Some borrowers are lucky enough to find a lender that requires just a drive-by appraisal rather than a full appraisal. This typically happens during a refinance rather than a purchase. Just what is the difference? Keep reading to find out more.
The Characteristics of the Drive-By Appraisal
As the name suggests, the appraiser doesn’t come inside the home for the drive-by appraisal. While the appraiser doesn’t literally drive past the home, he does only inspect the exterior of the home. He will compare the description provided of the home to what he sees. For example, if you say you have a two-story home but when the appraiser comes to the house, he sees a one-story home, there will be an issue.
The appraiser will take pictures of the front and back of the home and then use real estate records to complete the appraisal. The appraiser will rely on these documents to get the home’s measurements and features. Just like a standard appraisal, he will also look at comparable sales in the area to come up with the value for your home.
The Benefits of the Drive-By Appraisal
The drive-by appraisal has some obvious benefits, such as:
- Lower cost – Because the appraiser has to spend less time at the property and does less work, the drive-by appraisal costs less than the full appraisal
- You don’t have to fix up the interior of your home
- The appraisal can usually be done faster
- You don’t have to schedule the appraisal; you don’t even have to be home
The Disadvantages of the Drive-by Appraisal
While the drive-by appraisal may save you time and money, it has some distinct downsides:
- The public records of the home’s measurements and features could be incorrect which could leave you with a lower value
- You can’t show off any improvements you’ve made that may increase the home’s value
- The appraiser must rely on third-party information to come up with your home’s value
A Previous Appraisal
The best chance of the appraiser having accurate information is to provide a previous appraisal. If you’ve refinanced before or you have the appraisal from when you bought the home, the appraiser can use the information from that appraisal. Then you know that the measurements and feature descriptions are accurate.
You can also provide the appraiser with any proof of improvements that you’ve made. This can include receipts or contracts with contractors. This will help the appraiser know the condition of the interior and what improvements you’ve made. Without proof, the appraiser can’t use it in the value.
Comparing the Full Appraisal
The full appraisal, as discussed above, requires the appraiser to enter the home. He will walk around and look in each room. He will also take measurements. He will look at the general condition of the home, make sure the appliances are present and look for any dangers such as pest damage or mold.
The drive-by appraisal can be good if you are just doing a rate/term refinance and want to save money. If you are trying to take cash out of your home’s equity, though, you may be better off paying for the full appraisal and giving the appraisal access to your home.Click to See the Latest Mortgage Rates»