Desktop Appraisals: Everything You Need to Know

One of the most important parts of the home buying process has to do with the appraisal – something that is true for a wide range of different reasons, all of which are worth exploring.

For starters, appraisals are required by nearly all mortgage lenders out there – meaning that you’re not going to get approved for a loan without one. During this process, an impartial third party who is trained and certified will come to the home, assess the current condition and use a variety of data points to come up with a fair market value.

They’ll use all the information they can find including not only the current condition of the home but also the recent sales of similar homes in the area and more. They’ll consider the neighborhood, the current conditions of the market and more – all in an effort to come up with the most accurate estimate of the home’s value that they can.

But what happens if someone cannot physically enter a home to conduct an appraisal? This was the question posed to many real estate professionals in 2020 during the onset of the still ongoing COVID-19 pandemic. Even though it wasn’t necessarily safe to enter a stranger’s home, these hard working men and women still had a job to do.

That, in essence, is why desktop appraisals became so important. They’re a bit of a transition from the way things are normally conducted, but they’re also valuable in a host of different ways.

Desktop Appraisals: An Overview

As one might assume, a desktop appraisal is exactly what it sounds like – one that is done in the office, at a desk, without ever leaving said desk. Meaning that the appraiser never makes an in-person visit to the property in question at all.

These appraisals are conducted exclusively via third party information – but that doesn’t mean they’re not accurate. Yes, it’s true that there could be significant issues impacting a home’s value on the interior that the appraiser is missing, but they’re still doing their best to paint the most vivid picture possible regarding exactly what they’re working with.

Among other information they’ll use data from MLS listings, public records and even resources like Google Maps to understand the current situation with a home and which factors may be impacting its value. Keep in mind that even with a desktop appraisal, only licensed and certified professionals can perform them – meaning they’re still using their education, their experience and their intuition to come up with the most accurate value that they can.

The Ins And Outs Of Desktop Appraisals

The major difference between a desktop appraisal and a more “traditional” one is that the former is completed without any physical inspection to speak of.

In a more traditional appraisal, a professional would enter the interior of the home and take detailed photographs, among other things. They would measure rooms to come up with accurate dimensions and they would assess any modifications that have been made, among other factors.

In the situation of a desktop appraisal, these professionals aren’t really working with any of that information. They’re relying on, among other things, information that has been self-reported by the person who is selling the house. Yes, it’s possible that they could miss something significant – but these situations are actually rarer than people assume.

Desktop appraisals tend to work particularly well in developments where the homes are very similar – think planned communities where all the houses have similar layouts. In a recently new development, for example, it stands to reason that a lot of the homes would share certain properties in terms of their condition, floor plans and other attributes. At that point, it would be easy to draw certain conclusions that would help shed insight into what the fair market value of a home might actually be.

Desktop appraisals are also ideal in situations where there are numerous comparable properties (or “comps” for short) to draw from. If you know the average selling price of a home in a particular neighborhood, and if all the homes in said location are relatively similar, you should be able to make an accurate, educated estimate of what the value of a property will actually be.

In the end, desktop appraisals may not be the most ideal way to conduct an appraisal in the real estate industry – but that doesn’t make them any less valuable. The COVID-19 pandemic showed us just how true that is, and they’re one trend that shows no signs of slowing down anytime soon.

If you’re interested in finding out even more information about desktop appraisals, or if you have additional questions that you’d like to go over someone with a bit more detail, please don’t hesitate to contact AmeriMac today.