Desktop appraisals are trending this month and it’s no surprise why. While they have been a product appraisers have offered for quite a while, it been a rare occurrence to have them ordered on the lending side, until now.
A large portion of an appraisal process is based off 4 of the 5 senses (we don’t typically utilize taste). Our site observations influence the comparable sales chosen and ultimately affect the determination of fair market value.
A desktop appraisal, is just how it sounds. An appraisal completed from our desktop. We do not enter the property. We don’t even drive-by it. But we interpret the data presented to us to formulate an opinion of market value. The big questions are: can we really gather the data needed to deliver a credible report without ever entering the subject? Does our client have confidence in the findings we are reporting.
During the onset of the pandemic, many appraisers could not enter people’s homes. Whether this was due to the seller’s discretion or the appraiser’s, an inspection or sorts was still needed to verify the home was indeed present, and it was of good collateral for the loan.
At that time, we pivoted right along with the assignments requested. Desktops or drive-bys were a regular occurrence. We were scheduling many of our appointments into two separate slots. One to verify the subject and measure the exterior, and another to zoom with the contact as they led us on a remote walkthrough of their home. Extra time was taken to validate tax records, MLS photos, and other streams of data.
Reports on a whole took a bit longer, mostly because gathering adequate and accurate information simply took more time. Verbiage was added to our disclosures making the intended user keenly aware that we never actually entered the property.
Call it what many think is a post-covid potential opportunity, Fannie Mae decided that starting this year, they would adopt certain qualifications that would give the lending institution the ability to order a desktop appraisal. The thought is this may decrease the turnaround times on appraisal reports and help to serve more rural areas that many appraisers don’t service.
It will be interesting to watch what happens next. Which lending institutions will be ordering this product? Who will be responsible for giving us the data we need? How will we verify it is credible? What technologies will be available to best assist with the process? What if we determine we cannot verify the data is accurate.
All questions to consider and we are right alongside you guys, popcorn in hand, as the future unfolds. We’ll see you out there! Or maybe just from our desktop.