ALOFT = “A Lack of Freaking Talent”

ALOFT = “A Lack of Freaking Talent” - Appraisers BlogsWhen I read the announcement that Fifth Wall funded a relatively new startup called ALOFT, I and many of my peers were confused on what the value proposition actually is. Backed by a VC, including some of the biggest…

In addition to Fifth Wall, Aloft’s backers include VC firms Andreessen Horowitz and MetaProp, Zillow and Pacaso co-founder Spencer Rascoff, Built CEO Chase Gilbert and Doordash executive Gokul Rajaram.

…means that this funding is very expensive for ALOFT but they are trying to disrupt a very low-margin industry. I thought of the following acronym translation, not aimed at the management team, but befitting of the staffing problem they will face:

ALOFT = “A Lack of F***ing Talent”

“A shortage of home appraisers is bottlenecking the housing market, delaying closings and putting buyers at risk of missing out on low interest rates.”

They are getting funding to hire more appraisers (there is a chronic supply problem of competent appraisers that will work for less than the market rate) and it’s important because we are aging out. Appraisers won’t work for them unless they pay more than what appraisers are making during this boom.

In other words, ALOFT’s reason for being doesn’t solve the stated problem of not enough appraisers. They are sort of inferring they will solve the problem. How? By creating a crappy AVM like everyone else and trying to bypass appraisers? By training younger appraisers for and offering very high wages to pull them in? The main reason the industry is aging out is that the fees are too low and work too sparse for trainees.

I see this as further evidence the tech sector has no idea what the appraisal industry does and that there is way too much capital sloshing around looking for a home. The fintech world has wildly overhyped the valuation space – think Bowery Valuation and BBG in commercial valuation when you look closer and speak with ex-employees.

Jonathan Miller
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Jonathan Miller

Jonathan Miller

Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts.

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4 Responses

  1. Avatar Koma says:

    Hmmm why won’t I bring on a trainee? Well maybe the last time this happened, just before the crash in ’06, there were so many of us that my peer who started in 1985 said the fees for an appraisal drop to what they were in the early ’90’s. Right now I’m getting 40-50% above my 2020 standard fees, so that’s why I’m not taking on a trainee plain and simple.

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  2. Avatar Pat Turner says:

    I’m trying to figure out how to sell something worth $00.00 TOO!!!

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  3. Avatar Kenneth Yasinski says:

    Well said!

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  4. Baggins Baggins says:

    While amc’s and tech companies involved in appraisal distribution boast about record setting business growth. There is not a shortage of appraisers, but there is a shortage of appraisers willing to work with GSE’s as roughly half of all licensed appraisers no longer show up as having provided any services which land in the FNMA CU database.

    Adding more middle management will not solve the problem of there being already an excess of middle management. Nor will computers successfully replace humans in a predominantly human business. But that’s not what this is about. Previous post reference for your consideration below. ‘It’s just getting started’ as these companies seek to reform the real property and valuation industry to become more accessible to corporate investment strategy. Hammer this same point I suppose.
    https://appraisersblogs.com/appraiser-analysis-of-freddie-mac-appraisal-gap-white-paper/#comment-32738

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ALOFT = “A Lack of Freaking Talent”

by Jonathan Miller time to read: 1 min
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