Making Property Appraisals Less of a Headache
BOSTON GLOBE - February 3, 2020
Will Denslow and Brian Zitin met as randomly-assigned roommates at a Boston University dorm in 2013. Over the next four years, they started a string of companies together and individually: an e-commerce site selling wallpaper, a food delivery service for students, an online marketplace for class notes, a dating app called Crush, and a real estate brokerage.
“We did surprisingly well for not knowing anything about real estate,” says Denslow. As they brokered a few deals in Allston and Cambridge for multi-unit residential properties, they couldn’t help but notice how antiquated some of the steps of the process were. Like waiting for the bank to assign an appraiser to come out to a property, getting a check from the purchaser, scheduling the appraisal appointment, and then waiting to get the appraisal issued.
And, notes Zitin, “most of the software in the appraisal industry was made the year I was born — 1994.”
Focusing on home appraisal, a few months after the duo’s 2017 graduation, became the startup idea that took off. Their company, Reggora, now has 35 employees, and recently moved into a larger office in Boston’s Fort Point Channel neighborhood. (The name is a portmanteau of “real estate” and “agora.”’) Reggora has so far raised $5 million in venture capital funding — some of it from Boston-based Spark Capital, the firm that has put money into Twitter, Wayfair, and Warby Parker, the glasses retailer. And more funding will likely be announced this month.
“We have no marketing team,” Zitin says, but Reggora is already working with local lenders like Leader Bank as well as national financial institutions. There’s lots of demand, in turns out, for streamlining the appraisal process with what Zitin calls an “Uber-style workflow.” The company created software for both the bank and the appraiser, which manages the steps from assigning an appraiser to visit a particular property, to facilitating payment (usually around $400), to collecting all of the data from the appraisal report.
Zitin says that as Reggora has crafted software for banks and appraisers, it has focused on three things: reducing the time required for the appraisal, since banks (and home buyers) want to get mortgages finished faster; lowering the bank’s costs and reducing the time its employees spend on appraisals; and creating a more transparent experience for banks and home buyers, so everyone knows the current status of the appraisal process.
And while banks have traditionally kept their own lists of appraisers they work with — often in an Excel spreadsheet, Denslow says — Reggora can give them access to more appraisers in a particular area, who might have more availability for a particular assignment. It also gives the appraisers access to work that may be more convenient for them. Denslow says that with Reggora’s software, “Appraisers can accept jobs just like Uber drivers.
They see on their phone that there’s a new job in this area; do they want to accept it?” For instance, if an appraiser already has a morning appointment in Medford, he or she might want to fill an empty afternoon with an appointment in neighboring Somerville.
Arlington-based Leader Bank started using Reggora’s software last year. President Jay Tuli says that in situations where a home buyer has had an offer accepted because they promised to close quickly, “as a lender, we may only have 15 days to approve the loan. A big piece of that is getting the appraisal back.” Tuli says his bank is now getting appraisals back “about three days quicker than we were in 2016.” There are several factors that helped shrink that timeframe, “but the efficiencies are partly attributable to Reggora,” he says.
Reggora will find itself competing with a more established business, California-based CoreLogic, which is publicly-traded, as well as smaller companies that handle certain steps of the home appraisal process. But Reggora’s investors are betting that it can streamline the process “in a way the incumbent players haven’t done,” says Peter Blacklow of Boston Seed Capital, an early investor in the company. (Blacklow was also an early backer of DraftKings, the Boston-based fantasy sports site.) And, Blacklow adds, there’s a potential for Reggora to collect enough data about the individual homes that the data could prove valuable to other companies — such as insurers that also need to appraise the property, or investment banks that are trading large chunks of home equity loans, so they can have “more insight into the quality of each individual loan,” Blacklow says.
Reggora isn’t the only local startup trying to upgrade the mortgage process. Own Up (formerly known as RateGravity) helps customers shop for the ideal loan with the best rate, and then generates a pre-approval letter they can use when placing bids on properties. It was founded by two former executives at Leader Bank, and the company collected $8.5 million in capital last October.
Notarize, based in Back Bay, has raised $44 million to make the process of notarizing documents digital — relying on web-based video chats with notary publics, ID verification, and live signing of documents. About half of the company’s business is related to mortgages, says CEO Pat Kinsel. It has been integrating its system with partners that include lenders, title companies, and other technology companies so that getting mortgage documents notarized can happen as part of their ordinary work flow.
Each of the startups is trying to come up with its own form of aspirin for the headache of home-buying. “If someone wants to do a residential mortgage, it takes 42 days to get it closed, when it should take 42 seconds,” says Barry Finegold, a managing partner at the Andover law firm Dalton & Finegold, and an early investor in Reggora. “But that’s not where the tech is yet.” Zitin and Denslow, he says, “saw an industry that is kind of outdated, and wanted to update it.”
Eventually, Zitin and Denslow may even be able to say they’ve been users of Reggora’s appraisal technology. But neither has purchased a home in Boston’s hyper-competitive market yet. “Both of us rent as of right now,” Denslow says. “But perhaps someday soon.”
Reggora is driving appraisal innovation with a modern, two-sided platform for mortgage lenders and appraisal vendors. Through advanced and configurable workflows, Reggora streamlines the entire appraisal process for everyone involved, while improving the overall borrower experience. Lenders and appraisers benefit from payment processing, automatic appraisal ordering, rule-based reviews, appraisal delivery, status updates, and more, creating unprecedented operational efficiency.
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