A hybrid appraisal is a valuation completed by a Licensed/Certified appraiser that is very similar to a desktop appraisal. It is a shorter appraisal form than the traditional appraisal and is performed by an appraiser who typically never visits the property. However, a hybrid appraisal includes an exterior observation of the property, sometimes including an interior inspection by a third-party: this third party inspection could be done by a real estate agent, a property inspector or even another real estate appraiser.
The use of this type of “hybrid” appraisal for lenders boils down to reducing turn-times for appraisals and lowering fees. Fast and cheap….doesn’t sound too reliable when you break it into simple terms. Appraisers typically earn an average of $50–$100 per assignment, which is substantially less than the average fee for a typical full appraisal. The hybrid appraisal is designed so the appraiser can complete the valuation in 30–60 minutes. An alarming aspect to me as an appraiser is that another person is involved in the valuation and/or outcome of the report. There is a reliance on third party data that is very concerning, the data that has been compiled by another person could be inaccurate and/or misleading.
A major concern regarding the hybrid appraisal would be the level of risk and liability. Performing an exterior inspection is not new to the appraisal field, the 2055 form has been used in past years, the main difference is the hybrid appraisal is when a third-party inspector does an external or interior inspection on which the appraiser relies on the data. A variety of companies offer hybrid valuation products, they have their own forms, statement of assumptions and limiting conditions, certifications and additional information that is provided to the appraiser and/or included in the report. Some hybrid appraisals have an exterior only inspection, while others include an interior inspection. With all of these different factors regarding the hybrid appraisal the levels of risk and liability are heightened. Typically, anything that receives value would be the responsibility of the appraiser. It seems as though appraisers continue to be asked to adapt to changes in forms and regulations but any change should strive to enhance and produce a credible product for lending purposes.
If this form does gain momentum and used more in our field, this would be an advantage for the aging demographic of real estate appraisers. This form may be a possible solution and benefit for appraisers who still want to continue appraising into their “golden” years, but due to health and/or limited mobility are no longer able to physically inspect homes. In these instances, hybrid appraisals allow experienced appraisers to continue to apply their expertise without leaving the house.
Personally, I do not feel this appraisal alternative is a viable replacement for a credible appraisal assignment. Change and adaptation is a constant in the appraisal business, whatever the direction the hybrid appraisal may lead to, all of the appraisers at Robinson Appraisal Group will continue to perform credible appraisals to achieve market value on properties within our area of Baltimore City, Baltimore County, Cecil County, Carroll County, Anne Arundel County and Howard County. We look forward to providing you with reliable appraisal assignments.