Partner FundsCashmere FundInsights
If you’ve ever gotten a mortgage, you’ve gone through the appraisal process. Your appraisal probably took about two weeks to complete–two stressful weeks that you could have spent in your new home. True Footage, a modern appraisal company, gets appraisals done in six days. And they’re only getting better and faster.
Leveraging the latest real estate technology, True Footage has built a residential appraisal company serving appraisers and lenders all over the country. They’re already the largest in the US, operating in 32 states and counting. We’re excited to back them as they expand into new markets and work towards profitability.
Until recently, appraising a home was an incredibly manual process. A qualified appraiser would show up to your house, spend a few hours inspecting and physically measuring it, then go back to their office and come up with an estimated value. The current industry average for this whole process is 15 days and can even take up to a month, according to Opendoor.
The lengthy wait times are partly due to the labor shortage and inefficiencies of staffing appraisers. In the wake of COVID, there haven’t been enough appraisers to keep up with surging demand in home refinancing. Even as the market has cooled, millions of appraisals are needed every year for both mortgage providers and other situations like divorce and estate planning. Appraisers and lenders both need a platform like True Footage to help streamline the process.
True Footage is building workflow software from inspection to desktop to improve efficiency and objectivity of the appraisal process. For example, with True Footage software, appraisers can map 500 square feet in just 60 seconds—a process that manually takes 30 minutes. This makes the appraisers more productive, allowing them to generate more revenue.
For “desktop appraisals,” where the appraiser does not actually visit the property, True Footage has acquired best-in-class machine learning tools. These tools are integrated with MLS systems containing data for properties all over the country. Applying machine learning technology has led to significant time savings and increased accuracy for desktop appraisals.
True Footage is taking over an entire industry and bringing it into the modern era. Their revenue shows promise, and we believe this business will stay relevant for years to come. When it comes to why we invested, we’re compelled by the excitement of lenders, the market, and the founder leading the company.
Lenders are clearly responding to True Footage’s offering: the company has over 15x’d their annualized revenue in the past year, even with interest rates rising. Loans close faster with True Footage, which speeds up operations for lenders and reduces the risk of losing deals. Faster loans mean more appraisals, and more appraisals means more money for everyone involved.
Historically, 76% of appraisers have been sole proprietors who rely heavily on appraisal management companies to source work. More than half of these appraisers are over the age of 60 and retiring soon, and they aren’t getting replaced quickly enough to keep up with demand. On top of the staffing issues, regulatory changes and innovation on the lender side has created demand for better appraisal service. True Footage has already captured that demand by quickly becoming the largest appraisal company in the US.
John Liss, the CEO of True Footage, has been passionate about real estate for his entire life. He first earned his realtor license at the age of 18, and later conducted his thesis on real estate and brokerages while attending Harvard University and then Harvard Business School. His prior work experience is in the financial markets, primarily in the real estate vertical. He’s the perfect person to modernize the appraisal industry.
True Footage has made an impressive foray into the appraisal industry after operating for less than two years. This new round will enable them to grow in new states and take advantage of a buyer’s housing market: fast appraisals will be more important than ever and appraisers will be looking to join firms on the forefront of innovation. We look forward to following their growth trajectory as they bring this industry into the modern world.
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