BiggerPockets Podcast 007: Making Appraisals Work For You with Ryan Lundquist

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Today on the BiggerPockets Podcast we sit down with Ryan Lundquist, a professional real estate appraiser in the Sacramento area. An appraiser is one of the most important professionals that you, as an investor, are likely to deal with over and over in your business. Furthermore, knowing how to deal with an appraisal, especially when it comes in too low, is a skill that can help any investor.

Keeping with the “actionable content” approach that BiggerPockets is known for, this podcast will help you improve your investing by pulling back the curtain on the appraisal industry through our discussion with Ryan.

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Download the Transcript

Read the transcript of Episode 007 with Ryan Lundquist here.

Listen to The Show on iTunes

Click here to listen on iTunes.

Listen to the Podcast Here

In Today’s Podcast, We Cover:

  • How you can determine what a property is worth.
  • When you should, and shouldn’t, use Zillow or other AVMs.
  • How to challenge a bad appraisal.
  • What to do when sales prices are higher than the appraiser will go.
  • Dealing with the Hedge Funds in the market.
  • Tips for getting your appraisal amounts higher by bringing your own comps.
  • Dealing with FHA loans in your investments … and the dreaded FHA Appraisals.
  • The most common property condition problems an appraiser is going to ping you on.
  • How to deal with lead based paint in your investments.

Links From the Show:

Tweetable Topics:

“The first step in discovering your property value is defining your location.” (Tweet This!)

“Why not be proactive instead of reactive?” (Tweet This!)

“In business, go in as a bridge builder, not a name caller.” (Tweet This!)

“Investors: Get to know an appraiser – take them out to lunch, build that relationship.” (Tweet This!)

“Understand your market at the same level that your appraiser does.” (Tweet This!)

About Ryan

Ryan Lundquist is a certified residential real estate appraiser based in Sacramento, CA. He provides appraisals and valuation consulting for a variety of clients including CPAs, attorneys, investors, home owners and lenders. Ryan is an avid blogger, bike rider, optimistic doer and family man with two sons.

Ryan’s BiggerPockets Profile
Ryan’s Company Website:

About Author

Thanks for checking out the BiggerPockets Real Estate Investing & Wealth Building Podcast. Hosts Joshua Dorkin & Brandon Turner strive to bring top-notch educational content and interviews to our listeners -- without the non-stop pitch prevalent around the industry. With over 180,000 listeners per show, the BiggerPockets Podcast has become the biggest real estate podcast in the world. But don’t take our word for it. We’re the top-rated and reviewed real estate show on iTunes — check it out, read the reviews on iTunes, and get busy listening and learning!


  1. Great Podcast, thanks! I still didn’t get where the best place to get comps(purchase/rentals) is, from AVM’s or the court houses, etc. I’ve read on BP Zillow/etc is not accurate and the court house is old info.

    • Terry, good question. The local MLS is very likely the best source. Usually only MLS subscribers (paying customers) can access the data though. I would be extremely cautious about relying on Zillow for anything – especially a purchase price.

      • I will 100% second Ryan’s vote for the mls and I really don’t see any other source anywhere close behind the mls. I’m a realtor as well as a rehabber and I honestly don’t know how I would possibly accurately place values on anything without mls access or a realtor that was happy to spend lots of his/her free time comping random properties for me. I also spend time on another forum site where realtors talk shop about the realtor biz and I see it over and over and over again where someone comments on the totally screwed up “zestimates” or whatever they’re called when Zillow tries to estimate property values. Usually its where a realtor is complaining about having to convince yet another customer that the zestimate for the house they currently own or the house they want to buy is totally wrong! Government records could be somewhat helpful, at least they should be accurate, but they usually are simply a date and a price, mls adds so much more valuable info, like days on market, concessions to the buyer, property descriptions, etc. Plus, they also usually have pictures, which can be very helpful in showing the condition of the interior, etc. I do not know what I would do without the mls, so I’d say either get a license or find a realtor with a lot of time on their hands!

  2. Very helpful podcast. Something I’ve wondered about for awhile, as a Realtor and investor. I’ve had an issue recently with a low appraisal due to a miscalculation of square footage, so it was good seeing that covered.

