Home Appraisals: electronic or in-person?

Lenders often choose an electronic home appraisals vs. in-person appraisals because of cost

Q: I really like and appreciate your “Real Estate Matters” column. About a week ago, you had a column about how to protect your home from someone trying to take out a fraudulent mortgage against it. In the story, you said an appraiser would do an in-person appraisal and come inside to view the house. We’ve done several refinances over the years and have never had an appraiser come by and ask to view the inside of the house. These appraisals were electronic. Just curious about that.

A: Thank you for your comment. And you are correct. In many situations, lenders will not require an in-person appraisal on a refinance of a home. In some cases where the owner’s refinance is less than 70 percent of the value of the home, the lender may not order an appraisal at all. In other cases, lenders may use an electronic appraisal and never send out an appraiser for an in-person evaluation.

Lenders often order electronic home appraisals rather than in-person appraisals because of cost

Typically, when you buy a house, the lender will order an appraisal, although it may also be electronic rather than in-person.

The column you read wasn’t actually about appraisals but rather about being aware of circumstances that might indicate something was going on with your property that you had not initiated. These days, you have to wonder why someone is calling you. Why someone has invited you to apply for something. And, why someone would tell you that you’ve won something. If you’re not skeptical, you’ll soon be a victim of phishing, vishing, or some other heinous form of identity theft.

Lenders look at home appraisals before approving a refinance

In that column, the reader wondered whether they should carry a balance on their mortgage rather than pay it off. They thought that if they had a mortgage on their property, that mortgage would be a way to prevent title thieves or other scammers from stealing title to their home.

That won’t work. They’ll just steal whatever equity you do have. Scam artists will try every way to make a quick buck. But here’s the good news: if you’re paying attention, and put some protections in place, it’s far less likely you’ll get scammed out of your home equity.

Protect yourself by signing up for any notification systems offered by your local governmental office that handles the filing and recording of real estate documents. These notification systems will let you know when something is filed or recorded against the title to your home. Typically, they’re in the form of text messages or emails.

If you see someone doing an in-person home appraisal, ask who hired them

You can also protect yourself by questioning anyone you see walking around your property. If a lender has sent someone to do an in-person appraisal, and you didn’t apply for the loan, be wary. Ask the appraiser what he or she is doing and which lender hired them.

We also think you monitor your credit history regularly. Review it to see if there have been any new credit accounts added to your file. For some people, placing a freeze on your credit is worthwhile. A freeze won’t keep potential creditors or lenders from viewing your credit history but it is supposed to prevent them from opening new credit lines in your name.

Protect your home value by using 2FA on your digital assets

And finally, use two factor authentication (sometimes noted as 2FA) on any website you log into, but financial websites in particular. This means that when you log into a site, the site will send you a text to your phone and you use the code on your phone to then complete the login to the site. You might also subscribe to an authenticator app, which constantly provides two-factor authentication codes. This is an excellent way to protect yourself and your assets.

At the end of the day, you really need to keep a tight watch on your personal finances and your credit. Be skeptical of anyone who calls with the “deal of the century.” Know that more than half of the email in your inbox right now is likely a phishing scam, just waiting to catch you at a moment of weakness. If you don’t pay attention to your house, your credit score and your financial assets, you might wake up one day and find that they’ve been stolen right from under your nose.

Home Appraisals: electronic or in-person?