National appraisal management company Class Valuation is extending its reach, with the acquisition of yet another appraisal management company.
The AMC today announced the acquisition of AppraisalTek, a Chandler, Arizona-based AMC, for an undisclosed sum. Class Valuation said it would bring on AppraisalTek’s 75 full-time employees.
AppraisalTek was founded in 2003 by Robert Oglesby. According to a Class Valuation press release, AppraisalTek operates in all 50 states, as well as the District of Columbia, and has a “significant staff appraiser impression” in Arizona.
The acquisition is Class Valuation’s fifth in recent years.
In 2021, operating as Class Valuation, the company acquired Pendo Management, and in February, it added Metro-West. At the time, Class Valuation claimed Metro-West was the “largest independent residential appraisal firm in the country,” and had appraisers in 80 U.S. metros.
It’s not clear how large Class Valuation is after this latest acquisition. Class Valuation did not return a request to comment.
Earlier this year, Arcapita, a Bahraini investment firm acquired a stake in Nationwide Property and Appraisal Services for an undisclosed price, giving them access to its 15,000 licensed appraisers. Arcapita said at the time that with “appraisals being a regulatory requirement for mortgages for new home purchases, refinancing, and foreclosures, the $7.5 billion real estate appraisal services market has cumulatively grown by 32% since 2008.”
AMCs, potentially even more so than firms who do business with the government-sponsored enterprises, are heavily influenced by changes to conventional appraisal standards.
One such change is the growing acceptance by the GSEs and the VA of desktop appraisals and hybrid, or bifurcated, appraisals. Hybrid appraisals rely on third-party data collection, while desktop appraisals require photos and a floor plan. Both are alternatives to the traditional appraisal, and potentially reduce the amount of time an appraiser spends driving to and performing an on-site inspection.
Expected savings on appraisals — as well as faster turnaround times and a relief valve for spiking appraiser demand and a declining workforce — has some AMCs salivating.
But not all say that desktop appraisals should immediately usher in lower fees, including Oglesby, the CEO of AppraisalTek, now absorbed into Class Valuation.
In a public LinkedIn post earlier this year, Oglesby said, of desktop appraisals, that the industry should “not expect lower fees.”
Ogleby said in an interview that he believes fees will ultimately come down as acceptance of desktop appraisals becomes more widespread. He said he has seen greater adoption of desktop appraisals by appraisers than when the option was first announced, although lower appraisal volume has left appraisers have fewer choices.
The model of “boutique” AMCs like AppraisalTek are under pressure to bear the cost of adopting new technology, Oglesby said. That technology is not just expected to eventually reduce costs, he added, but could also mitigate appraisal bias.
“The tech involved in those modernized products prevents human to human interaction,” Oglesby said. “The downside to that is that we know there are credible techniques and good practices, and those human interviews are important, because the elements that effect value can vary greatly.”