Hybrid Appraisals – Why They Are Impacting Appraisal Employment
How hybrid appraisals may impact your future
A day or so ago, I found out about the rebranding of ZAIO into Clarocity, and their purchase of Valued Veterans AMC.
The ‘new’ CEO of the Canadian/USA company, formerly ZAIO, now named Clarocity, was recently interviewed. Take the time to actually read this interview. If you have forgotten, ZAIO came into the US in about early 2008 or so with the intent to develop property data bases in most urban areas – with photos, that could be re-used by various entities. They sold ‘zones’ to a number of appraisers, expecting them to gather the data. Ultimately, the concept went bust. And various on-line web based “property value” services took hold.
Now Clarocity is developing, and rolling out a new proprietary valuation service which combines a BPO & public data with appraisal. Clarocity has purchased Valued Veterans AMC (near Kansas City, KS), rebranded it as ValVets, and is using their stable of vendor appraisers to complete this new valuation product, which is basically a ‘desktop’ appraisal, or hybrid appraisals. The claim is appraisers can earn ‘more per hour’ than what they presently earn doing our existing appraisals on the GSE forms.
As would be expected, the CEO claims this new type of product is revolutionary and will become the accepted ‘norm’ for appraisals as time progresses. That of course, remains to be seen. But everything has a “life cycle”, and I do agree the present appraisal forms are woefully outdated, which tends to slow down the appraisal process.
I wanted to dig a little deeper, and have found this ‘white paper’ written by a key person at ValVets (the new name for them), which explains what Hybrid Appraisals are, and why some lenders are using them. I suggest you take the time to read this info so you know what these are and how they may impact your future.
What are hybrid appraisals?
…looks like, feels like and acts like a 2055 exterior appraisal form. There is one main exception: A local real estate agent, not the appraiser, conducts the exterior inspection. The form has the same comparable sales grid as the 2055, including line item adjustments and photos of the comparable sales and is completed by a licensed, local appraiser. The appraiser’s value opinion is provided without AVMs or suggested comparable sales. The real estate agent has no say on value and the appraiser can override or reject elements of the inspection and/or even reject the assignment based on the inspection or complexity of the assignment. The form used in these cases also contains appropriate USPAP disclosures and limiting conditions, including the fact that the appraiser is relying upon a third party for the inspection results.
Clarocity is not the only company pushing these valuation products on to lenders, and asking appraisers to assist the process. They need an appraiser’s license (and E&O) with reports in compliance with USPAP to comply with federal lending regulations. But since there is no requirement that the appraiser actually do an on-site property inspection, they can use real estate agents who do the exterior/interior inspection for $40 or so. The BPO is handed off to the appraiser, who then determines an ‘appraised value.’
However, in my shoveling today, I also learned that Clarocity has another associated company – Valuation Vision, which is set up to provide BPO’s, among other products, to lenders. While digging around the edges and a bit deeper, I came across another web site, RipOff Report, with posts back into 2015 from many real estate agents who stated they have not been paid for the BPO’s they did for Valuation Vision.
Another puzzling issue is a private company, KeyLink Family of Companies, is somehow tied to Clarocity and Valuation Vision. Not sure how they fit into this business total operation.