Table of Contents
- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
About Hybrid Appraisal
Appraisal is one of the most important aspects of a real estate sales transaction.
Whether you are buying or selling the house, you have to get an appraisal done as a part of the property sales transaction.
Appraisals are also required if you are refinancing your current mortgage. With the help of appraisals, the buyer or the mortgage lender can determine the fair market value of the property.
What Is A Hybrid Appraisal?
A hybrid appraisal also called a bifurcated appraisal, is a report in which someone else (usually a real estate agent or third-party appraiser) will make an independent assessment of the internal and external aspects of the property that is being sold.
Once the assessment is completed by the agent or the third party, they will report their findings to the appraiser.
The appraiser will collect information on the property from public records, the MLS, and other sources to conclude the appraisal report and will provide the value of the property.
Hybrid appraisals are like traditional appraisals. However, the process of appraisal is split into two parts.
In traditional appraisals, the inspection and the appraisal report are provided by the same appraiser.
However, in hybrid, the inspection and the appraisal report are done by different individuals. That is why they are also called bifurcated appraisals.
When a hybrid is used for property appraisal, a third party will visit the property and conduct a physical inspection of the property, identifying its features, condition, location, size, and any other factors related to the value of the property.
This third party will inspect both the interior and exterior of the building and collect the same type of data used for traditional inspections.
The difference with a hybrid is that the individual inspecting the home – who can be a real estate agent, home inspector, another licensed inspector, or even a trainee appraiser – will submit the data that they have collected to the appraiser, who will finalize the value of the property.
The appraiser will complete their portion of the process by combining data collected by third parties and public records, MLS, and other sources to complete the appraisal report.
The appraiser will also consider comparable sales, also known as comps, to help determine the market value of the property they are considering.
This process allows the professional to focus on property valuation, where their skills and experience reside.
What Is Included In A Hybrid Appraisal Report?
The report will also contain information that supports the appraiser’s valuation, such as:
- Description of the exterior
- Trends in the local real estate market
- The condition of the property
- Features
- Area and structure
This report will also include:
- The intended use of the report and its recipients.
- Any special instructions from a lender or agency such as Federal Housing Administration (FHA), Fannie Mae, or Freddie Mac.
The Pros And Cons Of Hybrid Appraisals?
Pros:
Hybrid appraisals are very popular, mainly because they use the expertise of the appraiser.
The hybrid analysis allows the appraisers to focus on what they know how to do by comparing real estate sales data and evaluating properties.
Hybrid appraisals may take less time compared to traditional appraisals. A hybrid inspection usually takes 30-60 minutes.
It may take up to a week for the final report to come back. That’s even faster than the traditional 3-30 day turnaround time.
Cons:
The most important thing about hybrid assessment methods is accuracy. An appraiser may not trust others to accurately record the condition, style, or other characteristics of the property.
Third-party local inspectors may not have the same credentials or licenses as an appraiser. Their expertise can be questionable and lead to inaccurate home prices.
Conclusion
The right to order the appraisals is with the lender, you as a homebuyer or seller would not get the option to choose the type of appraisal required for the transaction.
The type of appraisals ordered by the lender depends on various situations and circumstances of the transaction.
Home valuations, like many aspects of real estate, can change with local real estate markets or national events like a pandemic.
And, depending on the availability of valuation professionals in your area, hybrid appraisals may be more or less common.