    • Thanks Eric. When square footage is miscalculated, it’s usually an easy fix thankfully. It’s amazing how being off by one feet here and there can really change the square footage. I find in my area sometimes Tax Records simply has the wrong GLA. For instance, last week I measured a house for an investor because he thought the house was actually larger than what records indicated. It turns out it was actually about 200 square feet larger. I’m not sure where the breakdown occurred, but the subject ended up being a superior model in the neighborhood, which definitely impacts marketing for the property. Knowing something like this before the appraiser comes would be huge too so the appraiser expects to be very careful about measuring and reporting the difference.

  3. Talk about great timing for this episode. I fired it up as I was driving back to the city from El Dorado Hills. Kinda funny to be hearing an appraiser from Sac talking about the market while driving down 50. Anyways, great topic and great interview as per usual. Always nice to get the prospective from the other side. Keep up the great work Josh & Brandon!

  4. HELP! I’ve got a short sale going FHA (day 92 now) and as the buyer, I’m happy that the appraisal came in low (bonus for me) and the bank lowered the price to match, BUT the issues with the property that the appraiser wants fixed or inspected in order to approve HUD financing are unclear. When my lender requested a “list” of required repairs &/or inspections, all they got back was “page 10” and it’s pretty vague and up to interpretation. The underwriting department comes back with “needs a structural engineers report” , although that’s NOT specified at all (and way too much $$$) in the appraisal. Note: the home was built in 1925/ effective date of 1978 with the county.
    Appraisal says: A professional home inspection ( had one,I know what the issues are )- to include a wood destroying organism report (gone one, it passes) and an electric code compliance report – specifically, but not limited to the foundation, settlement, water infiltration, wood destroying organisms,exterior door framing/casing (casings are not applicable in WA state per WAC code) and code compliance to include the electrical system.
    All defects found to affect the safety, soundness and security of the property being satisfactorily mitigated (Which ones? I have no idea, there’s no list) – being signed-off as complete by the specific licensed professional – report findings subject to receipt and review by the Appraiser as well as acknowledgement by the Intended User.

    Then the contradictory statement of:
    “Inspection/Compliance Reports as noted: It is anticipated that the subject property will meet minimum HUD/FHA guidelines as defined in Handbooks 4150.2 and 4905.01 and all applicable mortgage letters:

    My agent thinks I should switch lenders….will that make any difference?

    • Kathy, in case you didn’t know, an FHA appraisal is assigned to a property for four months (I believe that is the correct time period). This means even if you switch lenders the same appraisal will be used for your loan. There is a process by which another appraisal can be used if there is something wrong with the first appraisal, but otherwise this appraisal will be staying with your file (assuming it has already been uploaded in the HUD/FHA system already). I say this because if you switch lenders, you’ll still likely be dealing with the same appraiser. But if the lender is the problem and they are not communicating well with the appraiser, that’s another story. Any thoughts from loan pros?

      • Thanks Ryan –
        I’m not disputing that there are work orders to be done, and in fact I want the appraisal to go with the home to another lender if that’s the way I go as I’ve already sunk $1000 into an inspection and appraisal. The reason I’m thinking of jumping lenders is so that hopefully SOMEONE will be able to tell me what those work orders are, which my current lender can’t seem to pry out of the appraiser. Any suggestions for getting my current lender to get this information would be very helpful!

        • Kathy, I don’t really have any suggestions for you. You might just keep trying to communicate. If that cannot happen, and you need a referral for a reputable loan officer, send me a private message. I’m sorry to hear it’s been such a mess for you.

  5. Sounds like Kathy’s issue is not just with the HUD appraisal/report being conflicting and vague, but also the banks underwriter demanding a “structural engineering report” ….where is that requirement coming from. I know here the city does not even require a licensed architect for SF and duplexes so why does the bank? I’d move on to another lender take your $1,000 worth of inspections/appraisals with you. Be sure am tell them you are no getting an engineer unless you think you need one.

    Hey Ryan, so I learned how to tap into my states clerks office to see the 2013 county appraisals. I know before the recent bubble they were considered to be what 10% low? But now when I sold a house for $170,000 mid last year the county was high, $180,000. So how do you use this info? I am using the neighbors house to value the one I am looking at, now I just need to find some pictures inside to put it in perspective, and sq-ft as you teach. BTW Zillow has the correct tax assessment. 😉

    Once I figure what this one house is worth per sq-ft why not use that to determine other home values w/ similar fixtures and finish?

