What is a Desktop Appraisal and How Are They Changing the Homebuying Process?

During the height of the pandemic, the Federal Finance Housing Agency, or FFHA, issued several orders to allow more flexibility for buyers and sellers during the homebuying process. These were issued in response to the many challenges that the pandemic presented for the real estate industry. One such step was the ability for mortgage companies to allow desktop appraisals.

What is a desktop appraisal and how is this different from a traditional appraisal? A traditional appraisal requires a licensed appraiser to physically inspect a property onsite. When the pandemic hit, people were working remotely and sellers were hesitant to have anyone enter their homes. Enter the desktop appraisal. A desktop appraisal is able to be performed without any onsite inspection, and is based on data compiled by the appraiser. Appraisers completing a desktop appraisal must still be licensed, and are expected to perform a full analysis of property details to render a home valuation.

The Acting Director of the Federal Finance Housing Agency, Sandra Thompson, announced recently at a conference for the Mortgage Bankers Association that this, once temporary solution to pandemic challenges, will be made a permanent option for lenders issuing conventional loans.

How will this impact the homebuying process? Experts believe this will help to speed up the closing of real estate transactions. Using a traditional appraisal, the average closing time for a real estate transaction is anywhere from 30 to 45 days from beginning to end. Many lenders report that many delays in the closing process come from issues relating to appraisals. Using a desktop appraisal involves much less time than scheduling, performing, and analyzing an onsite appraisal. This could shave several days off the typical closing time for mortgages.

Desktop appraisals are also less costly than traditional appraisals and will save buyers money. Appraisals usually cost between $200 and $600 depending on the market and the size and conditions of the home. Since desktop appraisals do not require an onsite visit and are less labor intensive than a traditional appraisal, it will likely save buyers several hundred dollars.

Appraisals, either desktop or traditional, are a standard piece of the Florida keys home buying process. If you are looking for a home for sale in the Florida Keys, we can guide you through the process from start to finish - including helping you understand what you can expect from an appraisal.