If you’re familiar with the latest real estate tech trends, you’ve probably heard a lot about hybrid appraisals. But what exactly is a hybrid appraisal and how does it differ from the traditional appraisal process? In a generation of tech savvy home buyers, hybrid appraisals are gaining popularity and an increase in demand due to their low-cost and quick turnaround. If you’re thinking about getting an appraisal, read on to learn more about the hybrid option and see if it’s right for you.
What Are Hybrid Appraisals?
A hybrid appraisal, or exterior appraisal, is a valuation of a property completed by an appraiser who has never visited the property. Hybrid appraisals must be completed by a licensed or certified appraiser, and can include a third-party real estate agent, property inspector, or a real estate appraiser.
How Is A Hybrid Appraisal Different From A Desktop Appraisal?
Historically, appraisals are known to be an important part of a real estate transaction done in person by an experienced appraiser. But as technology has improved, many processes have been simplified using the internet. Both hybrid appraisals and desktop appraisals have utilized technology to make the process faster and more efficient. Hybrid and desktop appraisals have shorter forms than a traditional appraisal, and they are performed at a desk by an appraiser who has never visited the property. The main difference between a hybrid appraisal and a desktop appraisal is that hybrid appraisals use big data provided by a third-party inspector to conduct an inspection. This information can include market data, charts, graphs, or a market analysis, often found using an algorithm or mathematical modeling tool.
What Data Is Collected During A Hybrid Appraisal?
Both general data and specific data is collected during a hybrid appraisal. General data includes all real estate information on a macro level, ranging from market value to social and economic forces affecting the listing. Conversely, specific data focuses on a single property which can include details about the property and local market characteristics. These two types of data are collected through the appraiser’s first-hand knowledge and other information collected by third-party sources. But, hybrid appraisals rely heavily on information conducted by third-party sources.
What Are Hybrid Appraisals Used For?
Hybrid appraisals are most commonly used for mortgage and servicing purposes, not for purchasing or refinancing. The most common uses of hybrid appraisals include updating a loan value, assessing how a loan is performing, or in the case of pre-foreclosure or foreclosure.
Why Are Hybrid Appraisals Popular?
Hybrid appraisals are becoming increasingly popular because they are faster and more affordable than other types. This allows home buyers to save time and money during the appraisal process
Hybrid appraisals can also benefit appraisers by making better use of their skill sets. Instead of having them drive out to take measurements and photos, appraisers can stay at their desks and focus on performing valuations, higher level work, and analyzing the property.
Should I Get A Hybrid Appraisal?
While a hybrid appraisal might seem like the best option for you, it’s important to be aware of their risks. Some hybrid appraisals can offer extensive information to home buyers, but others may be misleading or inaccurate because they rely on third-party data. Most markets have plenty of data which allows for a strong hybrid appraisal, but other markets may lack data. Ultimately, the quality and amount of data will make or break a hybrid appraisal. All home buyers want a credible appraisal, so it’s important to research hybrid appraisals within your target market and choose what type of appraisal works best for you and your needs.
With all technology comes experimentation with trial and error. Regardless of what type of appraisal you prefer, hybrid appraisals will continue to gain popularity in today’s tech-focused world. Hybrid appraisals will continue to innovate and improve so they can meet the needs of home buyers and appraisers.
In the meantime, contact a real estate expert to learn more about appraisals or the real estate buying process.
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