Can an internet appraisal replace an actual appraisal if the loan amount is significantly less than the value of the home?

Asked by Brandon, 92064 Tue May 8, 2012

Are there such services as internet appraisals? I was reading an article a while back and recall that instead of spending $500 for an appraisal you can spend $50 for an internet appraisal if the loan amount is significantly less than the value of the home. Is this true?

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David Rudd /…, Agent, San Diego, CA
Sat Jan 5, 2013
Every bank and situation is in fact different. I agree with many of the agents below on one fact, lending requirements have become stricter and this includes appraisals. I am vary familiar with appraisals as a former owner of a multi state appraisal company, and current licensed appraisal. In addition, I was an executive for a national bank.

Depending on the product, the loan to value ratio, credit score, borrowers assets, the lender or investor requirements, some lending products do not require a full appraisal and do in fact hand over $100,000 without a traditional appraisal - instead a computer models the value - call it Trulia values on steroids. Having said that, MOST people and properties do not qualify for this type of lending.

If your credit score is high, the loan to value ratio is extremely low, you have a strong balance sheet, wanting a variable or short term fixed rate loan, then shop around and you may find an institution willing to lend based on a desktop appraisal or automated value model (AVM). These loans are typically kept in the banks portfolio (hence variable rates are more typical) and not sold on the secondary market.

Hope this helps.

David Rudd
2 votes
Cory La Scala, Agent, San Diego, CA
Tue May 8, 2012
The appraisal is for the lender, you're just paying for it. No lender is going to hand over $100,000's based on an internet appraisal. A real and comprehensive appraisal can't be done without seeing the property. It's bad enough that out-of-area humans are doing them!

You'll need to have a real appraisal unless you find a lender willing to lend on an online tool meant for consumers.


Cory La Scala, REALTOR
Independence Realty
0 votes
Robert Spino…, Mortgage Broker Or Lender, Mill Valley, CA
Tue May 8, 2012

Generally speaking and in this lending environment, a full appraisal will be required. However, there are some instances where Freddie Mac and Fannie Mae will permit the equivalent of an automated value. This is called a property inspection waiver and usually runs about $75. If your transaction falls into this category, your mortgage loan officer will notify you at or around the time of the pre-approval.

If you have any questions, certainly let me know.

Rob Spinosa
0 votes
Daniel Harms, , Upland, CA
Tue May 8, 2012
Hi there, I do believe that these types of appraisals are more just for your own curiosity. They are not meant to replace a traditional home appraisal. These are similar to going on to a Zillow type website and seeing what they estimate your home to be worth. There is no way a bank will allow this to replace an appraisal where someone actually comes out to look at the home.

Most realtors can provide a market analysis of your home to see what market price is when your considering listing. I would put more faith in that then answering a couple questions online and then getting a figure of what my home is worth.
0 votes
Ron Thomas, Agent, Fresno, CA
Tue May 8, 2012
Boy, does this sound like the old saying "you get what you pay for"!

First, how can someone do an appraisal without seeing it? This alone is absurd.
Second, the formal Apprsial is done for the Bank; the bank commissions it and the results are given to the bank; you just have to pay for it.
Third, how could a $50 appraisal equal a $500 appraisal?

And, if you are buying a $500,000 home and you are putting $250,000 down, the appraisal is moot and may not even happen.

But trying to save $450 isn't going to happen this way.

ps. I think the appraisal is tax deductible; check with your tax man.
0 votes
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