“Flavors” of Appraisal Reports

Flavors of Appraisal Reports. 

SEE the differences between the THREE versions of the 1004 reports, what I euphemistically call “flavors.”

Appraisers, recent watercooler discussions by appraisers focus on the new ‘desktop’ appraisals many will be requested to do.

Now that the GSE’s have “formally” approved non-appraiser-inspected reports for first mortgage lending (or will very soon – not sure of the exact effective date), you may want to actually SEE the differences between the THREE versions of the 1004 reports, what I euphemistically call “flavors.”

I spent a number of hours at the end of January reviewing our current ‘full’ 1004 form, and the new 1004 (Desktop) plus the 1004 (Hybrid) forms, which ARE in your software package NOW, to see how they compare and differ.

I encourage you to print out each form version for your file. And also print the table below showing the differences between them.

Once you understand the “flavor” differences and reporting protocols, you will then be in a better position to choose to do assignments with one of these two new “flavors”, or not.

Report Comparisons – based on Forms Scope of Work, Assumptions and Limiting Conditions, and Certifications

Current 1004 URAR / 70 1004 (Desktop) / 70D 1004 (Hybrid) / 70H
Subject Inspection by The Appraiser or Trainee Appraiser; complete visual inspect of exterior & interior Apparently anyone of appraiser’s  choosing using any method which provides necessary details, photos and floor plan; ‘Workforce’ not ID’d on form page 3 but ideally should be named in the report Lender engages Inspection person who uses a Property Data Collection Report, to include a Floor Plan and photos; ‘Workforce’ ID’d on form page 3
Subject Home Diagram Sketch ‘provided by appraiser’ including exterior wall dimensions (interior wall partitions not required unless adverse design problems found at time of inspection) Floor Plan including exterior wall dimensions and interior wall partitions included in their locations; source for this can be owner, borrower, sales agent or other person using phone app, or any other data source Floor Plan – completed as part of the Property Data Report given to appraiser (same details as Desktop)
Subject property data sources Public and/or Private data records; appraiser inspection Public and/or Private data records Interior and Exterior Property Data Collection Report
Appraiser’s reliance on data sources Assumes Public and/or Private data sources are ‘reliable’ without stating guarantees about data accuracy Assumes there are no “Material Omissions”; no guarantees about data accuracy; reliance on third-party data sources “Material Omissions” not mentioned; no guarantees about data accuracy; reliance on the Property Data Collection Report
Comp & Neighborhood Inspections – from at least the street By Appraiser or Trainee; in Scope of Work Neither required Neither required
Report Intended Use First mortgage loans, Second Mtg, HELOC, FHA, VA, USDA First mortgage loans No notices yet from other ‘agencies’ about adopting this report Unsure – 1st Mtg loans? No notices yet from other ‘agencies’ about adopting this report
Intended User; who may ‘rely’ on report Lender/Client; Certification #23 Lender/Client; Certification #23 Lender/Client; Certification #23


Dave Towne
Image credit flickr - Frank Hebbert
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on e-AppraisersDirectory.com

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7 Responses

  1. Avatar CJK says:

    One of my lenders called to see if I would be doing the desktops. I told her no, she said if the other appraisers on the panel said no that the UW would most likely just stay with the full 1004 (appraiser inspection with photos). They believe the desktops are too much of a risk for the appraisers and the lender. They do not understand why FNMA is pushing this on everyone. She asked me why would an appraiser want to take on this liability, I said many of us will not and you get what you pay for. We will see.

    • Avatar HELEN says:

      They are being pushed because: 1) AMC’s are taking a lion’s share for each one done 2) the software originator’s are getting a piece of the action 3) the third parties are taking no responsibility 4) we are the only ones standing in the way of this 5) they are getting well known veteran appraisers to sell their businesses to jump on their bandwagon…for a price. I will not do them.

      • Baggins Baggins says:

        Helen, excellent. If I may politely add; Corporate interests are progressing into real estate at a rapid pace and are also pushing for a more commercialized model as they seek to turn an increasing volume of properties to rentals. Even accepting the use of LIDAR 3d modeling technology for hybrid inspection results in individual homes having a new and more detailed ‘digital fingerprint’ within cloud based data systems. This lines them up for further exploitation down the line once chain of data custody is broken as privacy rules and client confidentiality rules do not carry the same applicability into the future. Desktops with remote third party inspectors are a data goldmine for big tech seeking to break further into real estate.

      • Avatar That Scott guy says:

        ” 1) AMC’s are taking a lion’s share for each one done…”
        The first one of these sent to me the AMC was paying $115 and charging the lender $400. No joke.

        I say this every time, but these desktop products are the death rattle of the appraisal profession.

    • Avatar CJK says:

      Update from my first post:

      One of my lenders just got back to me she said that none of the appraisers on the approved panel will be doing the desktops, GOOD FOR THEM, stay united. So far of my 6 lender clients the appraisers who work for 3 of them have said no. Many of these appraisers also work for the other 3 lenders. My lender clients detest AMCs so we will see how this all plays out. FNMA I will not be doing $100 reports, nor will I ever put my clients at risk. Skippy can do it. I just need to hold out for 3 more years. I feel sorry for the new appraisers, make sure your E&O covers you.

  2. Avatar CJK says:

    My buddy just called to tell me that he is doing a full 1004 (inspection with photos) on a property that just had a desktop. The seller and listing agent were upset that the first appraiser did not look at the property. So now the lender has to pay $700 for a new appraisal because they already charged the borrower for the desktop. So how is this disaster saving anyone any money? Way to go FNMA, you screwed up another one.


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“Flavors” of Appraisal Reports

by Dave Towne time to read: 2 min