorth.com are making headway with farmland valuations, but they are not yet perfect replacements for human appraisers. I tried to make that point in a recent article on these ‘Zillow-like’ websites for agriculture (‘Ag’s Real Estate Robots Gain Ground,’ https://www.dtnpf.com/…). At the moment, what the sites do best is accumulate other types of real estate information, such as soil types, historic yields, comparable sales, field boundaries and who owns the land. As one economist pointed out, they might reduce your chance of buying a lemon.
“But Dennis Reyman, an accredited appraiser in Storm Lake, Iowa, cautions not to be too quick to dismiss the expertise of human appraisers.
“‘These websites are not terribly different than the databases that appraisers already use, except that a good appraiser has verified sale data which has been analyzed and adjusted for various factors,’ Reyman says. ‘These robotic programs can give folks enough info to be dangerous. It’s not uncommon to see these programs produce values which are off of actual results by as much as 20-30%. Try telling someone their farm is worth $7,000 when the computer says $9,000. Since its human nature to want to believe the best financial news, that can be a challenging conversation.'”
The DTN article also noted that, “Another problem which is hard for computers to differentiate are nuances which can affect land values significantly, Reyman adds. ‘Since land rarely trades hands, it takes a long view of sales history and neighborhood influences to understand these things. The human appraiser not only uses his eyes but also his ears to know how recent economics might be affecting demand in the neighborhood. Are we in a neighborhood where 100-year family dynasties make the market? Are we in a neighborhood where recent livestock losses will remove some potential bidders, or are most of the livestock feeders more than able to keep moving along with it? I don’t think the computers are that good yet. It can be challenging enough for the astute human.'”
Ms. Taylor concluded her DTN article by indicating that, “There’s a wealth of information at your fingertips with these new ag real estate websites. But given the unpredictability of land markets, they shouldn’t affect human appraisers’ job security any time soon.”
