I agree with Greg that Zaio is working to create a viable business plan. Acquisition of these other companies will help bring in revenue as they try to sell their valuation model to potential clients. Like Mike said, I think they are positioning themselves for the long haul, and I think they are in fairly good position to work within the guidelines of the HVCC, if the HVCC actually goes into effect.

However, they continue to post losses. For the first quarter of 2008 they had a net loss in sales of 1.5 mil, and a total decrease in cash and cash equivalents of 5 mil. Ouch is right, Rita! I wonder if the photographers being re-classified as employees will cause even more losses; usually if there is a re-classification, the company will have to go back and pay for overtime, and I'm sure the photographers have worked tons of overtime trying to reach their goals.

Yes, Zaio continues to puzzle me too. They have an interesting idea, but I think execution is flawed a bit, and I think that's why they have purchased some of these other companies to shore up revenue. There is still quite a bit of work to do for them to succeed. I think they need to rethink their street level photo advertising...Google offers that for free in many areas.

Frank - As long as they report the scope of the appraisal, they shouldn't have any USPAP compliance issues. Whether they do that or not, I don't know. The database will be very useful, and I wonder if they plan on using it with Real Info to improve the AVMs?

Denise - I agree. I don't know where all the capital come from, but they seem to have quite a bit of it. Although the stock price has plunged recently. They've recently entered into some agreements with large nationwide lenders, but who knows if that is for the Zaio product or for conventional appraisals through their acquisition of Appraisal.com.

Sara - I've posted at least once on your original blog...which has become it's own entity! I thought here I'd just try to post on the happenings of Zaio's business and not necessarily their method of appraising. The variety and number of business they have acquired is quite interesting. I thought they finally got some zones in AZ rolled out, but I could be wrong. Maybe that's why their stock price tumbled...no product in 5 years.

Shawna - I tried to get the conference call, but you have to have a username and login. This could yet be another reason the stock is tumbling. Or maybe they couldn't pay the photographers because they were too busy gathering change to pay the CEO his annual compensation of $510,000 ($210,000 plus a $300,000 bonus; a bonus for what I don't know, maybe the $1.6 Million loss for the first quarter)

On a side note, I found a link where you can remove your property from the database: Remove My Property

Sara - I'd like to know if they are getting all the addresses correct as well. Many of the photographers seem to be disgruntled, for lack of a better word. They have tremendous workloads for little pay, and Google is flying right by them with photos for free of many cities around the country. I think Google's method is faster, and you usually get more than one view of a property. The quality may not be as good, but I think timeliness would be more important for Zaio's annual updates. I'm sure the Google photos will probably be showing up on Zillow shortly. And, Microsoft Live Maps have great side-mounted aerial photos that have the quality, but not not the street view. With those two tools, who needs Zaio?

Gita - Let us know what you find out.

Kenneth - Zaio has been a big supporter of the HVCC. I think they are looking forward to more business through their AMC division to help keep them afloat. With declining markets throughout the country, I don't see how any lender would accept a photo that could be up to a year old. I'd rather use a more recent MLS photo than that. I think they'll need to come up with something better than their 2055 model to compete with actual appraisals. If they just want to compete with AVMs, then I think they have the right idea, but that is not the market, nor the pricing structure they are geared towards.

Zaio has always told their zone appraisers that any orders for conventional appraisals would be funneled to them if the order was in their zone. I don't think that would defeat the purpose of the HVCC, unless the loan officer and the appraiser had direct communication. An order going to a zone appraiser doesn't involve any direct contact between the loan officer and the appraiser in much the same way that the HVCC allows for lenders to set up separate appraisal departments to oversee appraisal ordering.

On a different note, Zaio just released their quarterly report and indicated that they don't have enough cash to take the rest of the zones life and may not be able to continue as an ongoing concern. Here is the quote:

"Readers are cautioned that the total remaining costs to bring a substantial number of the sold zones to live status over the next 12 months exceed the Company's current available cash resources. Continued operations are dependent upon the Company raising the necessary funds in the senior debt markets, subordinated debt markets and equity markets, and increasing sales and achieving profitability, but there is no assurance that this will occur. Accordingly, there is uncertainty regarding the Company's ability to continue as a going concern."

For the full quarterly report, go here:Yahoo Biz News: Zaio 

It was only a matter of time before Zaio had to stop operations with the losses they kept reporting.

Looks like Zaio has already started selling off assets. Day One, Apppraisal.com, and United Systems were purchased by ACI. I think that will position ACI to put some pressure on WinTotal, but I don't foresee Zaio coming back any time soon to resume operations.