Technical Sales Leader · Cooper City, FL · Member since 2015 · 14 posts · 2 votes
Hey fellow REItors!
I'm purchasing and financing an investment property (single family home) in Florida (Polk County) and my lender shows $740 as appraisal fee. I know that for my home (primary residence) in Florida (Broward County) it was more around $500-$450 cost.
The lender explained to me that appraisals for investment properties are more expensive than primary residence for some reason, they need to be AMC certified, etc.
What is your experience with appraisal costs when financing an investment property? Is this a reasonable amount ($740)?
I'm purchasing and financing an investment property (single family home) in Florida (Polk County) and my lender shows $740 as appraisal fee. I know that for my home (primary residence) in Florida (Broward County) it was more around $500-$450 cost.
The lender explained to me that appraisals for investment properties are more expensive than primary residence for some reason, they need to be AMC certified, etc.
What is your experience with appraisal costs when financing an investment property? Is this a reasonable amount ($740)?
Thanks!
Eli
I don't know what AMC certified is but the reason my appraisal was more, but not that much more, was because they did a rental comp in the appraisal since it was investment.
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
This is news to me. SFR= comparable sales method. I am not sure how they can justify the expense BUT if you want the deal you have to play by their rules.
If rental income from the subject property is needed to qualify (eg, if your day-job income alone will not support all the rental properties you own without offsetting those expenses with rent), the appraiser needs to do rental comps and complete the Operating Income Statement. That's extra work, so the appraisers charge extra.
Hopefully a couple hundred dollars is not make-or-break on this property, or it's probably not a very good investment. :)
Note that if the lender takes a single penny of anything they are calling an appraisal fee, they will face millions of dollars in CFPB fines. Lenders are subject to search, seizure, and audit, without regulators needing to demonstrate any probable cause or obtain a warrant.
Technical Sales Leader · Cooper City, FL · Member since 2015 · 14 posts · 2 votes
9y
Thanks for all the answers!
@Daria B. and @Chris Mason - rental comps is not required as far as I know. My income is more than enough to support the loan. And it's not a deal breaker, just annoying.
@Adrian Smude - can I ask what's a reasonable price range from your experience? It's ended up being $635, not $740 as they estimated initially.
Rental Property Investor · Plant City, FL · Member since 2015 · 1k+ posts · 379 votes
9y
I believe it was $500-$600. Sounds like you are close enough. If you are happy with them I'd just go with them. But make sure they aren't Nickie and dimeing you on anything else.
I don't buy lender's explanation about property being investment property. It doesn't matter if the property is an investment property or owner occupied. Appraisal fee should be $300 - $400.
Appears to be this appraiser is charging very high. As a borrower you have a right to question it.
Technical Sales Leader · Cooper City, FL · Member since 2015 · 14 posts · 2 votes
9y
@James Syed agreed, it bugged the heck out of me, especially when I showed her another lender that has "guaranteed appraisal fee" of $495. She insisted that's the price range ($600-$700) and repeated she is not making a dime from it. I ended up paying it because the overall closing costs (origination fee, etc.) and rates are the best I found.
However, as @Adrian Smude mentioned above, I think the geographic location (State / County) matters, or have some kind of affect on appraisal price ranges.
Rental Property Investor · Plant City, FL · Member since 2015 · 1k+ posts · 379 votes
9y
I just ordered an appraisal in Polk County for a SFR and it's $440. This is to remove PMI. If it was owner occupied the cost was $310. They do have FL broken up into two sections which Polk is in the lower $$ :) The higher priced Zone counties are: Brevard, Calhoun, Charlotte, Citrus, De Soto, Dixie, Flagler, Franklin, Gadsden, Gilchrist, Glades, Gulf, Hamilton, Hardee, Highlands, Holmes, Indian River, Jackson, Jefferson, Lafayette, Leon, Liberty, Madison, Manatee, Monroe, Okeechobee, Putnam, Sarasota, St. Lucie, Sumter, Suwannee, Taylor, Wakulla, Washington. Those counties are $100 more
Follow up question: do you self-manage your properties, and if not, can you recommend a high quality property management company in the area (Orlando - Tampa area)?
Investor · Tampa, FL · Member since 2016 · 334 posts · 215 votes
9y
One of several reasons for the 2008 crash was that people were getting their own appraisers to vet the property they wanted to purchase. How anyone thought that wasn't a conflict of interest is beyond me but here we are and we all now have to pay the penalty of lenders having the control when it comes to appraiser selection.
It sucks. But you're better off focusing on make a dollar mode instead of save a dime mode when it comes to appraisals. I recently went through this myself (I was charge $675) If it's over $700 (which yours is) I'd still bring it up with your lender and see if they can lower it or comp you on something else. If they don't budge it's not worth the fight for the few hundred bucks.
Technical Sales Leader · Cooper City, FL · Member since 2015 · 14 posts · 2 votes
9y
Thanks @Eric Delcol, I agree that it sucks. I ended up paying $635 for the appraisal, the $740 was only an estimate. Still, if there are appraisers that can do the same work for half (as mentioned above) - why do I need to pay a premium?!
I also agree on the make dollar mode vs. save a dime mode, but regardless of the absolute amount, I hate paying beyond reasonable for a service I know can be done for much less.