Real Estate Agent · Detroit · Member since 2024 · 73 posts · 24 votes
If a seller has a property that appraises for 77k and is asking for the refinance price of 60k on the listing but an inspector comes in and claims it needs 30k in repair. How can an appraiser not notice this if an inspector can come in and say the house needs 30k in repairs. Mind you the arv of the property is about 90k
Appraiser is going to look at comps and base the "As Is" value on what's sold. They are are not a contractor who will do a scope of work, they will look at what has sold nearby. I would not take what an inspector says for a rehab budget as the gospel. Get bids and negotiate if needed.
Sometimes the base value of the land is high. There are properties that would appraise HIGHER if they were torn down pre-appraisal. I’ve seen Million dollar homes purchased and bulldozed day one, IN MN. Not Hawaii, LA or NYC. These properties literally would have sold for more if the seller had torn down the property before listing it.
Most appraisers are not inspectors. They aren’t going to test any appliances, HVAC, electrical or plumbing. They measure beds/baths, square feet, construction type and age. Then compare to neighbors within a mile or two.