George Paquette,
Chief Operating Officer of Valligent
With 2024 quickly approaching, many people are speculating about what is next. What is next for the housing market? What is next for interest rates? What innovative technologies will we see? What new regulations will come down the line?
There are so many questions about the future of the mortgage industry, but one we will focus on is what lies ahead for property valuations. While the appraisal industry has seen more limited change, some shifts in recent years have been pushing property valuations towards the digital world. In their efforts to enhance the mortgage borrowing process, Government-Sponsored Enterprises (GSEs) are embracing innovative products that are both time and cost-effective while also minimizing property valuation risks. This shift paves the way for advancements such as virtual inspections.
Virtual inspections unite inspectors and technology to allow eyes on the property without leaving your desk. Facilitated by simple and safe technology, a video connection allows the inspector to see the home as if they were there. Virtual inspections help inspectors, particularly appraisers, maximize their time and provide benefits for borrowers and lenders, too. Let us take a closer look below.
Appraiser Experience
Borrower/Seller Experience
The GSEs have made it clear that they want to support a better borrower experience through products like virtual inspection and other technologies that can help transactions move more quickly and smoothly to the closing table. For borrowers, the speed and convenience of virtual inspections will be the most significant benefit. It can sometimes take weeks or months to schedule an appraisal, but the process is much simpler with virtual inspections. There only needs to be one property contact present; the appraiser does not have to travel to the location, and all the scheduling can easily be done electronically at a convenient time for everyone involved.
Because Valligent has made the borrower and appraiser experience the main priority, the virtual inspection is likely to gain traction as borrowers and appraisers gain experience using the technology. The pandemic made people more comfortable with technology. Consumers who never would have considered online shopping, app food, and grocery delivery services pre-pandemic not only used them during the pandemic but are still avid users today, as they have grown accustomed to the convenience. While it was hard to envision a world where people would opt for the virtual inspection over a traditional appraisal, this is an excellent example of the shift an industry and its consumer base can make over the span of only a few years – and it shows that, for many people, convenience is king.
The virtual inspections not only make the borrower’s experience more convenient but will also make it more comfortable for homeowners. Simply put, people want to avoid strangers coming into their homes. The pandemic has made everyone more wary of being around people, and people’s homes have become safe spaces for them. The virtual inspection brings a completely contactless option into the market that keeps loans moving without compromising the homeowner’s personal space.
The borrower experience is a critical component for the industry to keep in mind. While appraisers and lenders deal with multiple loans daily, borrowers only go through this process once every 10-15 years. Making the experience as simple and seamless as possible will go a long way with them, so this industry must build its technology and processes with the borrower in mind.
Lender Experience
Virtual inspections will also have benefits for the lender. Appraisals moving faster means loans can close faster, and lenders can do more. If reducing cycle times is not enough, the cost savings lenders can potentially see will undoubtedly be a benefit, especially when the market is challenging, and every lender is looking to expedite processes wherever they can.
Risks
While there are so many benefits to virtual inspections, there will also be some risks that the industry will need to be prepared for. The primary concern about virtual inspections is that a property contact may not choose to show the appraiser everything during the inspection, or there could be some details that appraisers cannot notice virtually. However, training on how to direct the property contact and what to look for can help combat this.
There is also the risk of not having access to the technology needed to complete an inspection. Whether it be a property contact not having internet or mobile device access or the connection failing during the inspection, there could be some setbacks with the virtual inspection. This is why appraisers should always have a plan B ready to go should they encounter any technical difficulties.
What Lies Ahead
With other areas of the mortgage industry, like title and escrow, leaping into the virtual world in recent years, appraisals are next in line.
As technology continues to improve, appraisers will be able to do more without ever leaving their desks. In an ideal world, appraisals can take place on-demand with technology when the point of contact is ready for the appraisal inspection. There are so many possibilities on the horizon for virtual property inspections.
Ultimately, the future is bright for the appraisal industry. With the help of technology, appraisals can not only keep up with developments in the industry, but they can be at the forefront.
To learn more about Valligent’s virtual inspection offerings, contact: 877-490-0390.
