Investor · San Diego, CA · Member since 2017 · 23 posts · 19 votes
Good afternoon from San Diego, I am looking to BRRRR in Kansas City and am wondering what do appraisers look for when valuing a house in the midwest, specifically in Kansas City? Are things like location and walkability more important or do they emphasize square footage, bedroom and bathroom number, etc more? Thank you in advance.
It will depend slightly appraiser to appraiser, but in my experience bed/bath counts and square footage are the baseline comparisons, with small adjustments made outside of that based on finishes or any additional features (fireplace, garage, etc). Location and walkability will matter especially for anything close to downtown KC, the Plaza, or Westport areas--- as home values can change $50K-100K within a few blocks of certain areas---- though any reputable appraiser will consider the best "apples to apples" comps and weight them based on proximity to the subject property.
If you are using private money, hard money, or other investment type loans, some of those private appraisers may look at the property through a more similar lens as an investor--- and focus more on the income potential of the property.
@Erik Nordgaard the midwest is a large geographic area with many different local markets, so I would be careful generalizing the midwest. That being said, I don't think appraisal methods vary greatly around the country. They just use different comparable properties. Location is automatically accounted for by picking properties close to your subject property. That is true whether I am selling a condo in New York, an ocean property in California or a house in Kansas City.
In my experience, it has something to do with the position of the planets, whether we're closer to the winter or spring solstice, and if the date is even- or odd-numbered. I'm only kind of kidding.
@Erik Nordgaard appraisal methodologies don't really vary my market. Appraisers will take recent comps as close in proximity to the subject property as they can. They will compare sq footage, #beds/baths and amenities.