Are virtual property inspections here to stay?


Now that the door is open, virtual home inspections have gone from being an option of last resort to a window into the future.

The pandemic has done some interesting things in the real estate market. As budgets tightened, the available housing stock shrank as prices continued to soar across Australia. Meanwhile, borrowers took advantage of low interest rates by seizing the opportunity to refinance. And with many city dwellers leaving cities to make the most of remote working, there has been no decline in demand for nationwide assessments.

Even without the impacts of COVID-19, there is no doubt that the property valuation industry was already ready for digital transformation. The pandemic has simply accelerated the use of new technologies to provide assessment services with a greater emphasis on “virtual” inspections.

Continuity in times of crisis

The first thing businesses and industries look for in a crisis is continuity. How quickly can they reshape their service models so they can keep running, while finding ways to improve the customer experience?

The Australian Property Institute (API) deserves praise for taking the lead. With appraisers and lenders seeking advice on business continuity, API consulted with the industry and in March 2020 released the “Valuation Protocol – Guidelines for the Declared Hour of Crisis”. API and / or state of emergency affecting physical inspections of real property ”(Assessment Protocol). The assessment protocol outlined alternatives to physical inspections, which can be completed on the industry-approved API PropertyPRO report template.

Key to the direction of the API was its assertion that “Nothing in this protocol is intended to alter the minimum assessment expectations or reduce the standards by which assessors should conduct their assessment.” It also does not modify the individual commercial agreements between the evaluators and the principals / clients. “[1]

The assessment protocol specified a hierarchy of accepted approaches, with full physical inspections at the top. Alternatives included external inspections, partial external inspections and virtual inspections, using a range of tools, including existing and provided data and real-time virtual tours provided by the occupant of the premises.

The implementation of the evaluation protocol indicates that API was confident that evaluators were ready to respond appropriately, while also providing the impetus for evaluation companies to initiate or accelerate software development efforts that would enable virtual inspections.

Adopt the new protocol

Before the pandemic, some assessment companies had already developed proof of concept solutions for virtual inspections. The onset of the crisis created the need for a full implementation of these digital inspection models in the short term. With CoreLogic, these early adopters helped drive the consultation between API and industry to put the agreed solutions into practice.

Meanwhile, CoreLogic was also working on a prototype process for digital assessments. We launched the ValConnect Download Portal (ValConnect Portal) in April 2020, shortly after the release of the Assessment Protocol. The ValConnect portal allows the occupant to securely upload photos via a link sent to them by the assessors. This service has been made available to industry through ValEx at no additional cost, to ensure that all companies are always able to serve customers within the CoreLogic ecosystem.

While Victoria, sadly, didn’t have much time without lockdown restrictions, New South Wales had several months of relative freedom when physical inspections were able to restart. But when the state was hit by the COVID-19 Delta variant and stalled again, virtual inspections resumed.

But thanks to the systems and processes that many assessment companies had in place during the 2020 state of emergency, this time around they were ready to embrace virtual inspections.

Where from here?

Since the start of the 2021 restrictions, the responsiveness of the assessment and API industry has allowed for an almost seamless adoption of virtual inspections. The challenges also highlighted the agility and willingness of the industry to adopt new ways of working.

The appraisal industry has essentially tested a “proof of concept” on appraising properties without full physical inspections – an approach that might have been unlikely before the pandemic. And while many businesses have benefited from the efficiencies of virtual inspections, others are reporting delays. It is likely that these delays stem, at least in part, from the challenges of performing virtual assessments in a framework optimized for full physical inspections.

We have learned from this experience that in many cases properties can be properly assessed without a full physical inspection. The next logical step is to rethink the evaluation framework to optimize the virtual experience.

With vaccination rates increasing and lockdown restrictions easing in NSW and Victoria, it is likely that the API will declare an end to the current state of emergency, which currently applies. at national scale. This will also end the assessment protocol. And while some industry sectors are likely to favor a return to full physical valuations, there is no question that virtual valuations have proven to be a feasible alternative in many cases, and may become just as common as traditional valuations. – as long as we can. get the right frame.

[1] Page 3 of the Assessment Protocol.

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