No, we do not believe that a printout with informal information from a real estate sales website or a county assessor would suffice as an evaluation of a property’s value for loan underwriting purposes.

The Interagency Appraisal and Evaluation Guidelines permit financial institutions to use evaluations in lieu of appraisals for transactions under $250,000, but they must be able to “demonstrate that an evaluation . . . provides a reliable estimate of the collateral’s market value . . . .”

The Interagency Guidelines state that broker price opinions are unacceptable, as are competitive market analyses (both of which are comparable to the property value estimates provided on websites like Zillow): “{I}nformation on local housing conditions and trends, such as a competitive market analysis, does not contain sufficient information on a specific property that is needed, and therefore, would not be acceptable as an evaluation. The information obtained from such sources, while insufficient as an evaluation, may be useful to develop an evaluation or appraisal.”

The Interagency Guidelines also state that property tax data, such as a printout from a county tax assessor, would likely be insufficient alone: “An institution may not rely solely on the data provided by local tax authorities to develop an evaluation unless the resulting evaluation is consistent with safe and sound banking practices and these Guidelines. . . analytical methods such as TAVs [Tax Assessment Valuations] generally need additional support to meet these Guidelines . . . .”

We recommend reviewing the Interagency Guidelines sections on Evaluation Development and Evaluation Content for a full explanation of how to prepare an adequate evaluation.

For resources related to our guidance, please see:

• FDIC Appraisal Regulations, 12 CFR 323.3(a) (“An appraisal performed by a State certified or licensed appraiser is required for all real estate-related financial transactions except those in which: (1) The transaction value is $250,000 or less; . . .”)

• Interagency Appraisal and Evaluation Guidelines (“An evaluation must be consistent with safe and sound banking practices and should support the institution’s decision to engage in the transaction. An institution should be able to demonstrate that an evaluation, whether prepared by an individual or supported by an analytical method or a technological tool, provides a reliable estimate of the collateral’s market value as of a stated effective date prior to the decision to enter into a transaction.”)

• Interagency Appraisal and Evaluation Guidelines (“A valuation method that does not provide a property’s market value or sufficient information and analysis to support the value conclusion is not acceptable as an evaluation. For example, a valuation method that provides a sales or list price, such as a broker price opinion, cannot be used as an evaluation because, among other things, it does not provide a property’s market value. Further, the Dodd-Frank Act provides ‘{I}n conjunction with the purchase of a consumer’s principal dwelling, broker price opinions may not be used as the primary basis to determine the value of a piece of property for the purpose of loan origination of a residential mortgage loan secured by such piece of property.’ Likewise, information on local housing conditions and trends, such as a competitive market analysis, does not contain sufficient information on a specific property that is needed, and therefore, would not be acceptable as an evaluation. The information obtained from such sources, while insufficient as an evaluation, may be useful to develop an evaluation or appraisal.”)

• Interagency Appraisal and Evaluation Guidelines (“Tax Assessment Valuations (TAVs). An institution may not rely solely on the data provided by local tax authorities to develop an evaluation unless the resulting evaluation is consistent with safe and sound banking practices and these Guidelines. (See the Evaluation Development and Evaluation Content sections.) Since analytical methods such as TAVs generally need additional support to meet these Guidelines, institutions should develop policies and procedures that specify the level and extent of supplemental information that should be obtained to develop an evaluation. Such policies and procedures also should require the use of an alternate valuation method when such information does not support the transaction.”)