Property Valuation Using Credit Score Indicators

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Solution Overview

Problem

Existing valuation methods, such as automated valuation models, lack the ability to determine a property's condition accurately without a complete inspection, which is crucial as structures age and become more variable in value compared to similar structures.

Innovation Solution

A computer system that uses a database to obtain credit scores for property owners and determine an ownership responsibility indicator, which correlates with the property's condition to assign a more accurate value range or specific value, incorporating previous owners' credit scores and comparable properties' data.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Productivity

If automated valuation models are used, then valuation speed is improved, but measurement precision deteriorates because they cannot determine property condition

Engineering Contradiction:

Improvevaluation speedVSAvoidproperty condition determination

Core Design Contradiction:

ProductivityVSMeasurement precision

Solution Approach 1:

The patent introduces credit scores as an intermediary indicator to infer property condition. Instead of directly inspecting the property, the system uses the owner's credit score as a mediator that correlates with property maintenance quality, enabling indirect assessment of property condition without physical inspection

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent replaces the mechanical inspection process with an information-based system. Rather than physically examining the property structure, the system substitutes credit score data analysis to determine property condition, transforming a physical assessment task into an information processing task

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

2Measurement precision

If complete inspection is performed, then measurement precision is improved, but loss of time increases

Engineering Contradiction:

Improveproperty condition assessmentVSAvoidinspection time

Core Design Contradiction:

Measurement precisionVSLoss of time

Solution Approach 1:

The patent performs preliminary data collection by obtaining credit scores before the valuation process. Credit score information is gathered in advance from databases, allowing the system to have property condition indicators ready before conducting the actual valuation, thus eliminating the need for time-consuming on-site inspections

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The patent uses credit score records as a copy or proxy for actual property condition. Instead of creating a detailed physical inspection report, the system uses the credit score copy to represent property maintenance quality, providing a time-efficient alternative to complete inspection

Inventive Principle:

Principle #26Copying

Data Source

PatentUS7653555B2Valuation using credit score

Publication Date: 2010.01.26 NYTELL SOFTWARE LLC

AI summary

A method of appraising the value of a property based on obtaining a credit score of an owner of a property and assigning an ownership responsibility indicator to the property. The ownership responsibility indicator provides insight into the condition of the property without performing a complete inspection. A more accurate value of the property can then be determined.