Kenon Chen

Clear Capital is a Reno, Nev.-based real estate valuation and analytics technology company that has served mortgage lenders since 2001. BankBeat spoke to Kenon Chen, executive vice president of corporate strategy, about what valuation analytics look like in a changing marketplace.


It’s a new world now. How is technology changing in the real estate industry?

Kenon Chen: The recent happenings in the world have certainly accelerated the digitization of all kinds of processes within real estate and finance. I think the biggest challenge is for tech solutions to be more human centered. It is not enough for an app to present someone with data, it has to present context and confidence in that data as well. It has to allow humans the ability to experience data like they gathered it themselves.

What sorts of tools help community bankers track real estate valuations?

K.C.: Analytics tools such as automated valuation models and analytics that highlight exceptions will be key for decision making. But expectations in performance and quality need to go up. It is no longer okay to use a model that only gets updated once a month. We have been working hard to ensure our models follow market changes, get updated frequently and use the freshest data. There are too many tools out there that simply are behind because of legacy technology. 

How do mortgage lenders deploy tech to overcome social distancing?

K.C.: Obviously there are a number of areas like modern point-of-sale tools, eClosing and remote notarization, that are taking center stage to enable lending without direct human interaction. Our focus during this time has been on improving the appraisal process, and providing additional data and tools to lenders and appraisers that support physical distancing. In addition to analytics, we created a free service called OwnerInsight that guides homeowners through an appraisal inspection using their mobile device.  As large lenders are leveraging these tools to enable lending to continue, community banks should be aware of them as well and vet out their effectiveness.

Back to analytics. What are the beacons that guide analytic design?

K.C.: We think first about the quality and completeness of the data itself. We have spent a lot of time building unique, proprietary data sources around housing in the United States, which gives us the foundation to create accurate analytics. Second, it is one thing to produce an accurate result, but it is quite another to provide the context and confidence to explain why that result should be trusted. Anyone can hide behind marketing language that makes their analytics look like they perform, while hiding their outliers. We want lenders who are making loan decisions to be able to trust every result we send, because every decision matters. So explainability is important to us. Lastly, we learn a lot by using our own products and models and listening for problems. It is so helpful to have a services side of our business in addition to analytics. We get invaluable feedback.

What are some things real estate analytics get wrong?

K.C.: Unfortunately, a lot of real estate analytics have been focused on getting a great marketing result through high hit rates, rather than making it clear where they are less confident about the accuracy of the result. On the other hand, the rapid embrace of using machine learning and AI improves accuracy but doesn’t provide a lot of transparency — the “how” behind the result. This doesn’t mesh well with helping local real estate experts get smarter or infuse their experience. Given the current uncertainty, we need tools informed by real boots on the ground expertise.

What does the future look like?

K.C.: While the COVID-19 pandemic has accelerated the urgency of certain technology solutions, many of these solutions were already in motion pre-crisis. The continued merging of automated valuation models, external inspections and interactive property analysis tools have shown to be the direction the valuation process is headed, even post crisis. Investigating these tools now while there are temporary flexibilities can give community bankers a permanent competitive edge in the future.

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