Having recently completed his third decade at the helm of a company that he says was one of the first movers in the outsourcing of real estate valuation services, PCV Murcor Real Estate Services president/CEO Keith Murray describes himself as a man who finds himself again—as he was at the outset of his career—with the right expertise at the right time. Only now his experience is deeper and his companies also have had time to develop what he sees as unique operational strengths.
In a market where accurate property valuation is extraordinarily essential and challenging, there is a great need for and heavy reliance on outsourcers in this space and many have flocked to the business. But Murray said his valuation company’s 30 years of intellectual capital in this area, including its proprietary Web-based technology and in-house data, distinguishes the company. He also sees it as distinguishing the real estate owned services outsourcer he owns, Carrollton, Texas-based Vendor Resource Management. While the latter is relatively newer and otherwise separate from the former, it does use the former’s valuation data from several business cycles to inform its work, Murray said.
While others in the space have expanded into other mortgage-related third-party services more removed from valuation such as title services, Murray said he does not want to dilute the specialized expertise of his business in this way. He feels this focus, combined with the company’s depth of experience and aforementioned technology/data resources, set his companies’ efforts apart from the recent rush to the business in the wake of HVCC.
During that time when many were rushing into his businesses’ space, Murray said he had to fend off potential buyers. He said he refuses to sell after putting 30 years of work into his operation and seeing now as a time when it is “finally starting to break through.”
That “first wave” has since receded as people have realized that the business “is not as easy as it appeared,” he said.
Those players have started to fall away, but he continues to see interest in M&A on the part of those who remain and want to consolidate their positions. Murray said while he is not interested in selling, under the right circumstances he might consider being a buyer.
In a market where many lenders have ended up with an inordinate number of distressed properties in many cases, price direction in housing has been largely uncertain in many areas, and real estate valuations are a key component to loan pricing, experience and operations time-tested by a number of business cycles like Murray’s are in demand, he said.
His companies currently work with a number of mortgage industry giants from both the public and the private sector, including Freddie Mac. Unfortunately, it is difficult to get influential companies and government entities like these to allow all but possibly limited comment on or from vendors for various reasons, among them confidentiality agreements and the precedent such comments might set, Murray said. “What I can tell you is that all of our relationships on both [the private and public sides] of the business were facilitated or part of an RFP response with competition, on the basis of our past experience. That’s how we got our opportunities.”
Today’s work with national industry giants is a long way from where Murray and his company was 30 years ago, running an appraisal business from his condo. But in terms of being in a situation where he was offering valuation expertise at a time when there was a sudden boom in need for it, there are some parallels between then and now.
“We started in 1981 not very far from where we are here, performing single-family and multiple-family appraisals,” said Murray. The company started in East Los Angeles County, handled “a little bit” of the San Bernardino-Riverside area and surrounding communities.
“And at that time, interest rates were in the high teens and I think they went from the high teens quickly down to 10%-11%. All of a sudden it was a great boom and I had a little company I started in my bedroom. We went from one appraiser, being myself, to having a few dozen.”
Roughly 10 years later, his company had gone nationwide and it was starting to develop its own technology.
Among the developments in the valuation space PCV may have had a hand in since then as it has grown are reconciliation products, according to Murray.
“Now reconciliation products are very popular and I’m not saying we created them,” he said. But he said the company was “very early” when it came to the process of taking multiple valuation opinions and writing a report that documented those products’ strengths and weaknesses in an effort to determine more accurately where a valuation should be.
He sees the story behind how this occurred as a good example of how the company works and why he feels it has done well.
“That was a default client who had a process in place for how they went about pricing their assets for disposition and they sensed maybe they weren’t capturing as much recovery as they could. So in consulting with them we developed a variation of one of our existing…products and then they ultimately independently tested the work we did on a pilot program vs. what they were doing and found that, on average, they were selling their assets for $10,000 more using our values.”
Murray said the company later admitted it tried to duplicate his company’s results using a similar approach involving hiring its own appraisers directly but, when it could not, became clients again.
“If I were to say what’s the difference, I would say our historical perspective and the fact that we have a sister company that has boots on the ground in all the major markets across the country that is actively negotiating transactions and that willingness to collaborate,” he said. “It makes us smarter.”
Such developments may have contributed to getting the companies to where they are today.
Going forward, technology in particular is a game-changer, said Murray.
Automation has helped PCV stay scalable through its various business cycles, Murray said.
Technology also is used by Murray to ensure that in a disaster situation the company can continue operating remotely with workers. This is something the California staff recently tested by leaving the work site and operating the business from a “bunker” elsewhere temporarily, he said. The Texas staff also has had experience operating remotely. This past winter when the weather was problematic, the staff had to work out-of-pocket off the company’s Citrix network. In addition, the validation of the business’ infrastructure is reflected by the SAS 70 audits it has gone through, Murray said.
Automation also has allowed the companies’ operations to be “paperless” for some time and operate efficiently with some consideration of the environment, he said.
While efficiency through outsourcing or working remotely can be helpful, Murray noted that the need for local knowledge when it comes to valuation has taken priority over it in some cases. For example, he does not “offshore” quality assurance work to that end.
“There’s lots of good reasons to do it from a cost standpoint. I just think it’s important to have people who have practiced for some time and in the marketplace providing the quality assurance piece.”
However, the company does work with some customers who “do use processing and different outsourcers, maybe an offshorer, to create requests for us to do work that hits our system at [for example] three in the morning on a Tuesday,” Murray said, noting that he does see an advantage in the ability to get information into his companies’ hands efficiently in this manner.
“We have customers that have certain parts of their tracking and ordering pieces that they run from different parts of the world,” he said.
In another example of what he sees as a mutually beneficial professional partnership, Murray also noted that for the past two-and-a-half years VRM has been working with and sharing some its expertise with real estate agent partners that provide BPOs, even those that work for some of the competitors in its space. It does this through its training arm, VRM University. The seminars are aimed at giving real estate brokers a better sense of how to produce accurate valuations and work with corporate sellers.
Murray said he offers discounts for the training to three minority trade associations’ members “because we find from an REO disposition perspective minority communities have been disproportionately impacted by the crisis. So we want to make sure the practitioners in those marketplaces have the requisite skills to work with the corporate sellers.”
Concern for the community also manifests in the company’s corporate culture and code of ethics, which ensure appraisers, for example, are in compliance with rules like USPAP, Murray said.
“We talk a lot about it here at PCV and VRM. Each asset that we touch, whether it’s a new home opportunity where it’s somebody buying a home or an origination or a property that we’re listing, represents a family in a community, and we do everything we can to try to stay connected. It’s not just an order number. It’s not just a widget that we’ll process.
“We don’t have an agenda at all other than making sure that we’re accurately reflecting what’s there [as far as the home value],” Murray added. “The biggest concern I think anybody that’s providing a value someone’s going to rely on to make a disposition is, you don’t want to hurt the community because you weren’t accurately analyzing what’s going on there correctly.
“That’s just the philosophy in my mind: If you go and you try to do the best thing, the money will come, if you take care of your people and do all of those things, if you can do some good things in the community. From that perspective both companies are heavily involved in philanthropic causes both at the local level and at the national level.
“You don’t get to be around 30 years if you’re not doing the right thing,” he said.
