‘We Want To Be Wielders Of Fire, Not Get Burned’: Why Appraisers Are Embracing New Technology

In today’s changing commercial real estate market, an accurate property valuation is crucial for getting a deal to pencil. This rings particularly true as lending standards have tightened and investors have become more cautious of where they put their capital. 

With nearly $1T of commercial debt coming due by the end of 2024, it's an appraiser’s job to bring certainty to an otherwise uncertain market.

Setting its sights on continued growth, Valbridge Property Advisors, North America’s largest independent commercial appraisal firm, is creating its own next-generation appraisal development software platform to centralize operations and better serve its clients.

“As we head into our second decade as a company, we're more intentional and focused with what we’re working on, and we realized that it's time to build a modern software platform that will benefit both us and our clients,” said Jody Bishop, CEO at Valbridge.  

Valbridge’s proprietary software serves as the backbone of its valuation and data-driven workflows, centralizing property and expense data, coupled with analytical tools and more. Its new software will expand on these capabilities, introducing an advanced suite of features designed to further enhance the firm’s overall appraisal and specialty services capabilities. It will also capitalize on what the firm calls “the Valbridge Brain Trust.” 

“We want to move away from the monolithic, static software programs that get outdated as soon as you release them, and to not fall into the trap of chasing every shiny new tech that comes along,” said Tony Lesicka, vice president of technology at Valbridge. “Appraisers are old hats when it comes to the threats of automation, but we’re looking to change this perception to a more balanced and nuanced perspective.” 

Lesicka said that for years, the appraisal industry has been concerned that automated valuation models, algorithms to analyze large amounts of data to determine property values quickly, will replace appraisers. They have in some specific cases, but these automated models as a whole have proved to be flawed, he said.

For instance, Zillow canceled its iBuying program in 2021 with a statement from CEO Rich Barton saying, “We've determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility.”

Instead of taking technological advancements as a threat, Valbridge has embraced the challenge with open arms, Bishop said. The company recognizes the benefits of incorporating data automation and generative artificial intelligence into daily practice, but it knows that the appraisal industry will always be a relationship business that requires fine-tuned local expertise.

“We can appraise portfolios across the nation, and we have experts in every property type and every valuation service,” Bishop said. “And having that true local market knowledge is difficult to replace.”

Many national appraisal firms boast their wide reach, but Valbridge is focusing on growing its market reach by getting even more granular, Bishop added. Valbridge was formed by a collective of independent commercial appraisal firms to combine resources to provide superior services in all 50 states, and it now has offices in 70 locations. Introducing this new software program to its employees will not only allow them to grow and expand their skill sets but better serve clients on a daily basis, he said.  

Valbridge is also using this new tech initiative to attract the next generation of appraisal professionals.

“I've talked to some of our younger folks about the software, and they were so excited about it because even though starting a new path might seem intimidating, they recognize how it can help them become more productive and help them learn and mature as appraisers,” Bishop said. “We want to be wielders of fire, not get burned.”

The appraisal profession is aging, said Laura Hulberg, business development and technology manager at Valbridge. It’s estimated that 80% of the industry is older than 50. 

Hulberg said the Appraisal Institute, the largest professional valuation organization in the country, is concerned about a dearth of incoming talent. As a result, it created several university-related initiatives to shine a spotlight on the profession and make it more accessible. 

“Keeping that in mind, plus wanting to attract the best and the brightest young talent, we have a number of things that we're doing to achieve this,” she said. “Several of our people across the country will speak to colleges about the appraisal profession and the opportunities. We also have an amazing six-week summer internship program called Valbridge Scholars.”

Hulberg said the Valbridge team has created several affinity groups within the organization, including the Valbridge Women’s Council and the Future Leaders Alliance, that focus on sharpening leadership soft skills like negotiation and time management. 

“Just like with our approach to new technology initiatives, we’re always being proactive and investing in our professionals by teaching them how to provide the best appraisal services and, arguably even more importantly, develop meaningful connections with clients,” she said. 

Bishop said that given the work Valbridge has done to improve its internal systems and invest in its people, it’s perfectly positioned to hit and even exceed its growth projections.

But even as Valbridge continues to grow, recruiting young talent will remain one of the biggest challenges, he said. 

“Real estate changes every day, and property owners don't like that tomorrow can be completely different depending on what happens,” he said. “Appraisers must stay on the edge and be constantly talking to folks, trying to figure out what's going on in the market. We want to be excellent, and the profession is wide open for young people to join. We need them to keep excelling at what we do.”

This article was produced in collaboration between Valbridge and Studio B. Bisnow news staff was not involved in the production of this content.

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