The COVID-19 pandemic has impacted virtually every industry – including the appraisal industry. Scott Reuter, Freddie Mac’s chief appraiser and Single-Family director of valuation, answers questions about how technology has helped appraisers during the pandemic and what lasting effects it may have on the industry.

Q: Several new technologies have been used during the COVID-19 pandemic to help appraisers gather property information and photos and assess condition. What specific capabilities have proven most beneficial and why?

A: Progressive web applications (for example Clear Capital’s OwnerInsight, Anow’s Walkthrough and Bradford Technologies’ Onsight) that guide homeowners through a limited set of questions, ask them to upload photos and then output the information straight to the appraiser have been the most beneficial. These technologies have allowed an appraiser to understand and verify core property characteristics, while not needing to actually enter a home. In short, the technology has allowed them to keep doing their jobs while maintaining social distancing guidelines to protect the health and safety of everyone involved in the process. We are encouraging appraisers to voluntarily deploy these technologies as a means of augmenting desktop and exterior-only assignments.

Q: Do you see any of the technology used by appraisers during the pandemic continuing post-COVID-19?

A: I certainly hope so. An important part of Freddie Mac’s appraisal modernization testing and outreach over the past couple of years has been to better understand common pain points and industry concerns. A theme we heard repeatedly was a desire for changes that would help appraisers do their job more efficiently. So, perhaps these technologies could continue to be used in the future on a subset of lower-risk loans to help inform appraisers of interior condition and salient property characteristics.


Q: Would use of these technologies now be sufficient to meet the requirement for an appraiser’s physical inspection? 

A: No. Viewing the interior virtually or remotely is not the same as a personal inspection of the property by the appraiser. The Form 1004/70 (along with Forms 456, 70B, 72, and FNM 2090) requires the appraiser to certify that they “performed a complete visual inspection of the interior and exterior areas of the subject property.” This means virtual inspections are insufficient to comply with Form 1004/70 and other current interior/exterior appraisal form requirements. Also, Uniform Standards of Professional Appraisal Practice (USPAP) reminds us that it would be misleading for an appraiser to indicate that an interior inspection of the subject property was performed when, in fact, the appraiser only viewed interior photos, video, or other data from technological solutions.

However, that doesn’t change the fact that these technologies have been very valuable during the pandemic. And their more widespread use during this time is allowing us to learn more about them to better understand where and how they might be deployed in the future, to help bring efficiency to the appraisal process while also maintaining acceptable collateral risk.