Desktop and Drive-By Appraisals: Helpful Or Harmful?

One of the most critical aspects of buying or selling a home ultimately comes down to the appraisal that is performed just before a transaction is finalized.

Sometimes people order their own independent appraisals. In other situations, it is mandated by a buyer’s financial institution to help prevent them from overpaying on a piece of property. Regardless, this process sees an objective third-party make an assessment of the fair market value of the home based on its current status and other conditions, all to make sure that everyone is on the same page about what is about to happen.

It’s a process that is useful for a wide range of reasons that go beyond stopping someone from spending too much on a new home. It’s a crucial part of the process of getting a home equity loan, for example. It’s also useful in terms of appealing property tax assessments, among other reasons.

Yet at the same time, not all appraisals are conducted equally. There was a day when they were almost exclusively conducted by having a trained professional come out to a home and make a visual assessment of its current condition. Over the last decade in particular, desktop appraisals and drive-by appraisals have become very popular for a number of reasons that are worth exploring.

The Art Of Desktop And Drive-By Appraisals

A drive-by appraisal, as the name suggests, involves a situation where someone will conduct what is essentially an “exterior only” appraisal. Rather than physically entering the home to take a look around, they’ll just look at the outside to determine the property’s value. Sometimes they don’t even have to get out of their car to do it – hence the name.

This is similar in concept to a desktop appraisal, where someone might not even pay a visit to the property at all. Here, they’ll use data compiled via the Internet – along with other information about the local market – to try to come up with the most accurate determination of the property’s value that they can.

To be clear, a drive-by or desktop appraisal is still exactly that – an appraisal. Someone who is passionate about their work is still trying to come up with the most accurate assessment of a property that they can.

It’s just that they take a different approach and make this determination using different information. Obviously, someone who is conducting a drive-by appraisal isn’t going to be able to tell if there are major issues inside the house. But they’ll still likely take pictures of the home and make detailed notes of its current conditions.

They’ll also probably take a trip through the neighborhood to paint a vivid picture of things that could positively or negatively impact property values – like the conditions of similar homes and even the quality of things like local schools.

Comparable sales, also commonly referred to as comps, will also be utilized throughout this process – as they would be in a traditional appraisal. Homes that are similar to the one in question that recently sold will understandably have similar fair market values, which is why all of this is used to make a final determination.

But Are They A Positive Or A Negative?

In terms of whether or not desktop and drive-by appraisals are helpful or harmful, the answer is a resounding “it depends.”

Any appraisal professional that is to be trusted will use all information available to them to come up with the most accurate estimate possible – no exceptions. It’s just that obviously they don’t have as much specific information about a property to work from as they otherwise would.

One situation where desktop and drive-by appraisals proved beneficial was during the COVID-19 pandemic, when it wasn’t possible to physically enter someone’s home out of fears of safety. This important work still had to be done and professionals were able to develop techniques that allowed them to do so as accurately as possible.

Likewise, with all of the information that appraisers have to draw from – including tax records, public records, MLS listings and more – it’s still possible for them to come up with an accurate estimate of what a home could reasonably sell for.

Is there always the potential that they could miss something big on the inside of the house? Of course – but these situations aren’t nearly as common as people sometimes believe.

In the end, desktop and drive-by appraisals aren’t necessarily the preferred way to do things – but they do still yield accurate results when conducted properly.

To learn more about the intricacies of desktop and drive-by appraisals, or to get answers to any other specific questions that you may have, please don’t hesitate to contact AmeriMac today.