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Accurate New Home Appraisals Are a Critical Priority

2 Source: NAHB Housing Market Index - Special Questions on Most Significant Issues Builders Face, January 2015

69%   68%  58%   58%  

49%  

0%  

25%  

50%  

75%  

100%  

2011   2012   2013   2014   2015(e)  

Percent of respondents

Over 50% of NAHB Respondents Identify Inaccurate Appraisals as Most Significant Problem Builders Face

3

A History of NAHB Involvement and Leadership on Appraisal Issues •  Began in 2009, Immediate Past Chairman Sandy Dunn and Chairman Joe Robson held Appraisal Summits.

Appraisal Working Group (AWG) Formed in 2012 •  Co-Chaired by NAHB Chairman Barry Rutenberg and Past Chairman Joe Robson - 2012

•  “A Comprehensive Blueprint for Residential Appraisal Reform” - February 2013

Identified increasing available data to improve the accuracy of new home

valuation by appraisers as a key priority

RFI/RFP with Industry-Leading Data & Technology Companies

Final Recommendation & Appraisal Task Force (ATF) •  Proposing strategy to partner with HouseCanary

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Objectives for NHCD

More accurate new home appraisals

Additional data provided to those members who participate

NAHB and member groups generate non-dues revenue

4

HouseCanary Team In Attendance

5

Partner & Managing Director,

The Boston Consulting Group

•  Led Homebuilding & Real Estate

•  Deep experience advising Fortune

500 & PE firms

Prior

•  Marakon Associates

•  Arthur Andersen (CPA)

Education

•  MBA, Wharton, University of Penn

•  BS, USC– Summa Cum Laude

Jeremy Sicklick CO-FOUNDER & CEO

PhD Candidate, Applied Statistics,

University of Texas at San Antonio

•  Dissertation Topic – Dynamic Models

of Financial Risk

•  Other Research– Bayesian Hidden

Markov Models, Bayesian Decision

Theory, Dynamic Time Series

Prior

•  California Economic Forecast

Education

•  MA, Economics, UC Santa Barbara

•  BA, Economics, UC Santa Barbara

Chris Stroud CO-FOUNDER &

CHIEF OF RESEARCH

Regional Vice President, Strategic

Marketing, PulteGroup

•  Led strategic planning and

acquisition underwriting

•  Emphasis on decisions through

data-driven decision-making

Prior

•  Hewlett-Packard

Education

•  MMC, UGA – Magna Cum Laude

•  BSBA, UTulsa – Cum Laude

JP Ackerman PRESIDENT, STRATEGIC REAL

ESTATE PRODUCTS

Vice President, Product

Management, QUMU

•  Managed product roadmap,

business case analysis, product life

cycle for twelve products

•  Achieved product leadership

position in Gartner Magic Quadrant

Prior

•  NCAST

•  Cable & Wireless

Education

•  MBA, Fuqua, Duke University

•  BA, Economics, UC Santa Barbara

Chris Zaloumis VICE PRESIDENT,

PRODUCT STRATEGY

HouseCanary Overview

6

The most objective, consistent, and

efficient way to appraise homes

The most advanced tool for

real estate professionals

Silicon Valley, CA based

Big data tech &

analytics for real estate

Deep experience

building and managing

data-driven software

7

All in one from an iPad •  Communication •  Data integration: Market data, property data, maps •  Photos, Property measurement •  Comp analysis, adjustments, valuation

Flips the focus onto value

•  From 90% time on form filling to 90% focusing on appraising value & risk

Scientific analytics at your fingertips…no PhD degrees needed

•  Valuation and quantified comps analysis

•  Analytically derived value adjustments

•  Value drivers and hierarchy

Leave your work at the job site

•  Enter the site, do what you need to, submit in just 30 minutes

Seamless, paperless integration

•  Links to UADP forms in MISMO format

•  All mobile, all paperless, all stored in the cloud

•  Platform is 'form' agnostic, streamlining the production of alternative valuation products

New Home Construction Database (NHCD)

8

Feedback Loop creates increasing value and sustainability of solution

Better Investment Decisions

•  Location

•  Land Investment

•  Product Design

•  Pricing

•  Demand / Absorption

•  Competition (active / future)

Better Appraisal & Valuation

•  Comps for Appraisals

•  New Home Valuation

•  Content Valuation

•  New Home Marketing

•  Data Feed Sales

Better Manage the Business

•  Build Schedule

•  Lot Premium

•  Options

•  Cycle time

•  Sales

•  Cash flow

NHCD & Absolutes for Success

9

þ  Builder-centric tools that add value

þ  No duplication of effort for builders

þ  Timely distribution of new home closing data

þ  Incentives to adopt among members / NAHB

þ  Sufficient coverage of comparables for appraisers

þ  Streamlined delivery of closing data to appraisal community

þ  Data security through anonymization, encryption and audits

NHCD Will Continuously Improve With New Data

10

Integrated NHCD Tool Better

Investment Decisions

Better Manage Business

Better Data With NHCD Database

Better Appraise

New Homes

Better New Home Information

11

When will we see impact? Begin seeing in ‘16

Full impact in ‘17

2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52

Full Project Rollout

12

Jan 2015 Dec 2015

Phase 1

Phase 2

Phase 3

4 weeks: Architect, test w/users, design

2 weeks: Spec, plan, and define MVP

4 weeks: Development and testing

1

2

3

4

5

6

7

8

LIVE  

LIVE  

LIVE  

LIVE  

LIVE  

LIVE  

LIVE  

LIVE  

10 weeks per module

•  Establish a user panel to optimize design in beta phase

•  Project broken into smaller chunks

•  New features going live on an ongoing basis

•  HouseCanary will partner with local HBA’s to train

NAHB  USER  INPUT  ON  DESIGN  

Jun 2015

NAHB & HouseCanary Help Members Save

13

•  Reduce gap in new home appraisals

•  Optimize the product built and features within to

maximize pricing power

•  Optimize timing of investments geographically to

maximize returns and mitigate losses

•  Increase efficiency of marketing, sales and

procurement of building materials

•  Enhanced management tools to save time and enhance

productivity

Improved Appraisals

Enhanced Positioning

Improved Land Investments

Materials Market Place

Management Efficiency

A Large Revenue Share Opportunity for NAHB

14

•  Fee per record from NHCD and increased share from new homes appraised using HouseCanary Appraiser

•  Shared revenue from derivative product sales via Blueprint. Scalable product live Q4 2015.

•  License fees for non-participant builders and users

•  $42B market. Building framework to market and source materials. Revenue share on all member transactions

Appraisals

(Non-Participating)

Materials Market Place

NAHB Members Win

NAHB Win

Appraisers Win

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Appendix

16

About HouseCanary

NHCD Design Details

NHCD Timeline and Support

NHCD Benefits