HousingWire sat down with Class Valuation’s Chief Innovation Officer Scot Rose to discuss the company’s latest advancements in tech, including 3D imaging technology.
There’s no question the past year has been momentous for Class. I joined in April of 2018 when things were building steam. Narrow Gauge Capital had just invested in the company, and Mike Detwiler came on board as Chief Executive Officer. The vision they had for the business was inspiring. They saw an industry ripe for modernization and an AMC poised to propel the space forward through technology, innovation, and Thoughtful Change. Since then, we’ve hired the right team members into the right roles, allowing us to ramp up quickly to deliver on that vision. I’ve been fortunate enough to be at the forefront, working with key industry stakeholders to define the future of the valuation industry. We are now proud to unveil our findings this fall that support valuation modernization efforts industry-wide.
Q. How does Class Valuation distinguish itself from other AMCs?
We recently had a third-party company survey and speak with several of our clients and appraisers for their unfiltered thoughts on Class Valuation. The feedback was clear – our dedication to exceeding customer service expectations as well as our innovation efforts are what keep us at the forefront of our partners’ minds. We’ve built our business on putting customers and appraisers first. We strive to be on a first-name basis and regularly reach out directly to check in on their satisfaction with our team and services. The origination process can be stressful for all involved, and we do our very best to ensure we are offering a transparent, high-touch experience every step of the way. In addition, Class is known for custom-built technology solutions that enhance our customers’ experience. Tools to see state-by-state and county-by-county pricing, current turn-times, and order status are just some of the features we’ve long provided to our clients. Now, we are advancing that foundation even further with our custom-built technology that is defining valuation modernization.
Q. In what ways is Class Valuation making the appraisal process easier and more transparent?
We are focused on creating the industry’s first true Property Fingerprint for homes across the country. We define Property Fingerprint as the future of data collection in the home valuation process. This cannot be done with traditional valuation tools and is only possible thanks to our mobile inspection app designed for appraisers with features like 3D property scanning, highly accurate rendered floor plans, and much more robust data collection. Until this point, we’ve been relying on largely manual processes to collect property information and value homes. Now, we can use advanced technology to ensure greater transparency, granularity, speed, consistency, and credibility on every home valuation.
Q. How does 3D imaging technology transform the appraisal process?
The application of 3D scanning in appraisal and mortgage banking is infinite, so I can only scratch the surface here. There has been a lot of attention recently around our industry’s move to a bifurcated process and appraisal modernization, so I will focus there. To do this responsibly, we need to give the desktop appraiser and all other stakeholders enough information to be confident in the results. Trying to get appraisers on board to trust minimal data in a PDF report that includes some property information, photos, measurements and a perimeter floor plan completed by someone they don’t know can be difficult. The appraiser completing the desktop appraisal often questions the credibility and reliability of the data, creating barriers to the scalability of the solution. With 3D scanning, Computer Vision technology creates consistent and accurate measurements, detailed floor plans displaying the true functional utility of the home, and a virtual tour that guarantees full transparency. This allows the appraiser to view the property interior and exterior virtually. Additionally, it provides more robust and granular data, allowing us to understand much more about the home than ever before: volume of rooms, ceiling height, the year/make/model of all major appliances in the home, window measurements, and spatial context of major attributes to the home both positive and negative (like where predominant views are visible from).
Furthermore, not only are we solving for process challenges on the front end, but this provides much more transparency and credibility, improving the overall collateral risk process for all downstream stakeholders. We see tremendous value in this for secondary market participants (e.g. rating agencies, investors, MI companies, etc.). We know this will improve the REO process and bring long needed transparency and ability to understand more accurately the investments that need to be made to bring a property up to marketability. As I mentioned earlier, there is just so much potential, and I think we will see the far-reaching value this has in the months and years to come.
Q. Some experts say tech firms are slow to develop appraisal technology. How is Class Valuation bucking this trend? That is a good question. Maybe hesitant is a better description than slow. There has definitely been a lot of development around the appraisal process but with little success. I believe this has been due to a lack of adoption, which is arguably the most important part of technology development. You can have a very strong product, but that is not enough in and of itself. That is how we are bucking the trend. We are not only investing in the technology, but we are equally — if not more importantly – building adoption. We have a whole team dedicated to outreach and engagement, led by Julie Jones, which focuses on keeping our appraiser partners informed and prepared for our future. We are providing, technology, mobile devices, and more to our interested appraisers to make them more efficient and improve report integrity along the way. We are integrating with their current software platforms to provide a seamless transition and improve their productivity, allowing them to be early adopters in the changing landscape.