ALOFT = “A Lack of Freaking Talent”
When 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.
- Appraisal Reviews for $3 – The Devaluation of Appraisers - January 16, 2024
- FNMA Continued Effort to Get Rid of Appraisers - September 29, 2023
- Beware of Bifurcated Appraisals - August 4, 2023