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How Desktop Appraisals Will Change Real Estate

Updated: Nov 21, 2023

How Desktop Appraisals Will Change Real Estate

The COVID-19 pandemic closed the doors to workplaces worldwide, plunged society into an unplanned experiment in work from home. With this involuntary push into the future, the real estate industry has faced revolutionary changes. As of March 19th, 2022, another core component of real estate has gone remote: appraisals.

How are appraisals changing?

Starting in March 19th, Fannie Mae began to accept desktop appraisals. A desktop appraisal is relatively self-explanatory—the appraisal is done from a desk rather than the property. The property valuation is completed using data sources like public records, mined data, property condition reports, tax records and information included on the multiple listing service (MLS). A desktop appraisal goes one step further than a hybrid appraisal, which is an appraisal process that involves a third party (usually another appraiser or a real estate agent) completing the in-person inspection on behalf of another. This report is then utilized remotely for a final valuation. Even with this, however, someone still visits the property in-person. Desktop appraisals eliminate the need for visitation—something that honestly makes sense with the advances we’ve seen in real estate technology over the past few years.

How will desktop appraisals be used moving forward?

Last year, the FHFA announced desktop appraisals to become a norm in 2022. Desktop Appraisals were initially introduced at the time of COVID. The upcoming changes will now give a licensed appraiser the leverage to complete an appraisal report right from their desk. The policy initially intended to expedite the appraisal process for Lenders and Appraisers to eradicate the hurdles faced by Lenders upon turnaround times and Appraisers upon traveling and coordinating with the property owners. In the past, desktop appraisals were generally only accepted under circumstances like for a home equity loan or portfolio evaluation where small inaccuracies could be overlooked. So that begs to ask the question are these appraisals reliable?

Certain expectation and requirements still exist for these desktop appraisals to carry the same acceptance in quality as in-person appraisals. The appraiser must have sufficient information to develop a credible report.These qualifications are as follows:

  • Reported on Form 1004 Desktop, which has specific alterations from the traditional Appraisal Form through verbiage and questions to ensure trusted research and source for valuation. The appraiser can fetch the data from third-party sources e.g., homeowner, realtors, builders, MLS, etc

  • There is a mandatory floorplan requirement for performing desktop appraisals. This cannot be a sketch. The floorplans need to be performed according to ANSI standards (Z765-2021 (American National Standards Institute). In light of these events, there has been a growing interest from the appraisal companies towards autonomous floor plan generation software.

That’s it. As long as credible sources are used and an accurate floorplan is included, a desktop appraisal can be completed. Yes, it is that simple. With modern technology, all the information required can be at an appraiser’s fingertips in just seconds and incredibly accurate floorplans can be generated with minimal effort.

When to use a desktop appraisal?

Desktop appraisals come with many benefits. They are cost effective, time effective, and rid the process of any biases or pandemic restraints. There are certainly times, however, where a traditional appraisal would be advantageous versus a hybrid or desktop appraisal. Poorly maintained properties, recently renovated properties, or properties with a lack of public information are all circumstances where in-person visualization will be important. In any situation where someone can contest the properties valuation, it may be a safer move to conduct a traditional valuation. Outside of this, a desktop appraisal is quickly becoming the next best bet! Professional consultation is always recommended as anyone prepares to receive a property appraisal. Real estate agents, experienced lenders, or attorneys can provide guidance for individual circumstances.


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