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Should You Use a Desktop Appraisal?

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Desktop appraisals are one of many alternative valuation products that are on the rise. And while they’ve been around for a while, desktop appraisals are gaining popularity due to their ability to meet the growing need of lower-cost appraisal options that many lenders are facing.  

What You Need to Know About Desktop Appraisals and How They Work

Desktop appraisals get their name from the way they’re completed because appraisers compile the report right from their desk. Since the core of work is research rather than a physical inspection, desktop appraisals tend to put out a less extensive writeup.

While they don’t provide as much detail, the information desktop appraisals do provide still gives valuable insight into a property’s value — and it’s done quickly and at a lower cost. It won’t be as exact or as thorough as a full inspection, but these alternative types of appraisals are still helpful when lenders are looking at loan servicing or evaluating their portfolios.

When they’re working on a desktop appraisal, appraisers will look at property tax records, data within a multiple listing service (MLS), public records, Google Maps images, or even information that an inspector shares with them. On top of the information they’re able to find on the property, appraisers will also rely on nearby home sales to determine the property’s estimated value.

When Should You Use a Desktop Appraisal?

Due to the fact that desktop appraisals don’t need a physical inspection, they’re not the best fit for every property. For example, if a property is in an unstable neighborhood that sees frequent foreclosures, or it’s known that the property isn’t in the best condition, a desktop appraisal can be difficult to complete.

Since these appraisals rely primarily on available data, they may not be the best option. For homes that are in poor or highly upgraded condition, the info an appraiser is able to pull from public records might not be current. Typically in these situations, full appraisals are the better option to ensure that the report is accurate and up to date.

Full appraisals are also better for homes that are in neighborhoods that don’t have a lot of comparable sales data to pull from. For example, homes in rural areas tend to have few neighbors, and the lack of data makes it challenging to develop a valuation estimate.

Where desktop appraisals are helpful is for average homes in established neighborhoods that include plenty of sales data to look through. When a desktop appraisal is used in areas like these, the key benefit that many lenders gain is the cost savings. Since there’s usually no field inspection, it’s common for desktop appraisals to be less expensive than a traditional full appraisal.

The other benefit that lenders are drawing from these alternative valuation products is the speed. Desktop appraisals are completed faster and bypass many of the challenges that can slow down a full appraisal, like travel time and communicating with property owners or realtors.

If you’re looking to gather information on a property or want to determine where a potential valuation might stand, a desktop appraisal can be a helpful resource.

Interested in seeing how desktop appraisals can work for you? The Dwellworks lender appraisal team offers high quality, efficient work that meets your needs. Get in touch with us today to learn more about the services we offer or start a trial period.  

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