APPRAISALS IN THE AGE OF COVID 19
With virtual properties tours and 3D floor plans being the norm in the era of Covid 19 at least for the near future, appraisers also have had to make adjustments in the way they conduct their business. Since access to buildings and apartments is restricted as of now by either buildings or individual owners due to health and safety concerns, appraisers have become creative in the methods they use to appraise value of properties. These days 7 out of 10 appraisals are either “Desk Top” or Drive By” appraisals; First Republic was the first lender to adapt to this methodology of appraisals as they understood the obstacles in the path of appraisers in conducting business as usual and the inconvenience it would cause to their clients, after much hesitation, some other lenders reluctantly followed suit.
Desktop appraisals are not a new phenomenon in the appraisal industry, they were the exception not the norm. Desk Top appraisals are conducted by looking at past and present photographs of a particular and like kind properties, keeping the present state of the market in mind and after having conversations with the listing broker to determine the condition and enhancements made to the property since the last time the property changed hands. Although Fannie Mae has relaxed the rules till June 30th 2020, as of now a majority of lenders still prefer to have on-site appraisals with proper protocols in place for the safety of the appraiser and homeowner as most properties in Manhattan and loans on them are considered high value properties compared to other parts of the country. Cooperatives and Condominiums are slowing relaxing their rules to adapt to the needs of their shareholders and owners.
As a general rule most appraisals reports have a “shelf life” of 90 days, however, the validity of the appraisal can be extended by filing an Appraisal Extension Report which is important as in these difficult times loan approvals and closings are taking longer than normal.