National Database Captures Property Values

MBA (3/11/2008 ) Palaparty, Vijay
Scottsdale, Ariz.-based Zaio Corp., has developed an Appraisal Knowledge Warehouse, a database that seeks to provide fair and accurate appraisals to the industry.

“[We've] changed the appraisal process to make it more like the credit bureau process where they collect information ahead of time and store it in a secure place,” said Zaio’s CEO Thomas Inserra. “If there is any attempt to change or modify that data, there are notification alerts. That type of system doesn’t exist in the appraisal process yet.

Zaio's goal is to photograph, inspect and appraise every home in the U.S., Inserra said. "By partnering with local appraisers and equipping them with the needed technology, they are able to transmit data to a secure database," he said. "What is key here is that the property values are measured in advance of any transaction. And if values are changed inappropriately, the fraud can be tracked.”
The company mandates that its 140 million property records, of which 90 million are residential, be updated at least every 30 days. Using new listing data and sales data, appraisers are provided with guidelines on appraisal values.

“It’s a three-step process,” Inserra said. “We take the photographs and match them with the 90 million residential records we have acquired. Then we send the appraiser and prepare the appraisal records.”

Background checks are conducted on affiliated appraisers. They receive training through four webinar sessions. Additionally, regional coordinators provide support in proximity to the appraisers in an effort to establish quality control.

Information coming into the database also passes through layers of security and verification. The photographs are reviewed to eliminate personal information such as license plate numbers, personal property and people. Additionally, data is reviewed for its accuracy.

“The database is growing quite rapidly and is an efficient way for appraisers to get into the field,” Inserra said. “Most importantly, it eliminates mortgage fraud because no one is pressuring the appraiser. We can also measure the accuracy rate of every appraiser. Today there is no way to measure whether an appraisal is too high or too low. The way it is set up now is that a sales price is established and everyone tries to back into that price. In this case, it’s objective. The whole objective of appraisals is independence and objectivity.”

Zaio’s database is currently several terabytes large and grows each day as 50,000 to 100,000 photos are added. The company also maintains two secure bunkers in offsite locations for back up and redundancy in the event of disaster. The company remains focused on the U.S. market, but has received proposals to expand to international markets.

“We will hold off for now until we get further along in the U.S.,” Inserra said. “But it will be an opportunity going forward. There is a lot of turmoil in the market at the moment and it’s a good time to come up with technology that provides a seamless way for lenders to migrate to the system, providing accurate appraisals."