    • So you’ve hacked the county’s system, Terry? 🙂 I’d love to see my county’s figures, though they won’t post until July. Property taxes are going to be going up in my area in light of appreciation though.

      Honestly, I don’t pay any attention to the assessment figures in my area for a number of reasons. If you’re in the same area, you may know this, but just in case, this is why I don’t consider the assessments: 1) They are hit and miss – usually slightly high from my experience (mostly for properties purchased in the past 10 years before and after the “bubble” burst); 2) The assessed values in CA are essentially tied into the date the property was purchased due to Proposition 13. This means each property has a “base year” value (Prop 13 value) where future years of taxation are based on that level. So a property purchased in 1990 will have a very different value than one purchased last year. The “base year value” would be the value in 1990 plus up to 2% annually (temporary adjustments downward can be made if the market declines); 3) The Assessor does not know interior characteristics, so values can be off for that reason; 4) Lastly, values are based on January 1 of the given year, so I tend to pay less attention since I am probably not using that date of value in an appraisal I’m doing.

      If you are looking to determine what a house is worth, it might be helpful to get some recent market sales that sold on MLS. Unless your county has very accurate assessments, it may be worth relying more heavily on MLS sales to give a sense of price per square foot and such.

  6. Lol…sounds like I am fortunate to be in a county that has history of tax appraisal, owners name, and mortgages and are very helpful in navigating the sites. I called the appraisers office yesterday they said they only go in the house if there if asked or appealed. Looks like the assessed values are based on community improvements too which can be misleading. I am able to see mortgages on my counties Register of Deeds site, but that does not tell me what the sales price is. I’ll call next week and see if that is public record somewhere?

    Appraising properties is pretty tough when you don’t have MLS access, and most Realtor’s aren’t going to search for investors in their spare time, especially when we are look at a lot of properties to find a deal. I have few looking around for me but no feedback and I certainly don’t trust their valuations. Seems like a good market to make this info readily available, but then you and realtors be out of a job yikes, just kidding! Last house I sold without a realtor since I was taking a huge loss from the 2008 recession. I used a FSBO broker flat fee service for MLS. Maybe the days of MLS are going away little by little.

  7. Good podcast with lots of good info, I’m going to have to listen to it at least one more time, probably twice and take some notes! I think that appraisals can easily be the most maddening part of the whole “house flipping” business because when you take all of the time and effort in doing a project from start to finish, starting with finding a property that makes sense and getting it for the right price, then all of the time and work required to do the rehab work to completion, then putting it up for sale and finally locating the right buyer wiling to pay the price you’re looking to get and then its like you take all of that effort, hard work, tough decisions, time, money, etc, etc. and let it ride on the “appraisal roulette wheel” and hope and pray that it hits in the right spot! If it doesn’t, watch as you get a nice chunk of change shaved right off the top of what you thought was going to be a great payday or maybe even see the whole deal blow up right in front of you!

    I think the idea of doing your own prep for the appraisal, like having your own suggestions for comps, etc. is a great idea and is something I will be trying from now on. I think I’ve had at least some issues with every appraisal I’ve been through and sometimes I’ve had a LOT of issues with them. Now, at the same time, I’ll be the first to say that the appraiser’s job can often be tough one, too. I’m in the Milwaukee metro area, which has nearly 2 million people in the metro area. So, figuring that the appraiser can be from anywhere in the area, obviously no one is going to know EVERY single area and EVERY neighborhood inside and out and all of the little pluses and minuses that go along with any area. Some areas may be pretty much equal in value, block after block, where as in other areas, being a block or two up or down or east or west a street or two can make a BIG difference in price and desirability. Right now, I’m selling a higher-end house that we renovated that is a half block off of Lake Michigan, with views of the lake from the back of the house, which is a MAJOR plus, even being right across the same street, with no lake views is a little step down and being just a few blocks west and farther off of the lake is a BIG step down. Someone who knows that particular area well would certainly know that for sure, but I don’t know if an appraiser who lives 20 miles west, out in one of the burbs would know all of these various intricacies of that particular part of town.

