From: Appraisal Buzz Newsletter []
Sent: Wednesday, November 08, 2006 11:30 PM
Subject: Appraisal Buzz Interview with Zaio
  Thursday, November 9, 2006
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Appraisal Buzz Interview with Zaio

Zaio is an appraiser-owed and appraiser-controlled data collection company with a new concept called Pre-Appraising. Appraisal Buzz has interviewed Zaio in the past but we are doing it again because their national rollout plan is rapidly catching on with appraisers all over the country. Zaio photographs entire cities from the street and then helps appraisers carefully monitor the value of every home before any transaction is even underway.

Buzz interviews Brad Stinson, Founder of the Zaio concept and VP of Business Development. Here is what he has to say about Zaio, the appraisers’ role in the future.

Buzz: Is this a type of AVM or what is Zaio doing?

Zaio: There seems to be a misconception in the market that Zaio appraisers are producing an AVM, but, this is not the case. Computers do not determine the value…real appraisers do. We are simply delivering the appraisal industry a unique and powerful structure where local appraisers can completely analyze all listings and sales in a specific neighborhood, on an ongoing basis, to pre-appraise and track the value every single dwelling Not only are these appraisers correcting parcel data and weeding out non-arms-length transactions, they are preparing their own database in advance of a transaction so they can respond to a lender as quickly as an AVM but produce a high quality, USPAP compliant report. Also, because they are doing their homework in advance they have no time constraint and no occasion for lender pressure. The result is just better exterior appraisals, very quickly.

Buzz: So, are these appraisers populating a database?

Zaio: Yes, we believe that appraisers need to do more research than they are currently doing by analyzing entire markets rather than just one house at a time. The appraisal reports they can then generate with Zaio contain factual market data that appraisers often don’t have time to prepare under their current time sensitive process. Because they do their detailed analysis in advance they can respond instantly to questions of value and it actually improves appraisal quality while enhancing an individual appraiser’s professional capacity. Zaio adheres to the highest standards of USPAP and we have had several conversations with USPAP experts to verify the validity of the process within USPAP guidelines. We are simply talking about doing amount of market study that is necessary to do a top quality appraisal…and finding the time to actually do it. We openly acknowledge that the appraiser has copyright to the data they collect, which they share with Zaio and the Zaio appraisal network under a structured revenue sharing plan.

Buzz: What additional research are appraisers doing?

Zaio: We help appraisers conduct a detailed ongoing analysis of all homes a specific geographic region which they own the protected right to manage. It’s called a Zone. Zaio is an acronym for Zone Appraisal and Imaging Operations. Licensed appraisers physically walk down every street, inspecting every home and recording their observations in a structured ratings system we call a GeoScore. They do this on a handheld PDA. Then, by monitoring ALL listings and sales in that Zone going forward, the appraiser is able to maintain an ongoing, accurate value of every home and can report on it instantly. In the process they will also be correcting assessor parcel data. We believe that appraisers are ideally positioned to be the best source of accurate property data, market data and values. Accurate property data is an industry problem appraisers can help to solve, and it is the underlying element to all forms of valuation.

Buzz: How is an Exterior Zaio appraisal different from a regular drive-by 2055?

Zaio: A Zaio appraiser inspects every home annually from the street. Therefore the physical exterior inspection in the database could be as much as 12 months old, but it can be updated to match the Effective Date of Appraisal if the client wants to wait for another inspection (Interior or exterior). We make an extraordinary assumption on this specific point when an online report is delivered. Clients know exactly what they are getting, when they don’t order a further inspection. We have discovered however, that homes typically deteriorate slowly and are improved rather quickly. This means, aside from fire and demolition, if there is a difference in condition over the year it is almost always for the positive, meaning an online Zaio value could be conservative. However, the real plus is that the appraiser is familiar with every home in the neighborhood and their report reflects a complete understanding and analysis of the entire market rather than just the subject and a few comparable sales. Also, the appraiser’s online value estimate is completely unbiased because the appraiser has not been constrained by an existing or pre-determined value requirement necessary to meet a certain transaction. Lenders can begin each loan application with a correct value estimate immediately. This helps lenders issue their customer a correct Good Faith Estimate as to the cost of the loan, from the start, hopefully valuation conflicts.

Buzz: How does this help the Appraiser?

Zaio: There are many advantages for an appraiser. Some key points are: Passive income from the network’s ongoing sale of data and online appraisals; an exit strategy when the appraiser retires because a Zone is a resalable asset connected to the Zone’s passive income stream; less evening and midnight work because the research is already done for most properties; additional interior inspection work when clients ask the appraiser to upgrade the online report; escaping value pressure from the existing transaction and many more. However, we also believe it is imperative that appraisers find a way to compete with AVM and BPO alternatives, or competition for the remaining work will drive appraisal fees down and many appraisers right out of the business entirely. Staying competitive is the biggest advantage of all. Now is the time for action. Appraisers have lost over 70% of the valuation business already to AVMs and Broker Price Opinions because these new products are faster and cheaper than an appraisal. With the Zaio technology and business model, appraisers can organize their data and produce products that can readily compete with these new products. When appraisers come to our regional meetings and hear about the program it’s a real paradigm shift, and they get excited once again about their future in a business they love. We think appraisers have been kicked around long enough. It’s time to show the collateral risk industry we can provide the information they need from an unbiased perspective prior to the transaction.

Buzz: What is the national plan?

Zaio: Over the next 12 months Zaio is building a nationwide network of appraisers, and Zones are going very quickly. Zaio is conducting local presentations to interested appraisers in the largest 26 metropolitan areas in the US and hosting online Webinars for the rest. The rollout schedule and notice of meeting dates is posted on the website. When cities become active, Zaio photographs every property from the street, validates every address and merges the photos with existing parcel data on behalf of participating appraiser. Appraisers are require to invest in the data collection cost but are immediately compensated by the appreciating Zone asset and the protected and perpetual right to be the local expert for a certain geographic boundary. Financing is available for the appraiser and existing appraisal agreements already make Zone Ownership cash flow positive from the start.

Buzz: How can appraisers find more information about the process?

Zaio: They should go to and click on the lower left corner where it says “For Appraiser”. There are two presentations – the first is a short overview and the second is a detailed explanation. On this page there is a link to Zone Maps and the RSVP to attend a local meeting or Webinar. If an appraiser has interest in at least 10 Zones or can find other local appraisers to take up at least 10 Zones they should email me directly at
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