| Return to Appraiser Central |
|
DANGER OF ZAIO Corporation |
|
Zone Appraisal & Imaging
Operations |
| This company has its head office in Calgary,
Canada. Not long ago ZAIO purchased United Systems Software in
Arizona - no doubt from big windfall funds gotten from ill-advised
appraisers who sent them $10,000 area fees. United Systems has
been around a long time. Old appraisers will remember their
original DOS Hyperform software. Their current appraiser software goes
by the name of Appraisal Studio. ZAIO's intent is to come up with a more accurate automated valuation database that includes photographs of the exterior of each residential property in the U.S. They want appraisers themselves to provide these pictures, along with a written description of the home(s) and neighborhoods they're in; so that ZAIO can gain leverage with lenders by telling them an actual experienced and licensed appraiser provided this information. |
|
The reason? This Canadian company wants to be on the forefront of providing Lenders with data they can use to do more Automated Valuations Modules (AVM). Any appraiser who provides data that will be used by these Automated Valuations is cutting their own throats, and the throats of their fellow appraisers. They are virtually guaranteeing that they themselves will probably see their appraisal workload cut in half (or more) in the future. Cooperating in any way with AVM data providers is like one step forward and two steps back. This includes those appraisers who have been sending data via the Appraisal Institute's "appraisalport". |
|
Automated Valuations started out several a years ago with data collected from County Assessor and local Assessor records. For a few years, Lenders went "wild" using these. They were thrilled that companies selling this data to them only charged them $20-$30 and no live Appraiser was needed. This meant that Loan Officers could make the loan based on nobody ever seeing the exterior of the property. Well, as they soon found out many of the loans made based on these Automated Valuations turned out to be rotten loans for several reasons. |
|
Appraisers know that a home across the street from oceans and lakes are sometimes worth hundreds of thousands of dollars less than the waterfront home on the same street. Homes surrounded by "crack homes" and "eye sore" homes, or in run down neighborhoods are not comparable to homes in good neighborhoods. Appraisers can see this, but Automated Valuations can not. |
|
County data, and Assessor data was never really that up to date data. Much of this is 10 or more years behind. If anyone relies solely on this data to do any sort of valuation, versus a live appraiser seeing the subject property and all comparables, they are living in "fantasy land" -- if they think they will come up with any value that represents the true market value. County data and Assessor data may takes years to reflect that new two story, 800 square foot addition in the rear or side of a property. With County data, forget finding inground pools, finished basements or new kitchens put in just last year, or even in the past several years |
|
On October 14th, 2006 the CEO of ZAIO, Thomas J. Inserra posted at our Appraisal Talk Message Board the following; "Our written contracts that we sign with appraisers REQUIRE us to pay appraisers in cases when we sell valuation products to lenders. Thus, the contract is specifically designed to prevent ANY DATA or ANY valuation product from ever being sold UNLESS the appraiser is paid. That means we are purposely trying to keep the appraiser as the most important part of the valuation process." As you can see, ZAIO's game plan seems to be to both sell analyzed appraiser data and software to lenders. At first they will pay appraiser's "chump money" for their data so that lender's can automatically populate 2055 driveby forms. So soon appraiser's will see much less 2055 "driveby" work, as lender's will be doing them automatically, complete with analyzed (versus raw) appraiser data. Then they will move into other appraisal types. Any thinking person can see that a major cause of the subprime market meltdown, and the billions in losses lenders just took, was primarily do to lender use of these faulty "fuzzy logic" AVM modules, desktop loans and driveby appraisals. My guess is that the rampant use of AVM's will go on hold for at least a while - which does not bode well for those who bought in to ZAIO's "scheme". One appraiser got it right about ZAIO's scheme. He said;
Place some Magazine ads and email appraisers. Do the same thing ZAIO is doing for only $6,000 per zone.... |
|
| Read More on this subject here: |