What Is A Desktop Appraisal And How Does It Work?

The world continues to rely on technology and operate remotely, and home appraisals are no exception. During a traditional home appraisal, a licensed inspector will do an on-site evaluation of the property. The appraiser considers the condition of the home, floor plan and any necessary repairs. When the inspector is finished, they’ll compile a detailed report. Now, with the advancement of technology, an appraiser can do the appraisal without visiting the home. This is done through a desktop appraisal.

Some lenders may accept desktop appraisals in place of the traditional appraisal process. While Rocket Mortgage^® doesn't offer desktop appraisals at this time, we want to provide more information to home buyers and homeowners looking to explore this option.

Desktop Appraisals: Defined

A desktop appraisal is a property valuation that is completed at the appraiser's desk, using third party data such as tax records  or information listed on the multiple listing service (MLS), instead of an interior/exterior inspection  of the property. Importantly, a desktop appraisal should not be confused with a hybrid appraisal.

What’s The Difference Between A Desktop Appraisal And A Hybrid Appraisal?

A desktop appraisal is conducted remotely without any physical inspection of the property. Instead, the appraiser relies on third party information such as MLS listings, property records and previous appraisals to determine the property’s value and uses a desktop appraisal form.

In a hybrid appraisal, a third party data collector visits the property and completes a data collection. During the data collection, they complete an interior and exterior inspection of the property, collects photos, measurements, and specific data points regarding the condition of the home. From there, a certified appraiser will complete a hybrid appraisal on a hybrid appraisal form without visiting the property. Instead, they rely on the data collection and other public data sources, if needed, to arrive at their opinion of value.

When Are Desktop Appraisals Used?

According to Fannie Mae and Freddie Mac, a desktop appraisal is only for purchase transactions. This may include new construction purposes, though restrictions may apply.

Considerations When Getting A Desktop Appraisal

Whether you can get a desktop appraisal will depend on a few factors, including the lender you work with and the loan product you use. While you cannot choose whether you have a desktop appraisal, there are some factors you’ll want to keep in mind when getting a desktop appraisal.

• Amount of time: A desktop appraisal doesn’t always mean a faster process. It still requires coordinating multiple schedules as you need a data collection completed by a data collector before a hybrid appraisal can be completed.
• Total cost: The cost will vary based on your location, and the buyer usually pays for a desktop appraisal.
• Required documents: The appraiser will need access to tax records, MLS listings, prior appraisals and any other relevant data about the property.

Desktop Appraisal Pros And Cons

There are many potential advantages and disadvantages of getting a desktop appraisal instead of a traditional home appraisal. Let’s look at some pros and cons to consider.

Pros Of Desktop Appraisals

Here are the biggest benefits of desktop appraisals:

• Cost-effective: Desktop appraisals tend to cost less than traditional appraisals.
• Less bias: Since the appraiser won’t physically visit your property, this reduces the risk of bias entering into their evaluation.

Cons Of Desktop Appraisals

Desktop appraisals aren’t the right choice for everyone—here are some drawbacks to consider:

• Eligibility: Not all property types, loan purposes, occupancy types and loan-to-value ratios (LTVs) are eligible for desktop appraisals, and complex properties may be excluded.
• Lender restrictions: Your lender may be unwilling to accept a desktop appraisal, regardless of the type of home you’re buying.

The Bottom Line

A desktop appraisal may be the right type of appraisal for your loan, but it won’t be an option for everyone. A traditional appraisal may be required if you’re financing a home purchase with a mortgage loan and will be required if you’re refinancing. If you’re ready to begin your home buying journey, you can fill out a mortgage application online today.