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.
Buyers and sellers are in for another nail biting year of making
predictions regarding the Baltimore metropolitan market. There seems to be a slightly
harder road ahead than last year due to the future of the Federal Fund Rate.
Interest rates are projected to rise from its current 5% to 5.5% by the end of
2019. The rate hike will be based on data from the overall economy growth. If
the economy does not move forward with the growth as expected, the hikes will
likely be delayed.
The Baltimore market is projected to have slightly more inventory with an
overall 2% increase in housing prices in 2019.. so on the horizon there will be
more inventory, higher prices and a raise in rates. This combination is making
it more difficult for the first time home buyer to secure a home. Millennials
make up the largest demographic of new home buyers which will be heading into a
year where home-ownership looks to be a little tougher than the past few years.
There are other factors coming into play this next year on a national level
that is new territory for all of us. The tax bill that was passed at the end of
2017 was in effect for the full year of 2018. This reform is new so the outcome
is unknown of the positive or negative effects on the 2019 economy. The reform
includes changes in standard deductions for married couples and for singles:
you’ll need to take a close look at that this year to be sure you will still be
itemizing because the standard deduction is much higher. There is also a
limited tax advantage on mortgages: mortgage interest is still deductible, at
least in principle (pun intended), for the vast majority of homeowners.
However, whether they actually receive that deduction or not will depend on a
multitude of other factors. This is yet another scenario in the economy that a
simple answer does not apply.
On a more local level, the economy of the Baltimore Metropolitan area (in
part) will soon feel the benefits of the recent decision of the new Amazon Headquarters
in northern Virginia. The second Amazon headquarters is going to go by “HQ2.”
The company says that this won’t be a satellite facility, but rather an equal
to its current headquarters in Seattle, Wash. It also notes that it will be
investing $5 billion into its creation. Located approximately 30 miles outside
of Washington DC, Loudoun County is part of a burgeoning tech corridor. The
employees would live in Loudoun County or commute from one of the surrounding
counties, Maryland (directly to the north), or West Virginia (due west). So
with the influx of jobs and the need for housing the opportunities for an
economic boost for the Baltimore area looks to be quite positive.
The economy is multi-faceted, multi layered, temperamental and always
changing; home prices follow this trend. Robinson Appraisal Group can offer you
their services on determining the value of your home in an ever-changing
climate. We offer home appraisal services in Baltimore County, Baltimore City,
Harford County, Howard County, Carroll County, Anne Arundel County and Cecil
An Estate Sale Appraisal Process
After 25 years of handling estate sale appraisal in the Baltimore Metropolitan area I have seen my fair share of estate sales. But what is an estate sale? An estate sale means a person has died and the party/parties that inherited the property are selling it. Estate properties usually are priced well to reflect that fact that they need work. Another possible issue is that if there are multiple parties involved, they may not always agree on what price or terms they’ll accept and there may be delays due to the need to negotiate among each other, though hopefully that is not the case.
As an appraiser there are multiple ways to appraise a property that belongs to an estate. One method is the traditional appraisal process of determining the most recent and appropriate comparables in the market area surrounding the property.
Many times we are asked to evalauate the property’s value as of the date of death of the deceased owner(s). This is typically a private appraisal for an attorney or for one of the parties who will be part of the estate looking for the market value. When establishing the value on the date of death the sales comparables must have occurred prior to the date of passing, so if I was doing an appraisal on a house where the deceased passed 12 months ago, the sales would had to have sold prior to that date, say 13 or 14 months ago. You cannot use sales that occurred after the date of passing: this is called a retroactive appraisal.
The appraiser can not be biased or allow recent circumstances in the market to affect the value after the retroactive date…say the market plummets or prices have increased substantially due to high demand… the estate appraisal should reflect what the market was on the date of the passing, not anytime after.
A big part of maximizing what you leave behind is minimizing taxes. Federal taxes on gifts and estates can be among the highest assessed on any financial transaction. In addition, some states levy their own estate or inheritance taxes.
An appraiser, an attorney and a tax advisor can aid in the process of estate issues. As an appraisal company we can provide one of the services needed in regards to your estate and real estate valuation. Robinson Appraisal Group covers the areas of Baltimore County, Baltimore City, Harford County, Cecil County, Carroll County, Anne Arundel County and Howard County. Having a professional appraisal gives the parties involved a reputable report to work with in meeting IRS and state agency requirements. It would be our pleasure to work with you during this arduous process.