Appraisals are essential to buying, selling, managing, and investing in a commercial property. Regular appraisals help owners know the world of their property before they put it on the market to sell. Commercial real estate appraisals help determine the fair price of commercial properties, like offices, apartment buildings, industrial sites, shopping centers, etc. However, the job of appraisers came into jeopardy during the pandemic when they had to change their processes and shift more innovative, remote strategies to follow the rules of social distancing.
In March 2020, the Federal Housing Authority (FHA) gave appraisers to conduct property appraisals online to prevent the spread of the COVID-19 virus. Fannie Mae and Freddie Mac accepted virtual appraisals as a temporary replacement for the in-person appraisals. Such remote appraisals have become increasingly common since then. These mortgage giants pivoted to accepting virtual appraisals to prevent the real estate market from crashing due to the absence of mortgages and appraisals. Even though such remote appraisals began purely based on necessity, they are expected to stay as people have continued to remain hesitant about permitting others to enter their houses as the pandemic is stretching out.
How do Remote Appraisals Work?
In a traditional appraisal, a licensed appraiser performs an in-person inspection to check everything from the interior to the house's exterior to get a fair assessment of its value. Appraisals differ from house to house, and since each home is unique, there is no thumb rule.
With advances in technology, remote appraisals are becoming increasingly common. Remote appraisals address the issues of traditional appraisals, like mitigating the conflict between the property owner and appraiser. Even though conventional appraisals might seem better because of the in-person visits, experts have pointed out several flaws with the system. For instance, during the 2008 Financial Crisis, appraisers put extremely high price tags on properties that favored the lender.
With modern technology, such problems can be addressed as autonomy lies in the hands of property owners. The technology addresses labor shortages in the real estate sector. Due to the aging population of appraisers, there is a sheer paucity of fresh talent. Even though licensed appraisers perform all virtual and traditional appraisals, remote appraisal takes much less time.
Some appraisers even use augmented reality (AR) to see the property. This allows them to see all aspects of property wherever they need to.
Why are Remote Appraisals Becoming So Popular?
Remote appraisals provide several benefits both for appraisers and property owners. Some of those benefits are:
- Time savings: In remote appraisals, the designated appraiser does not have to spend time, money, and effort commuting or traveling. Sometimes, traditional appraisals even take an entire day or more because the property is in a far-off or rural area. In the case of remote appraisals, they conduct appraisals in the comfort of their own homes.
- Higher Flexibility: Virtual appraisals offer much more flexibility as appraisers do not need to worry about minor things like traffic. This means that they can schedule more appraisal meetings easily.
- Eliminating Bias: Research in the field has demonstrated that appraisal bias occurs in minority-populated neighborhoods. The property values of minority-populated communities get assigned a lower price tag than majority-populated neighborhoods. The Federal Housing Finance Agency (FHFA) indicated that remote appraisals might limit racial and ethnic appraisal bias, thus making the appraisal process more equitable.
Valcre is the perfect solution for appraisers looking to enhance their abilities and stand out against the competition. With its end-to-end appraisal software solutions, Valcre provides users with a more efficient, organized, and intelligent way to present their work. It offers an automated real estate appraisal process that is wholly standardized that eliminates the burden of tedious paperwork.