    • Thanks for the feedback, Robert. I appreciate it. It’s amazing how some streets fetch higher prices than others. It is very important to know that about a market. It sounds like your current property that is closer to the lake is one of those where you’ll really need an appraiser to really understand the power of location. Definitely share whatever data you used to influence your list price. I hope all goes well.

  8. Seems to be some contradictory info about the MLS. If we say on one hand that appraisers valuations can be off, since they may not understand the market down to the neighbor, and the bank and seller have influences, since the MLS is a function of those variables it may not be any more accurate than Zillow, etc. Any time you have human interaction there is room for error no matter what the platform. MLS pictures are just that, a better source anyone can access is go into homes in the area of interest and see first-hand, fixtures and finish, etc…. Makes you wonder if these homes sq-ft is off too, more misleading variables.

    All the pictures and tours won’t make up for a trained eye that has the experience of estimating rehab materials and labor for a projected appraised value. My company as a GC does this on daily basis and we still struggle. We are looking at some software like xactimate the insurance companies we deal with use, but it is expensive. Without an understand down to the nut and bolt you have more variables on top of variables. Concessions yet another variable.

    To me no matter how you look at I or what sources of info’s used the property is in the end is only worth what someone is willing to pay for it.

    • You’re right there is room for error on any platform – whether a machine or human is involved. I agree with you too that nothing beats a trained eye. Well said. MLS data hands down beats assessment data and Zillow data though because it contains details to help interpret the market and understand the nature of the transaction. Often times Tax Records can be incorrect anyway. The market is complex and full of many layers that go into making up value. That’s why it’s important to have as much information as possible. Regarding Zillow, I have several blog posts comparing specific appraisals with “Zestimates” and all I can say is it’s “hit and miss” and I would never recommend anyone make a purchase by using Zillow alone.

  9. Well just found out my county does not make the sales price of homes public record. My approach is going to be to get into some of the homes on the market in my area of interest based on similar sq-ft, look at the finish and fixtures to develop a list price per square foot. I will make the assumption that Realtor’s have done a MLS market comps analysis to determine a sales price, and padded it up $5,000-10K. We will more than likely purchase xactimate that has a proven history of estimating materials/labor for millions of insurance companies, that we have verified to be accurate in our area to calculate ou businesses rehab and projected appraisals. Then follow through to see what they actually sold for and track them.

    Since I don’ have MLS access from there I’ll have to make more assumptions for some of the “natures of transactions” Ryan referred to, which I interpret to mean color of money that was shifted around between buyer, seller, lender, transactions, community improvements or tax valuations/appraisals, etc…….If I see a home that looks like an outlier to my base price per sq, chances are the transaction is the cause so I will disregard that home as empirical data o knock it’s value down or up.

    At end of the day the big question will be if I were to buy this house what would I be willing to pay for it.

    Not an easy task, but I am thinking as we get faster and more accurate at it we can sell the service and recoup the $1500/yr xactimate cost and our time. I think there is a market for those that do not have MLS access and a way to appraise properties without it. We’ll see. None the less, learned a lot here thanks again. Now it’s time to go put it into practice.

  10. Christopher Cole on

    This was SUCH a great a helpful podcast. Thanks for being willing to share! I especially thought the part of what an investor can give to an appraiser was valuable. Don’t call it comps, but bring “data”, including comparable houses and an itemized breakdown of how much you spent and what you fixed on the house.

  11. Julie Marquez

    Ryan, great podcast! I love these early shows where the podcast gets really specific to a topic, and this one was great. Every investor should listen to this show. Thanks for being such an outstanding appraiser and member of the real estate community!

  12. Greg Markham

    Excellent show, as always. I’m going through these podcasts sequentially and am learning tons.

    On a side note, though, if you play the last two minutes of this episode, you’ll pick up on a lot of “cross-talk” (for lack of a better word) where it sounds like the editor may have spliced two sound streams together. I don’t know if it’s worth going back this far, chronologically, but I thought I’d mention it.

  13. Josh Durham

    I’m posting this over 5 years after the show aired! But, it’s less than a year after the last comment, so I hope someone responds.

    When looking at comps, what is a good time frame to consider? Are we looking at sales within the last couple of months, or last 2 years, or what? What if there have not been a lot of sales in a particular area recently? I’m sure it totally varies on time and location, but what’s a good rule of thumb? I’m sorry if this was covered and I missed it.

    Thanks! Great show!

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