What’s the difference between a Desktop & a Hybrid Appraisal (and BPO)

If you need a home appraisal, you may have run into a couple of challenges with traditional appraisers. Two of the most common challenges include:

• Price: A traditional house appraisal can be quite costly. It could cost as much as $1,200 depending on the appraiser and the details of the home. 
• Availability: It could take weeks to get a traditional appraisal done. If you’re looking to close on a deal in the very near term, you may not have weeks for an appraisal. 

The good news is that you may not need a traditional appraisal. Some other common options like hybrid appraisals, broker pricing options, and desktop appraisals could be your solution to these common problems. Here’s what you need to know about these three options.  

What Is a Hybrid Appraisal?

A hybrid appraisal is a hybrid of a traditional appraisal and a digital appraisal. Hybrid appraisals are typically done by licensed appraisers who use online data to learn about the home. That data will often include online listings, images of the property, tax documentation, and more. 

However, the online information only forms part of the picture for the appraiser. In a hybrid appraisal, there’s on-site work that needs to be done too. The appraiser will typically visit the property or hire someone to do so. Once at the property, the appraiser or their hired help will often take measurements of rooms, verify the condition of the property, and look for factors that may play a role in the price of the property. 

However, these home visits are usually pretty short. After all, the appraiser has already gathered quite a bit of information online. 

Pros and Cons of a Hybrid Appraisal

Hybrid appraisal pros:

• Cost: Hybrid appraisals are typically less expensive than traditional appraisals. In fact, most hybrid appraisals cost about half as much as a typical traditional appraisal. 
• Time: When you’re in a time crunch, you may not have weeks to wait on a traditional appraisal. If that’s the case, a hybrid appraisal may be the next best option. These appraisals usually only take about 50% of the time of their traditional counterparts. 
• Licensed Appraiser: Hybrid appraisals are performed by licensed appraisers. Although the hybrid nature of the appraisal may lead to some inaccuracies, the overall appraisal will be a strong product. 

Hybrid appraisal cons:

• Accuracy: Hybrid appraisals aren’t quite as accurate as traditional appraisals, as they’re performed faster and with less information than their traditional counterparts. 
• Trust: It’s important that you choose a trusted appraiser with a strong name within your community. After all, hybrid appraisals give the appraiser the option to cut corners. If they cut too many corners, the appraised value of the property could be inaccurate.

What Is a BPO (Broker Pricing Option)?

A broker pricing option, or BPO, works just like a hybrid appraisal. The key difference is that with a BPO, the work isn’t done by a licensed appraiser. Instead, a real estate agent does the work involved in a BPO. 

As is the case with a hybrid appraisal, the licensed real estate agent will search for information about the property online. Once the online search is concluded, the real estate agent or hired help will go to the property in question to fill in the gaps left by any information that wasn’t available online. 

Pros and Cons of a BPO

BPO Pros:

• Cost: BPOs are often significantly less expensive than traditional appraisals. They can even come at a lower cost when compared to a hybrid appraisal, as they’re typically performed by licensed real estate agents rather than licensed appraisers. 
• Speed: BPOs can be done pretty quickly. The time it takes to complete a BPO is comparable to the time it takes to complete a hybrid appraisal, which is about half that of a traditional appraisal. 

BPO Cons:  

• Accuracy: As is the case with a hybrid appraisal, real estate agents rely heavily on online information when they perform a BPO. That could be an issue since online information may be inaccurate. If that’s the case, the entire appraisal can come with accuracy issues. 
• Trust: As is the case with a hybrid appraisal, BPOs leave the option for excessive corners to be cut, which could limit the end value of the appraisal.     

What Is a Desktop Appraisal?

A desktop appraisal is just what its name suggests. These appraisals are either done by a licensed appraiser or a licensed realtor. However, unlike the other appraisal types mentioned above, a desktop appraisal is done 100% online. 

Professionals who perform desktop appraisals gather information from: 

• County records;
• tax records; and 
• online listings and photos. 

The appraiser in the case of a desktop appraisal will never step a foot on the property in question. As such, this is often viewed as the least accurate option. However, it may be the most viable appraisal option if you’re in a time crunch. 

Pros and Cons of a Desktop Appraisal

Desktop Appraisal Pros:

• Speed: Since desktop appraisals can be done without ever stepping foot on the property in question, they tend to offer the fastest turnaround. You could feasibly receive a desktop appraisal far faster than a hybrid appraisal or BPO, making it a compelling option if speed is a major factor. 
• Price: Since there’s no need to travel to a physical location and desktop appraisals typically take less time to complete, they’re also typically the lowest-cost option. 

Desktop Appraisal Cons:

• Accuracy: Desktop appraisals are done 100% online. Unfortunately, online information isn’t always the most accurate information. It’s common for online data to be outdated, and significant factors that may play into the cost of a property can be missed. As such, this is the least accurate option listed. 
• Viability: Because appraisers and real estate agents who perform desktop appraisals never step foot on the property they appraise, some lenders and other parties may not accept them as valid appraisals. 

The Bottom Line

The bottom line is that, if you need an appraisal, costly and time-consuming traditional appraisals aren’t your only option. If you’re in a time crunch, or you’d like to save money when and where possible, consider taking advantage of a hybrid appraisal, BPO, or desktop appraisal.