A hybrid appraisal can be best understood as a hybrid of a desktop appraisal and a full appraisal — hence the name. It follows the same principles as a desktop appraisal: It can be carried out remotely without having to actually visit and inspect the property, and the appraiser doing the valuation relies on third-party data. However, it differs from a desktop appraisal in that it also involves enlisting a licensed appraiser or building inspector to carry out an examination of the actual property.
By combining the third-party data from sources like MSL listings, google maps, or tax records with the data gathered from the property inspection, an appraiser can prepare an assessment of a property’s value. Hybrid appraisals are often used for residential mortgages and loan servicing, such as assessing the performance of a loan. There are some scenarios when hybrid appraisals are not used — for example, purchasing or refinancing of residential properties.
Hybrid Appraisal – Pros and Cons
Advantages of a Hybrid Appraisal
Like a desktop appraisal, hybrid appraisals are favoured for their faster turnaround time. This is because they are done remotely, with the appraiser relying on third-party data from different sources as well as a property inspection carried out by a third-party appraiser or property inspector. By splitting up the responsibilities of inspecting the property and creating an appraisal report, the entire valuation process is streamlined and therefore much quicker than a full appraisal. This makes hybrid appraisals a great option if you need a valuation with short notice.
The efficiency of hybrid appraisals also tends to make them much cheaper than traditional methods of valuation. Because the appraiser can carry out the valuation from their desk without having to spend time travelling to the property, their fees are generally much lower.
Disadvantages of a Hybrid Appraisal
As is the case with desktop appraisals, hybrid appraisals can suffer from inaccuracy based on the data supplied to the appraiser. Although having another appraiser carry out the physical property inspection saves time and money, it can also lead to inaccuracies in the valuation. In situations where the available data is inadequate or scare, a hybrid appraisal is probably unsuitable. For some appraisers, it is insufficient to rely on third-party data from an inspection, and is preferred to complete the property inspection themselves in order to calculate an accurate value.
Hybrid Appraisal Summary
Hybrid appraisals are a popular option for property valuations due to their short turnaround time and attractive price. But their dependence on third-party data and inspections makes them subject to inaccuracy, which will not be appropriate in every situation.