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A drive-by appraisal is an estimation of the value of a property without any survey or inspection conducted of the interiors.
This is as opposed to a typical appraisal that is more comprehensive.
While a more thorough appraisal would be ideal, a drive-by appraisal is not against the law in anyway and is acceptable as long as the methodology is disclosed to all relevant parties.
Sometimes also called a summary appraisal, conducting a drive-by and declaring it as a regular home appraisal is an intention to mislead and could be deemed as fraud.
There are actually come valid reasons why a drive-by exterior appraisal is conducted instead of a standard one by an appraiser.
The most common reason being that the appraiser was refused entry because:
- Occupants are enraged at foreclosure
- Divorced spouse refuse to accept the reality of the situation
- Abandoned property
But usually they are done because lenders want to compare property listings in the vicinity, or when they have already conducted a full appraisal on the property in the past and just needs to verify that it’s still the same house.
Not only will this speed up the process of valuation, it’s also inexpensive.
They can be completed by as little activity as snapping photos from the street outside. Then value is estimated with the photographs and available market data.
Do proceed with caution when buying houses that are not properly appraised.
With no real idea of how the condition is inside the house, you could potentially be looking at huge bills for repairs of damages.