Your house is about to have its picture taken.
In an attempt to modernize the appraisal industry, startup company Zaio Corp. is working to create a database that will include the photos and values of almost every house in the U.S.
“We believe that it is the only known company that has solved some very significant problems that are hitting the headlines these days,” said Zaio Chief Executive Officer Tom Inserra, formerly the national chief appraiser for the Federal Deposit Insurance Corp., which sets the federal guidelines for appraisers.
In the wake of the mortgage debacle, some appraisers have been blamed for artificially inflating home values at the behest of greedy lenders — a problem Inserra says Zaio’s system will help combat.
The company has partnered with certified appraisers in each city who are responsible for externally appraising the 10,000 homes in their assigned “zones” and updating their appraisals frequently.
Zaio will use the information to rate the property using its patent-pending mathematical formula and will store the home values in a secure database.
“By doing the appraisals in advance, lenders don’t have the opportunity to manipulate the home values,” Inserra said. “You don’t have a lender saying, ‘Hey, I need you to hit $400,000,’ because a lender and a borrower don’t exist yet.
The information will be available to lenders or anyone else for a per-property fee.
Lenders also can commission a more detailed, interior appraisal of an individual house from the company.
Zaio has hired 400 photographers, who have already snapped photos of 12 million U.S. homes and are working to photograph residences in 200 cities, including the District of Columbia, at the rate of 100,000 homes a day, Inserra said.
Linda Braley, a former president of the Washington D.C. Metro Area Chapter of the Appraisal Institute, said Zaio’s model looks to be better than automated valuation models — computerized valuations that use raw data without human input — but not by much.
Working from exterior valuations can be misleading, she said. Homes that look fine from the outside could have flooded basements or decrepit flooring.
Braley was also skeptical of the company’s use of a proprietary valuation formula at a time when appraisers are being asked to be more open about their process.
“People keep trying to find a big grand scheme for this,” Braley said. “They’ve answered some of the issues, but they’ve created some others.”
