Drive-by appraisal

What Is a Drive-By Appraisal?

When it comes to lending practices, institutions have many options to choose from to mitigate risk and find property values. A Standard Uniform Appraisal Report is not necessary with every property purchase. One alternative to the conventional appraisal report is an exterior appraisal – most known as a drive-by appraisal.

A drive-by appraisal, true to its name, is a unique appraisal where the appraiser does not enter the home or commercial property they are appraising. Although this appraisal might not include a detailed interior inspection, it is a great alternative to a uniform appraisal report and can be completed much quicker. 

A drive-by appraisal will include an executive summary, a comparable analysis, and a derived market value.

Traditional Appraisals vs. Drive-By Appraisals

Understanding the world of real estate appraisals is essential, and it’s crucial to distinguish between traditional appraisals and drive-by appraisals.

A real estate appraisal is a professional’s impartial evaluation of a property’s value based on a variety of factors. These factors include the property’s physical condition, location, market trends, and comparisons with similar properties. 

The primary purpose of real estate appraisals is to determine a property’s fair market value, which is vital for various real estate transactions, such as buying or selling, refinancing, or estate planning.

While traditional appraisals involve a comprehensive, on-site inspection of a property’s interior and exterior, drive-by appraisals typically rely on an external examination and neighborhood assessment, making them faster and more cost-effective. 

Understanding the differences between these appraisal types is essential for making informed decisions in real estate transactions.

Factors Considered in a Drive-By Appraisal

In a drive-by appraisal, several critical factors come into play when determining a property’s value. 

Property Condition

First and foremost, the property’s condition plays a significant role. While the appraiser’s examination is limited to the exterior, they still assess the overall maintenance, curb appeal, and any visible structural issues. 

Location & Neighborhood

Location and neighborhood are equally important factors, as they can significantly impact property values. Appraisers take into account the area’s desirability, safety, and proximity to amenities and schools. 

Market Trends

Market trends are a crucial consideration, reflecting the current real estate climate, including supply and demand, interest rates, and economic conditions.

Comparable Sales

Comparable sales, or “comps,” are used to assess how similar properties in the vicinity have sold recently, providing a benchmark for the subject property. 

Zoning & Environmental Factors

Additionally, zoning and environmental factors are assessed to ensure the property complies with local regulations and is not subject to any environmental hazards or restrictions that could affect its value. 

These factors collectively contribute to the appraiser’s determination of the property’s fair market value in a drive-by appraisal.

Advantages and Disadvantages of Drive-By Appraisals

Drive-by appraisals offer both advantages and disadvantages, making them a practical choice in specific circumstances while posing limitations in others.


One advantage of drive-by appraisals is that they are notably faster than traditional, comprehensive appraisals, making them a preferred choice for clients seeking quick property valuations. 

They are also more cost-effective, requiring less time and fewer resources.


However, there are drawbacks to consider. Drive-by appraisals provide limited property information as appraisers only assess the property from the exterior, which can result in a less accurate valuation. 

They are best suited for straightforward, uncomplicated properties and may not be appropriate for complex or unique properties that require in-depth interior examinations.

When Should a Drive-By  Appraisal Be Used?

While every institution will evaluate and consider different compliance products, there are instances when institutions prefer to use an exterior appraisal. Below are just a few examples of when an exterior-only appraisal can be used.

The Interior Condition Is Already Known

The interior condition of a property can already be known either by a previous inspection or by pictures provided to the appraiser. If the interior condition is known, scheduling an appraiser to enter the property may not be necessary.

The Loan-To-Value Is Low

When the loan-to-value is low on a transaction, institutions can use other appraisal products to find home value. Like the loan limits for evaluations, an institution may choose an exterior-only appraisal if they feel a traditional appraisal is unnecessary. 

A Recent Appraisal Was Performed

If an appraisal was recently performed and the property condition has not changed, interior conditions may not need to be reinspected.

Should Drive-By Appraisals Be Used All the Time?

While exterior appraisals are a fantastic, compliant tool that allows lenders to make lending decisions, they should not be used in every circumstance. There are many instances where the interior condition of the property is a key factor in mitigating risk. 

For example, if a lending institution adds a new loan and does not know the interior condition of the property. In this instance, our Restricted Appraisal Report paired with an interior inspection would be an excellent option!

Partner With Akrivis Today

At Akrivis, our version of a drive-by or an exterior-only appraisal is called a restricted appraisal. Contact our team to learn more about our restricted appraisals or the valuation solutions that we offer.

You can also order a restricted appraisal now from Akrivis if you know that’s the right valuation solution for you!

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