ZAIO TODAY: A fresh perspective from our new CEO
By Thomas Inserra
I’m delighted to report that since joining Zaio as Chief Executive Officer three months ago, we have successfully initiated development in 50 counties and have accelerated our program to establish a comprehensive nation-wide database.
By adhering to our business plan, and by capitalizing on the tremendous talent of our local appraisers and photographers, we have surpassed all milestones. Development is currently underway in 130 cities. Five lending institutions are already working with us in Spokane, our test city, and Zaio has just signed an exclusive provider agreement with LSI Corporation, the single largest purchaser of appraisal services in the U.S.
As we strive to build our national network, I’d like to walk you through some of the key areas that will steer and influence our progress: the market, the competition, our product’s strengths and the challenges facing our company.
A powerful, desirable product
There is a very strong need for our services. The market is unhappy with the time required to obtain a traditional appraisal, which for a retail customer is as many as seven days. There is a fundamental disconnect between the customer, who needs an accurate evaluation, and the providers of this service who are forcing clients to wait. Zaio’s innovative software allows appraisers to use our software to meet this market demand by delivering the appraisal in seconds.
I believe Zaio is in a unique position to respond to the marketplace. We are first on the ground with a product developed by appraisers for appraisers. We have modified and perfected our software over the last five years to a point where it is unsurpassed in the industry. We have aligned ourselves with LSI in a marketing relationship. Daily, they place thousands of appraisal orders for 24 of the largest 25 banks.
A leg up on the competition
Over the last ten years, traditional appraisers have lost 75% market share to AVMs (Automated Valuation Models) and Broker Price Opinions. AVMs rely on raw assessor data that has not been site verified, there is no photograph and no expert ever conducts an inspection of the property.
Another industry problem is objectivity. According to recent research, the number one concern in the industry is the pressure from lenders to meet a valuation. A lender, who typically receives a commission and thus has an interest or perceived interest in seeing a higher value estimate, may pressure the appraiser to reach a higher value estimate than can be supported with market data.
Whether we’re going head to head with traditional appraisals or AVMs, Zaio has the edge because we’re offering a full package tailored to the market’s demand for speed, accuracy and objectivity. The use of Zaio’s software allows an appraiser to accurately pre-appraise homes prior to the transaction and store completed appraisals in a database; lenders can instantly obtain appraisals in just a few seconds, much the same way they obtain credit reports today.
Appraisers buying Zaio’s software believe it will provide them with a competitive advantage in the market. The software allows them to produce a higher quality appraisal, conduct a more thorough analysis, and acquire a speed of delivery advantage since reports can be delivered in seconds rather than days and weeks. This should help appraisers to reclaim market share they’ve lost to AVMs over the past ten years.
The right product at the right time
Our timelines have been accelerated in response to customer needs. Our lenders are telling us, “I like it, I want it and I want it now.” This has been a little surprising. We expected we would have to sell the product to lenders; instead they are pushing us for it. In response, we are accelerating our growth, and 27 of the largest metro areas will be developed in the next year. These areas represent 60 to 65 % of all lending volume in the U.S.
Challenges: we’re looking for more than a few good men and women
Managing a company through rapid growth is in itself a challenge. But I believe we are well equipped to manage this growth. Zaio has been very successful at attracting good people to its management team and must continue to recruit good people to really roll this out across the United States.
Currently, the people we need on board are appraisers. Appraisers are very independent thinkers who do not move in packs. It’s actually quite easy to engage good appraisers on the merits of proactive appraising. The challenge is to reach them more quickly and effectively. Trade shows, seminars and conferences, telemarketing and other recent initiatives have been successful in getting the word out. In fact, I’m starting to get complaints from appraisers who’ve missed out on the zones they wanted to purchase.
I would urge interested appraisers to get in touch with us now. We appreciate the need for due diligence, but don’t wait too long. Our aim is to team up with high-quality appraisers and offer you exclusivity through the purchase of zone licenses. Once the zone license is sold in a particular center, the opportunity is gone.
Through this newsletter and other communication initiatives we want to work with you to grow your business and ours. We invite you to visit our website (www.zaio.com) on a regular basis so you can keep abreast of current news and events. And, always, we welcome your comments and suggestions. Feel free to email the editor at ((to be established)), with your ideas of how we can work together in the months ahead.
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