What’s half-way between a Zestimate and a real appraisal? Lenders and borrowers are eager to get the benefit of the doubt of a full appraisal without the full-blown doubts incurred with an Automated Valuation Method.
Enter Zaio.com, which is building a nationwide database of drive-by appraisals — really driven-by appraisals. From the San Jose Mercury News:
Zaio started off as a little-known Canadian company founded by Brad Stinson, an appraiser who tinkered with software. Stinson, now vice president of business development for the company, still has an office in Calgary.
Although the company has a low profile, recent hires such as Douglas Vincent, former chief collateral officer with Countrywide Bank, and John Ross, former CEO of the Appraisal Institute, a national organization in Chicago, are making people take notice.
“Our goal is to have information on every home in America,” said Tom Inserra, president and chief executive officer of Zaio from his Scottsdale home. “We already have hundreds of photographers and appraiser trainees and are deploying them around the country quite rapidly.”
The photographers have been sent to 170 cities in the past two months, covering the territory and sending it back to Zaio’s servers. Although the cities of Mesa, Ariz., and Spokane, Wash., are completed, part of the first wave is the Bay Area, and Brentwood seems to be the start of an estimated 80 million homes that will eventually make up Zaio’s database by 2010.
Inserra said that many Web sites have taken aerial photographs of homes, but the system was lacking real-life photos. The information isn’t available to the public but to banks, insurance companies and lenders who will use the service to help determine appraisals objectively, he said.
Zaio’s workers are required to go through a background check, wear company ID and clothing and hand out pamphlets written in both English and Spanish to anxious homeowners. The company also alerts the police department they will be in the area.
“We don’t invade someone’s property or try to sell them anything,” he said. “We’re also the only company we know who will let the homeowners opt out. … If you call Google, they won’t take your home off their aerial photo.”
Inserra said that concerned homeowners can fill out a form on Zaio’s Web site, www.zaio.com, to opt out.
What’s the catch? Like the man said, it’s not what you see, it’s what you don’t see:
“I do see Zaio as a tool for a quick appraisal,” said Karen Mann, a Discovery Bay appraiser. “In a regular subdivision it shouldn’t be a problem because it becomes a statistical analysis. But if you have a husband and wife fighting over property with holes punched in the walls, you need a real-life appraiser.”
Mann said the reports, which act as “drive-by appraisals,” are superficial.
“We appraised a house that was a drive-by appraisal. It looked great with new windows, paint,” she said. When they went back for a second interior look, Mann found a gutted house with boards littering the floor. “The exterior doesn’t tell the whole story.”
Nor, possibly, can you properly evaluate homes for which the story is an essential component of value — historic homes, architect-designed homes, “George Washington slept here” homes. The counter-argument, not insubstantial, is that having a standing database of valuations eliminates the danger of the sometimes cozy relationship between appraisers and loan officers. Zaio might just be the underwriting team’s best friend.
Technorati Tags: disintermediation, real estate, real estate marketing
John Corey says:
I can not think of any way this would be a bad idea. As an investor knowing that there is a database with all properties sounds great. As a private lender getting access to the information would be a big plus.
Even if this is only part of the picture it is a more complete picture than one has now.
John Corey- Real estate investor, 20+ years – multiple states and countries.
Check my blog – http://johncorey.wordpress.com/ – advice for real estate investors.
March 23, 2007 — 9:19 am
Tony says:
Interesting concept..
I’m most interested in how they plan to scale to a point where they can keep the information relatively updated.
Combined with turnhere’s US video project data and also with a lot of the 3D photo research going on, this could be part of a whole approach to user interfaces involving spatial and multimedia data.
Tony
March 23, 2007 — 9:35 am
apella says:
I would be interested in what Zaio classifies as an appraisal trainee. Also if these drive bys are being classified as appraisals under what guide lines in relation to USPAP and as such how USPAP defines an appraisal.
Something that I will have to look into, thanks for the post.
March 23, 2007 — 11:42 am
B says:
What an outrage!! Strangers running up and down the street taking pictures of every property, disguised as joggers! Homeowners, wake up, this is surely another breech of privacy!!!
August 15, 2007 — 6:39 pm
susan says:
Strangers in the neighborhood taking pictures of every ones house. Horrible, invasion of privacy. There are no safeguards in place to see to it that this information is accurate, up to date or can only be used in limited cases for limited reasons and for the intended purposes. I’m saying no, no, no! Don’t go past my posted no trespassing signs I’m the one who can’t be trusted with anyone who takes a picture of my property without proper identification and my permission!
October 29, 2007 — 1:46 pm