AI Direct: Connection to the Marketplace. (AI direct).
Why AI Direct?
As the marketplace for financial and real estate services has changed, so too has the role of professional trade associations in providing member benefits. For example, the National Association of Realtors has successfully marketed its members directly to consumers with www.realtor.com. Likewise, the Mortgage Bankers Association has formed a wholly owned subsidiary, Lender Technologies (www.lendertechnologies.com) that seeks "value-added technology and information products" for the mortgage finance industry. Enter AI Direct.
Under the direction of Chief Executive Officer Alan Hummel, SRA, AI Direct's mission is clear: "To provide the market with high quality appraisal, valuation and related services through our network of Appraisal Institute members. AI Direct connects the members of the Appraisal Institute to national clients and provides appraisers with the latest tools and technologies to meet the needs of the ever-changing marketplace. We are focused on delivering the highest standard for real estate valuation services to clients that value the Appraisal Institute standard for quality."
AI Direct has contracted with Real Estate Appraisal Services whose 24 years of experience of appraisal management now generates 70,000 to 100,000 transactions per year for a variety of clients. This proven operational capability ensures AI Direct clients responsible and efficient service and AI Direct members a large workflow of assignments. The Collateral Management System and AppraisalPort technology developed by FNC will facilitate that workflow.
Al Direct also aims to offer discounted technology products to appraisers via its Web site. For example, Geotrac will offer flood zone information services, mapping services and GIS software available for download. Links to various AVM providers' sites where an appraiser can run AVMs as part of an analysis for a client will also be available.
Participation: Free and Easy
AI Direct is a vendor management company that handles the ordering, managing and fee system for linking clients with third-party providers, i.e., appraisers. Appraisers can sign up, free of charge, to be included on AI Direct's fee panel, specifying their services or specialties. AI Direct then sells those services directly to the client. Sign-up will be available soon via an online application consisting of a member profile on the AI Direct Web site, www.aidirectconnection.com. All interested appraisers must opt in to the service, which can then be used as a supplement to their regular workflow as it does not preclude any former client relationship, nor does it prohibit establishing contacts with any new clients, including those delivered via AI Direct.
Appraisal Institute members will have priority in AI Direct's routing system. Designated members will have first routing priority, associate members second priority, and lastly, nonmember appraisers, if there aren't any available Appraisal Institute members in a certain metropolitan area, either because they are busy or do not cover that area. At first, designated members will be chosen by random rotation. Over time, based on availability and performance, appraisers will be ranked and prioritized. For example, if an appraiser is providing poor quality and bad service, that performance will drop them in the priority schedule. This level of quality control allows AI Direct to charge the same fee for all appraisals, regardless of Appraisal Institute affiliation.
In addition to routing priority, Appraisal Institute members receive extra discounts on the technology provided via the Web site.
Compensation: Not Your Typical AMC
After promoting the members of the Appraisal Institute and encouraging membership, especially designated membership, the second goal is to allow members to keep a larger part of the fee than they are accustomed to from traditional appraisal management companies. Knowing that they are selling the highest-quality appraisers, AI Direct has priced their product accordingly, on the higher end. The end result will mean higher fees for appraisers.
"AI Direct's business model does not derive its profit margins by making significant demands on the appraiser's fees, as is typical with most AMCs. The AI Direct model focuses on clients that recognize and have shown their willingness to pay for the value brought by both the AI Direct processes and the appraisers it contracts with. As such, AI Direct is in the position to retain appraisers at a fee that is competitive in their market," Hummel said.
Appraisal Services Offered
Regardless of your specialty, AI Direct most likely has an assignment for you, whether the client wants an AVM verified or a full narrative appraisal.
In addition to marketing complete, limited, relocation, FHA and REO/liquidation appraisals, AI Direct is marketing collateral verification products; review products: field, desk and data verification; portfolio review and quality control services aimed at utilizing a variety of methods to assist in measuring collateral risk, often in pool or bulk transactions; and consulting services in areas such as: litigation support for attorneys, market and feasibility studies for a diverse set of real estate investors, consulting on bulk portfolio acquisitions, and eminent domain work for federal, state and local governments.
While traditional appraisal services make up the core of the product, AI Direct also hopes to expand appraisers' valuable training and local market expertise, essentially repositioning their current products and skills into new areas. For example:
* Appraiser Price Opinions (APOs) -- As much as 25 percent of the residential mortgage lending market bases collateral decisions on Broker Price Opinions (BPOs). Al Direct anticipates strong demand in the home equity and secondary market for APOs.
* Standardized Formats for Commercial Real Estate Markets - Dialogue with representatives of the capital markets indicates that there is a huge opportunity to design and implement reporting formats away from the traditional full narrative.
* Non-Mortgage Lending -- For example, eminent domain, specific products for the insurance industry such as replacement cost, commercial consulting and tax appeals for large corporations.
"In surveying prospective clients, we have found they are interested in appraisal products that are tailored to their individual collateral risk profiles. That means AI Direct is focused on building long-term client relationships where we sell standard appraisal products today, while moving towards complete valuation and policy management in the future," said Matthew K. Sullivan, Vice President, Business Development, AI Direct.
Initial Run a Success
As an early testament to the needs of the marketplace, and its ability to fulfill them, AI Direct took its first order in early October. Using the Appraisal Institute Directory of Designated Members in lieu of the fee panel, because members have not been invited to sign up yet, AI Direct was able to meet the needs and gauge the interest. In conjunction with the appraisal assignment, Al Direct emphasized its ability to fulfill an appraisal service anywhere in the country. AI Direct is now in the process of establishing numerous such nationwide connections, explaining how making a single call to a multi-faceted provider such as AI Direct is a quality-ensured time saving device.
Industry Leadership: A Vision for Growth
The emerging model of AI Direct has Sullivan ecstatic about the future. "AI Direct has great potential to introduce additional products, especially technology, into the marketplace. With the potential of 18,000 individual members on a common platform, AI Direct becomes a network or pipeline through which AI-branded real estate technologies can be introduced. Essentially the strategy is one of 'expert clicks, expert people,' where AI Direct seeks technology that is designed to supplement and enrich local market expertise, not replace it," Sullivan said.
"We believe this works for the following reasons; first, the Appraisal Institute has the largest group of highly trained real estate valuation analysts in the country. Second, as technology proliferates within the financial services industry, we have the ability to capitalize on the human element that our local market professionals provide (and which we believe will ultimately be necessary regardless of how advanced real estate technologies become). Third, the Appraisal Institute has a strong brand name and the ability to educate, train and maintain standards for appraisers--which makes us a desired partner for any valuation technology provider."
As Managing Editor of Valuation insights & Perspectives and Appraiser News Online. Adam Webster has covered the real estate appraisal industry for the last year and a half.
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|Publication:||Valuation Insights & Perspectives|
|Article Type:||Company Profile|
|Date:||Sep 22, 2001|
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