If you’re thinking about refinancing, selling or buying a home, your lender may require an appraisal. An appraisal provides an assessment of the property, ultimately determining the fair market value (FMV) of the home. That will help determine how much a lender will let you borrow. These days, you may come across a few different appraisals, one being a desktop appraisal.
Read on to learn more about desktop appraisals, the pros and cons of them and how a desktop appraisal differs from an in-person appraisal.
What Is A Desktop Appraisal?
A desktop appraisal is when an appraiser completes a valuation using information delivered online rather than during an in-person property visit. They use info such as local property tax assessment records and multiple listing service (MLS) data.
This gives you the chance to get the property valuation associated with a home appraisal, but you don’t have to worry about scheduling someone to check out your house. It can streamline the process for both sellers and potential buyers. This can make the appraisal process cheaper and faster under the right circumstances.
Desktop Appraisal Vs. Hybrid Appraisal
A desktop appraisal shouldn’t be confused with a hybrid appraisal, which involves a third party visiting the property and passing the information to an appraiser to complete the report.
It’s also not an electronic appraisal or automated valuation process. The appraisal opinion is delivered by a licensed appraiser.
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The Role Of Desktop Appraisals In Real Estate
Desktop appraisals have more than one role when it comes to real estate. The following are a few examples of when to use a desktop appraisal:
- Mortgage servicing: Mortgage servicers do occasional appraisals. The most common occurrence is when mortgage insurance premiums are removed when the borrower reaches a certain percentage of home equity.
- Home equity lending: Desktop appraisals may be used to evaluate a borrower for a home equity loan or home equity line of credit.
- Portfolio evaluation: If you’re a bank or investor with tons of real estate on your books, a desktop appraisal can determine the worth of your investment without sending someone out to each property.
However, if you’re buying a home, you’ll need a full appraisal because of concerns like incomplete data. Additionally, Fannie Mae and Freddie Mac guidelines don’t currently allow refinance appraisals to be completed from a desk.
Pros And Cons Of Desktop Appraisals
When it comes to using a desktop appraisal to help buy or sell a home, it goes well beyond the appraiser looking at the floor plan of your house. They still must compare the home against similar properties in your area and write a full, well-reasoned report.
Desktop appraisals have benefits as well as downsides. Let’s run through these so you have a better idea if a desktop appraisal is right for you.
Desktop Appraisal Pros
There are several advantages to a desktop appraisal, including the following:
- Cost savings: Because an appraiser doesn’t have to travel to your property and evaluate it, desktop appraisals tend to be cheaper, costing $75 – $200. Depending on where you live, a full appraisal might cost $600 or more.
- Streamlined process: Because there’s no in-person inspection, the appraisal can get done faster and allow you to get to the closing table.
- Convenience: You don’t have to coordinate schedules in anticipation of someone coming to the house.
Desktop Appraisal Cons
Despite the benefits of desktop appraisals, they also have a few drawbacks as well:
- Run-down properties: If you’re evaluating solely based on the data you have about a property and not looking at its condition, there’s less visibility into how well the property is maintained and the problems it may have. This could be concerning to potential
- Recently renovated property: If the property has upgrades that haven’t yet been reflected in publicly available data, an appraiser might not grasp the value of your home. This could lead to a low appraisal.
- Incomplete data: In a lot of cases, mortgage investors may require data that isn’t available for a particular property. If that data can’t be easily collected, a desktop appraisal may be impossible.
Desktop Appraisal FAQs
Below are a few frequently asked questions regarding desktop appraisals.
How long do desktop appraisals take?
Depending on the appraiser and if they require any photos or relevant documentation, some desktop appraisals can take just a few minutes. Although, you should expect the whole process from start to finish to take one or two days.
How are desktop appraisal forms different?
The main difference between a desktop appraisal form and the one used in a full appraisal is that the desktop form leaves out actions that require an in-person inspection.
A full appraisal requires detailed notes about a property’s condition often accompanied by photos. A desktop appraisal, on the other hand, relies strictly on publicly available information.
Should I get a desktop appraisal?
In many cases, where a desktop appraisal option could make sense, a lender will choose it for you. However, as noted above, lenders may not offer them because they aren’t as accurate about the property’s condition.
On the plus side, desktop appraisals provide the possibility of saving time and money.
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The Bottom Line: A Desktop Appraisal Can Offer Modern Flexibility With A Few Caveats
A desktop appraisal involves putting a value on your house with documentation like tax assessments and other public records. It can be more convenient and cheaper because there’s no in-person visit. On the other hand, it doesn’t give buyers good insight into properties that have been renovated or haven’t been kept up.
Kevin Graham
Kevin Graham is a Senior Writer for Rocket Companies. He specializes in economics, mortgage qualification and personal finance topics. As someone with cerebral palsy spastic quadriplegia that requires the use of a wheelchair, he also takes on articles around modifying your home for physical challenges and smart home tech. Kevin has a bachelor's degree in journalism from Oakland University.
