A major selling point for completing hybrid or bifurcated appraisals is that the appraiser will save a good deal of time by not inspecting the property, not taking photos of comparable sales, and not sitting in traffic. However, the notion that an appraiser could complete a hybrid/bifurcated appraisal in less than an hour is simply too good to be true. Below, we discuss realistic time expectations for completing these types of assignments. Then we outline four potential advantages of incorporating hybrid or bifurcated appraisals into your appraisal product offerings.
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Too good to be true
Appraisers are regularly told by proponents of bifurcated and hybrid appraisals that the segregated work model is designed so that the signing appraiser can complete the valuation in less than 60 minutes. But in reality, the appraiser’s research, data verification, analysis, development, and reporting are markedly similar to a traditional full appraisal.
An appraiser should realistically consider the time spent on the inspection process of a traditional full appraisal and compare it to a hybrid or bifurcated appraisal assignment for the same intended use, property type, definition and type of value, and the market area.
For instance, the time spent on a traditional full appraisal of a one-story tract home located in a subdivision within 15 miles of the appraiser’s office for the purpose of mortgage lending takes 5 hours to complete, on average. The time allocated to inspecting the home, scheduling the appointment, taking photos of the comparable sales, and the time spent traveling to and from the home averages 1.5 hours. The remaining 3.5 hours is spent on completing the research, analysis, and reporting.
Thus, is it realistic to believe that a credibly developed appraisal can now be completed in 30 minutes? No. The development, analyses, and reporting will still take 70% of the time of a traditional full appraisal, and the appraiser should charge accordingly. In other words, it would make sense that the appraiser charges 70% of the typical average fee of a traditional full appraisal assignment for this assignment.
Benefits of hybrid and bifurcated appraisals
Now that we’ve set realistic expectations for the amount of research, analyses, development, and reporting involved, let’s look at the potential advantages of completing hybrid or bifurcated appraisals.
Here are just a few potential benefits:
Bifurcated appraisals can be an excellent opportunity for supervisory appraisers to advance a trainee’s experience on completing inspections.
Some appraisers may prefer to perform field work, while others prefer the analysis part of the appraisal process.
Appraisers who have mobility or health concerns, or those who want to semi-retire and complete appraisals without having to complete inspections, might find these products a good fit.
In other industries such as science, education, medical, and engineering, it is common for work to be bifurcated for achieving efficient and credible results. It makes sense that one appraiser inspects, measures, and photographs the property, an assistant verifies sale transactions and gathers publicly available data, and the appraiser reconciles and verifies the collected data, analyzes the data, and reports his or her conclusions.
Do you feel that bifurcated and hybrid appraisal services may be a viable and advantageous product to incorporate into your appraisal product offerings? Gain expertise in these types of assignments with our new CE course: Best Practices for Completing Bifurcated and Hybrid Appraisals.
Written by Jo Traut. Jo A. Traut is an appraisal curriculum and content specialist at McKissock Learning. She is a real estate appraisal and valuation compliance professional with over 20 years experience in residential appraising, operations management, risk analysis, quality assurance, and appraisal regulations.