A property appraisal is the most significant document in the
submission of the loan application which is reviewed by the lender. After the
loan application is submitted it needs to be approved for the property and the
applicant who wants to buy the property. These documents include title
insurance, appraisal, and other third-party documents. Borrower’s provided
documents are also included in the application. You can say that the drive-by
appraisal is a descriptive type of home appraisal.
An appraiser will most likely perform his own research based
on the property sales contract recently in the area, where the sales price is
only the starting point. This is the first thing an appraiser does when he
receives an appraisal order by listing down the multiple recent sales. After
identifying the recent sales in the area appraiser will physically visit the
site and assess the other aspects of the property and area. A home appraisal
will conduct an interior and exterior valuation of the home. It is not the
buyer-paid valuation. The visual inspection helps the appraiser to determine
the worth of the property by its condition. An appraiser may take pictures of
the interior and exterior to keep the record and provide the final valuation
after a complete inspection
In a drive-by appraisal, the appraisers will need to perform
recent sales research, physically visit the site but just by driving by the
home, no thorough inspection and photography will take place, and no general
conditions of the home are taken into account. AUS findings do not indicate the
importance of pictures, but usually, a full appraisal includes a thorough
inspection with the photos of the interior and exterior. The AUS may find
photos unnecessary and complete the valuation with any pictures. Therefore, an
appraiser will pass on the general comments on the property’s condition by
literally driving by the home.
A secondary approval requirement can be made by the
underwriter of the lender. Because the lender can request for the upgrade from
a drive-by appraisal. But the lender cannot downgrade to a drive-by appraisal
if there is a requirement for a full appraisal. Thus, an appraiser can refuse
the request for an upgrade but cannot downgrade the existing request. AUS
findings contain the level of appraisal requested.
A bank may request only an exterior or drive-by
appraisal if you want to refinance your mortgage, your credit for home equity
is small, you are borrowing only little as compared to your house worth, etc.
Sometimes the bank will only recommend drive-by appraisal if there is very low
risk, although much accurate and better options are available. If you are in
the foreclosure process, a drive-by appraisal will help the bank in estimating
the worth of the home. Usually, homeowners are not called in these cases. So,
an appraiser is likely to perform a complete home appraisal (including
interior) when the house is sold in foreclosure. A bank or mortgage company may
require a drive-by appraisal, but borrowers might have their concerns.
Sometimes lenders and appraisers may talk about the appraisal and most of the
complaints of the borrowers are heard.
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