CRE Innovations Technology Solutions Technology

Making the Move to Virtual Inspections

Cost and time savings for off-site inspections are still dependent on the human element.

While owners and lenders have used virtual property inspections for some time now, the COVID-19 pandemic has placed them firmly front and center as companies look for ways to adapt while adhering to health and safety guidelines. Industry leaders like Freddie Mac now conduct virtual inspections on a widespread basis, and many in commercial real estate see the appeal of completing an inspection via a screen rather than spending time and money to fly an inspector out to a property. When most of the country is forced to conduct business digitally, virtual inspections seem like an obvious choice — but they present some drawbacks, and it's important to compare the potential risks and benefits before deciding how to inspect your next property.

Working With On-Site Staff

The success of virtual inspections depends heavily on the on-site property management staff helping to facilitate the property walk-through. For a virtual inspection to match the in-person alternative accurately, individuals on both ends of the live stream must be extremely thorough. Every corner of the property must be viewed, and issues impacting the assessed property value must be presented with complete transparency. In many cases, these concerns aren't an issue. Many well-trained on-site staff approach their role in the virtual inspection process seriously, facilitating comprehensive and precise inspections. However, some staff will miss key components of the property, leaving the inspection vulnerable to inaccuracies due to insufficient data. From a remote position, it may prove difficult to ascertain how thorough or forthcoming your on-site contact is and if you've garnered an accurate representation of the property.

The success of virtual inspections depends heavily on the on-site property management staff helping to facilitate the property walk-through.

Wi-Fi and Cell Coverage

While more populated areas of the country have strong Wi-Fi and 4G/5G cell reception, a significant portion of the U.S. still has insufficient — or even nonexistent — connectivity. Even in the areas with generally strong coverage, certain portions of a building may lead to cell or Wi-Fi connectivity lapses. Clearly, this presents a challenge when conducting an inspection virtually. There are times when navigating an entire property without losing connectivity is an issue.

If an inspector cannot view portions of the property or if the video call continually drops or is unable to connect, the integrity of the inspection is compromised. Poor connectivity also makes the virtual inspection process lengthier, more cumbersome, and may result in insufficient data for the inspector. The inability to assess the level of connectivity of any given building creates a significant challenge for inspectors. If coverage is lacking, a virtual inspection might not even be possible, potentially resulting in costly delays and impacting a property's appraisal and funding. 

Virtual Inspection Technology

The technology available to conduct virtual inspections has evolved in recent years, with multiple apps streamlining the process for inspectors. While some industry participants still use traditional video conferencing apps along with manual documentation methods, applications designed for virtual inspections guide inspectors through the process of completing checklists, collecting photos and video, and storing the necessary documentation. A central hub housing all this information improves the thoroughness of a virtual inspection while making the process more efficient for both the inspector and on-site staff. As the adoption of virtual inspections continues to grow, the technology will undoubtedly improve to address the industry's needs and challenges.

Virtual Inspection


Data Management

After inspectors work with on-site staff to collect photos, videos, and other data from a virtual inspection, they must determine which elements to include as part of the official loan documentation and what can be discarded. An industry standard doesn't yet exist for storing virtual inspection data, which can result in either missing documentation that impacts the accuracy of an appraisal or excess information that creates unnecessary storage costs. Given the large size of video files, the storage of virtual property data is more challenging and expensive than it may seem. As virtual inspections become more widely used, the need for increased storage will only continue to mount. Security must also be addressed when deciding how to collect and store information, because popular video conferencing applications pose well-known vulnerabilities that may leave inspection data open to breaches.

Virtual inspection technology will be leveraged as a tool to improve — rather than replace — in-person inspections. By coupling technology with human judgment, we can enhance property inspections without compromising their validity.

Time and Money

Two frequently touted benefits of virtual inspections are the time and cost savings compared to in-person alternatives. These pluses can be realized in many cases. Airfare, hotels, and other costs add up quickly, and travel consumes a considerable amount of an inspector's time. However, virtual inspections, from a cost perspective, typically come with several hundreds of dollars in fees. For companies flying inspectors across the country, these fees may be less than travel costs, making virtual inspectors the more economical option. But for organizations with inspectors within a two- or three-hour drive or flight of most properties, it is often less expensive to conduct the inspection in person. This cost-benefit analysis must be completed on a case-by-case basis, depending on where the property and inspector are located. When evaluating time savings, virtual inspections almost always beat in-person - except in cases where a virtual inspection must be redone in person due to poor connectivity or other issues. 

The Importance of Human Judgment

No matter how effective the technology or on-site support staff, virtual inspections simply can't replicate human judgment. It's simply not possible to incorporate the same level of human observation and reasoning when an inspection occurs via an iPad or similar device. No matter how much time or money you save with a virtual inspection, none of it matters if the data isn't useful in accurately assessing a property.

Ideally, virtual inspection technology will be leveraged as a tool to improve — rather than replace — in-person inspections. By coupling technology with human judgment, we can enhance property inspections without compromising their validity.

Matthew Stoehr

Matthew Stoehr is the chief technology officer at Sabal, a financial services firm specializing in commercial real estate, lending, and investing. Contact him at

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