A non-AVM appraisal alternative?

[Tawfik Ahdab]

http://www.cnw.ca/fr/releases/archive/May2006/10/c5194.html

" A number of Zone Claims have been received from appraisers in other areas
along the Eastern Seaboard of the United States and the Company will soon be contacting those appraisers to complete the licensing process.
Photography in the Phoenix area is well underway with 150,000 images now
in the database. Property data for Maricopa County has been integrated and
appraisers have begun their mass appraisal work in zones where photography is complete. There are over twenty photographers on the streets in the cities of Phoenix, Scottsdale, Mesa, Tempe, Chandler and Gilbert.
In Zaio's test market of Spokane, WA there is now a steady demand for
GeoScore appraisals from several local lenders. They are also requesting the
Company expand its coverage to other major centres in Western Washington.
National interest is now appearing for Zaio's photographic database known
as GeoPic. The number of businesses contacting the Company keeps growing and management is now convinced more than ever of the value of its expanding database.
In June Zaio is attending a national conference known as the Predictive
Methods Conference (PMC). This venue will allow the Company to show an
audience of national mortgage lenders how its product far surpasses the
Automated Valuation Models (AVMs) currently used by many lenders in order to get fast turnaround on valuation requirements for mortgage approvals."

An AVM with a photo, perhaps, is what must make their product far superior to an AVM.

 

[Couch Potato]

Pay to do appraisals rather than get paid.

I have yet to see a financial report from ZAIO that shows any revenue from selling appraisals. The only revenue I have seen is from sell the rights (and responsibility) to appraise ALL the properties in the designated zones. I personally know someone who has invested heavily in Zaio zones. I hope he doesn't lose all his money, but it seems to me Zaio ought to be paying the appraiser's to take the zones. It is like paying a mortgage broker to be able to get all their comp check business as I see it.

 

[Austin]

GeoExlorer Maps

I subscribe to and use Geoexplorer aerial photos. You put in any address and you get a good quality aerial photo. One of the features already programed into the system but apparently not in use yet is house and street buttons. In the future we will be able to click on the house and get all of the information. I assume the street button will show the history of every property on the street. I will be able to sit here in Virginia and do appraisals all over the country.
Question: What does this say about the future of state appraisal boards and the appraiser regulatory system? Interesting to be in this business. I can still remember standing in front of the subject property with an instant poloroid camera watching the picture develope and thinking about how wonderful modern technology is. I tried to get my dad who was an appraiser/broker to purchase an electric typewrite. He said it was a waste of money. We had four old typewriters and an adding machine with a manual crank handle. I won't even tell you about the discussion we had about a copy machine. We ended up with a used one that you had to pour a gallon of toner in.

 

[hastalavista]

Tawfik-

As of now, I'm planning on attending the PMC conference (it will be my second time).

If I hear anything interesting regarding Zaio, I'll post it.

 

[Jim Onderisin]

This company caught my attention when it rolled out not many years ago. I was too busy at the time to even consider thinking about the proposition, but since have wondered how the company has fared. What do you think of the concept, Tawfik? I've never been convinced that it would work.

 

[Tawfik Ahdab]

Jim,

I think this type of service might improve on or at best displace the standard "desktop" appraisals that some appraisers in this forum report doing and such lenders as BOA are asking for, but there's no substitute for an appraisal.

Interior quality and condition, remodeling/updating, easements, encroachments, surface defects (even some exterior ones), adverse neighborhood conditions, functional obsolescence, deferred maintenance, system and component inadequacies, and so many other items - none of these will be revealed with a photo taken from the public street even with a 7 megapixel camera.

And that's not even considering the valuation part.

 

[Walter Kirk]

Zaio's system, AVM's and the study of the entrails of a dove are NOT APPRAISALS. If we wish to remain professionals and not be reduced to clerks we must insist that the word appraisal be used only to describe a USPAP compliant report. State boards and legislatures must regulate all valuation providers equally.

 

[Tawfik Ahdab]

Walter, I wish that were so. But boards have the power only to license individuals. They are powerless against companies. The laws themselves need to be re-written.

 

[Claude From NY]

Recent Financials

CALGARY, April 28 /CNW/ - The Company generated revenue of $96,818 for the year ended December 31, 2005 primarily from the sale of licenses compared to $50,917 in 2004. The higher amount in 2005 reflects the sale of Appraisal Zone Licenses in the Orlando, Florida area and in Maricopa County which includes the cities of Phoenix, Scottsdale and Mesa, Arizona. Appraisers pay the license fees over a period of time of up to one year and the Company records the revenue only as it is received. The full value of the licenses mentioned above is US$325,000. In addition, the Company received $9,000 in Zone claim revenue and $8,600 from the sale of photographs out of the GeoPic database. Zone claims are priced at US$250 and give an appraiser the first right to purchase a Zone license when Zaio moves into his city. The net loss for the year was $540,723 or $0.022 per share compared to $469,944 or $0.023 per share for the year ended December 31, 2004.

http://biz.yahoo.com/cnw/060428/zaio_year_end_rslts.html?.v=1

 

[Fred Freund]

An article in Valuation Review came out today with a headline of "New England appraisers buy into Zaio’s vision". I went to Zaio.com to see what the fuss was about. Essentially, you can claim a zone for $250, then pay three installments of $2,500 each to have that zone. I did't have the time to watch all of their lengthy flash presentations but I did look at their contract. I also looked at their zone map. The areas they are covering in metro Boston are rather diverse. A large part of this area does not work with the traditional AVM because the neighborhoods are so mixed. I can see how someone looking at each individual property might make the system work better but that are still so many variables in this urban market. Also, the way an appraiser will make money is when a lender requests a Zaio product in that appraiser's zone. So if the lenders aren't buying into their system, there's no income. And looking at their finiancials makes it look as though most of their income is from appraisers and photographers buying zones, not lenders buying the valuation products.