Hybrid Appraisals

[Mejappz]

Appraisal Institute's Response to Freddie Mac Research on Hybrid Appraisals​

The Appraisal Institute strongly urges policymakers, industry stakeholders, and the public to exercise caution when considering recent research findings published on Mar. 13 by Freddie Mac as justification for expanding the use of hybrid appraisals.

Freddie Mac claims that property data reports (PDRs) and hybrid appraisals outperform traditional appraisals in identifying serious property condition issues, yet the enterprise has not released the full research study supporting these conclusions. Without access to the methodology, sample size, and specific criteria used in their analysis, appraisal professionals are unable to independently evaluate these claims. If the data truly demonstrates such a significant improvement, why not make it available for full industry scrutiny?

Although the research highlights differences in condition rating and repair identification errors, it does not account for key distinctions between property data collectors and licensed or certified appraisers. Data collectors utilize an app-based collection tool and a standardized checklist developed by the GSEs, whereas appraisers undergo extensive training to assess property characteristics that influence value. While a uniform template may promote consistency in reporting, it does not necessarily lead to more accurate or credible valuations. Appraisers can provide a more reliable opinion of value when they personally inspect a property, rather than relying on photos and third-party data that may not fully capture the property’s true condition.

One of the biggest concerns with property data collectors is the lack of oversight and accountability in their role. While they may undergo background checks, there are no uniform standards for training, licensing, or ethical responsibilities like those required of appraisers. Yet, these individuals are granted access to homes, where they can document personal belongings, security systems, and other private details. If a homeowner has a concern or dispute regarding a data collector’s actions, there is little to no recourse available, as they are not held to the same professional or regulatory standards as licensed appraisers. This lack of accountability raises serious questions about privacy, security, and consumer protection.

Moreover, the financial impact of hybrid appraisals remains unproven. While proponents argue that hybrids reduce costs and improve efficiency, no independent analysis confirms that consumers actually benefit from lower fees or faster loan processing. In fact, separating data collection from valuation can introduce inefficiencies, requiring additional verification and corrections—especially when data collectors lack adequate training. The adoption of hybrids will also require significant changes to lender policies, procedures, and systems, potentially increasing costs that may be passed on to consumers.

The Appraisal Institute remains committed to upholding high professional standards, transparency, and consumer protection in the valuation process. Any move toward hybrid appraisals should be driven by independent, comprehensive research that thoroughly evaluates their cost, quality, impact on market participants, and potential risks to the financial system.

Appraisers are encouraged to take advantage of training opportunities in assigning condition ratings, identifying property deficiencies and needed repairs, and making accurate time and market condition adjustments. We welcome ongoing dialogue with policymakers, regulators, and industry leaders to ensure that appraisal practices continue to serve the best interests of consumers, lenders, and the broader real estate and financial markets.

https://www.appraisalinstitute.org/...AI-news-releases/2025-03-12-hybrid-appraisals

 

[Fritz in NY]

Local Realtors, uh, knowledgeable? 20 some hours in a classroom, pass a basic skills exam and WOW we now have a Real Estate Professional that we rely on?
I have been and still are a REALTOR, paying Dues (Useless) following continuing Ed (Useless), Voting (Useless), many are worse than UBER drivers and charge $ 50.
for an opinion.
Too many useless data collectors, it's your United States economy at stake.

 

[Non Sequitur]

Those are not inspections; they are merely drive-by photos. There is a significant difference. Is training or certification necessary to take a photo of a house?

I know for a fact Proxy offers interiors with sketches/floorplans because I test drove it (and see below).

 

[Mejappz]

 

[Mejappz]

 

[sputnam]

We all know this, and I, for one, am sick of it being pointed out in these threads on the topic - as if appraisers so stupid that we can not read and understand USPAP does not require an inspection.

GSE origination loans with a valuation usually require a subject inspection, and now the hybrid is a barrier to the appraiser personally inspecting the subject of the appraisal. This means the appraiser is now less well-informed than the buyer or RE agent, both of whom HAVE visited the subject personally if at all possible to do so. ( in most cases )

If a property was a list of data, then buyers would not feel a need to see the property in person or drive through the neighborhood. A listing agent would not need to inspect it either. Why bother? Because parties know there are less tangible or surface visible aspects to a property that are extremely important and affect appeal and value and which can only be experienced in person. No matter how many photos or videos or notes are available.

And I'm tired of appraisers whining about changes... especially when they complain that the changes violate USPAP even though they don't. Hybrid appraisals are a thing.

Despite having to take a USPAP Update class every other year... Nearly half of the residential appraisal reports that I review get sent back for revision because of USPAP errors. If everyone knows it so well... why do appraisers keep submitting reports that don't comply? The fact is... many appraisers dial it in.

 

[sputnam]

I love how people use that USPAP never required an inspection and bend it to meaning now anybody can do the inspection when one is required. That’s a hell of a stretch. I no longer give a **** about USPAP, but for the first 10 editions of the book I was required to buy, it said the appraisal inspection and things like measuring the subject Property are considered examples of significant appraisal assistance. Now the unethical stakeholders probably lobby to get that removed. For a book supposedly based on ethics, they sure do compromise themselves all the time.

No one said that.. or bent anything. Only appraisers are required to comply with USPAP. The Lenders don't have to. Lenders have their own set of rules. No one should be surprised that Lenders have sought ways to save money or to speed up the process of approving the loan. No one should be surprised that some Lenders would like to eliminate the appraisal entirely... when they can.

 

[Tom D]

Appraisal Institute's Response to Freddie Mac Research on Hybrid Appraisals​

Freddie Mac claims that property data reports (PDRs) and hybrid appraisals outperform traditional appraisals in identifying serious property condition issues, yet the enterprise has not released the full research study supporting these conclusions.

Now this is the most interesting thing i read here. PDR's outperform appraisers in 'identifying serious property conditions'. You appraisers are missing serious property conditions. Take a construction class & some home inspection classes, you dopes. Oh wait, FHA just confirmed that an appraisal is an observation not an inspection. PDR's, not trained at all, are doing better observations than appraisers. This is like saying nurses can do better operations that surgeons on the whole.

This is the big propaganda lie. Say the most outrageous lie, keep saying it and soon the stupid will believe it. Then they can look good for what they were going to do anyway. Hey look, it's more better now.

 

[djd09]

No one said that.. or bent anything. Only appraisers are required to comply with USPAP. The Lenders don't have to. Lenders have their own set of rules. No one should be surprised that Lenders have sought ways to save money or to speed up the process of approving the loan. No one should be surprised that some Lenders would like to eliminate the appraisal entirely... when they can.

oh sure...save money speed it up...they used to call them liar loans....how did that work out?

 

[shrubberyvaluation]

If the scumbags that have been pushing these things over the years, had any integrity whatsoever, they would’ve made the case that obviously a certified or licensed appraiser should be the person doing the inspection portion of the appraisal when one is required. There’s a very deliberate reason why these people chose out of work real estate agents and Uber drivers.

At the very least a trainee selected by the appraiser.

I'm curious why do you think they select real estate agents?