Controlling Your Appraisals

81 Replies

Vikram and others brought up an interesting topic in another thread, and because it was buried pretty deep in there, I wanted to break it out into a new thread. The discussion was about how you go about getting your rehabbed properties to appraise once you get them under .

Obviously, you'd like your property's value to stand on its own without any help from you, but in this market, anything extra you can do to ensure your property hits its target appraisal price is important.

I'm going to present some of my ideas (they've worked for me and others I know) and then open up this thread to others who have had success in getting their properties to appraise in this market...which can often be very difficult...

I've found that by:

- Providing Information
- Building Rapport
- Building Trust

You can go a long way towards getting appraisers to err on the side of trying to help your appraisals come in at your target price.

From a Providing Information standpoint, remember that appraisers have a tough job these days. They need to make a lot of people (on different sides of the table) happy. Helping them do their job effectively and efficiently will make their lives easier (especially when the underwriter comes back and asks for more details to substantiate the number), and in return, make your life easier. And given new HVCC rules, you may be more familiar with comps in a given area then they are, so you may actually have better comps than the appraiser!

From a Building Rapport standpoint, if someone knows you and likes you, they are going to want to help you. Ask the appraiser about his family, ask about his business, ask
him questions that allow him to feel like you appreciate his "help", and (if it's true) insinuate that you may want to use his services in the future. We don't like to let our friends down, so the goal is to get the appraiser to feel as if you're a friend in the short time you're together

From a Building Trust standpoint, many appraisers (and others) are leery of rehabbers these days because a few of them give the rest of us a bad name (shoddy work, lie
about repairs, etc). Oftentimes, when appraisers walk into a rehabbed property, they assume that the value is LOWER than an equivalent house that isn't being flipped. By proving to the appraiser that you're in the group of rehabbers who take pride in their work and do things the right way, you'll get the him to appreciate your work and efforts and to trust that your house is probably MORE valuable than an equivalent house that isn't being flipped.

With that background, here are my concrete suggestions on how to work with appraisers:

1. Always ensure that you know when the appraiser is coming to your property. We make sure that our properties are on an agent lockbox and are alarmed. We then tell the lender/broker that the appraiser needs to call us to get access to the property. Nine out of 10 times we'll get a call the day before the appraisal, but occasionally the appraiser will call while standing outside the house when he sees the "Alarm" sign on the door; when that happens, we tell him how to disable the alarm, but now that we know he's at the property, we can rush right over or send our project manager over to meet him.

2. Always make sure you are present when the appraiser is doing his walk-through. This is your opportunity to build rapport, provide information about what work you did, brag about the fact that you pulled all required permits and only used licensed contractors, and to generally take credit for the great rehab your team has done.

3. At the end of the walk-through, you have an opportunity to provide information to the appraiser that he can take back to the office and review. This is the information that will help him do his appraisal and help him justify the number he comes up with in case anyone asks. Here are the things I provide (nicely organized in a folder):

- Renovation Overview (see example attachment to this post)

- Rehab Cost Breakdown (see example attachment to this post)

- Before/After Pictures (see example attachment to this post)

- Comps (I print out comps from the MLS that support my sale price and add them to the folder)

Of course, while most appraisers are happy to have you around during the inspection and happy to take the information you have, don't just assume this. I will always ask upfront, "Do you mind if I stick around during your walk-through" and then before I hand them the folder, I will always say, "I certainly don't want to do your job for you, but I have some documents here that will give you more information about the rehab I did, the money I spent, and some of the comps I know about in the neighborhood...would you like them?"

I've never had an appraiser who seemed bothered by the fact that stuck around during the walk-through (most of them are talkers and like the company) and never had an appraiser who didn't want my extra information (again, most of them were very appreciative of anything I had).

So, what are some of your tricks for working with appraisers and appraisals?

For some reason, I could only attach two docs to my original post, so here's the third (Renovation Pictures)...

Jason,

Even though that new Beta feature for attaching documents has some limitations to 2 docs, you can use the URL tags to create a hyperlink to the storage location of those docs ...

BTW - thanks for the insight on some of the "inner workings" of your operation.

We do pretty much the same thing. That's not a coincidence because we just copied you!

We remove the Supra box before the appraiser comes and inform him that he has to let us know when he is coming. My agent is there to meet him and so far it has worked 100%. (I have reason to believe that percentage is about to go down - will know in a day or two on a house that has no real comps.)

Though everything mentioned sounded great, non of it matters. When its time for your home to get an appraisal all the appraiser needs is the list of repairs done to the home along with how much it cost you to make them.

What I do before I buy a home that will need an appraisal I call my local appraiser and have them do a pre appraisal which gives me the current value of the home. I know right then and there if its a good deal. Then when the home is appraised for real you can be confident. My appraiser and I have been doing business together for years and he will be the first to tell me if the numbers will work or not. He will not stretch values bc I talk to him about his family or we play golf or whatever.

Curt, you could not be more wrong.

Appraisals are all over the place for the same home from different appraisers. I know because I have one of my appraisers do appraisals on some of my high value homes in order to sell the house at a "discount." And a week later, the buyer's appraiser does his thing and the two numbers have no relationship with each other. It is not uncommon to see a 15% to 20% difference in appraised values between different appraisers.

Good post Jason and good ideas. Just to add a tad, I like to meet the appraisers before I need them. While I realize most of the BPers are not in the same boat, but I went to thier office (an informal appointment the first time) and offered lunch. Building rapport was the first order of business. I would also hire them to do something, sometimes an appraisal, sometimes just a letter of opinion and paying them a feew bucks to provide some commercial comps was pretty cheap. This provided time to "work with them" and I think it helped alot. Make friends, it doesn't hurt.

Then on to what Jason had to say.

To those I didn't know, which was not often, I would remain very reserved, as Jason says, but being careful not to appear as though I was attempting to "influence" any outcome, that can be very touchy now. I know a couple that if you even sound like you're wanting to contribute to thier little domain, they will cut the deal for spite! You can't always get what you want or who you want....but if you are in a smaller town like me, you can get to know all of them in your area.

This thread should be a sticky. It provides a solution to one of the critical hurdles that all sellers face. I wish I had known this stuff on my first four properties.

Originally posted by Curt Davis:
Though everything mentioned sounded great, non of it matters. When its time for your home to get an appraisal all the appraiser needs is the list of repairs done to the home along with how much it cost you to make them.

Hey Curt -

As Vikram pointed out above, there is a lot of room for personal bias and opinion when it comes to doing an appraisal. In other words, if an appraiser is hell-bent on ensuring that your property doesn't appraise, he could likely do so in a supportable way. Likewise, if an appraiser is hell-bent on getting your property to appraise, he could probably do that as well in a supportable way. (of course, some properties are clearly above or below the line, but many are in a gray area)

If that weren't the case, you wouldn't expect different appraisers to come up with radically different values for the same home (they often do) and, in fact, you wouldn't even need appraisers as you would just be able to automate the process (you can't).

So, given that an appraiser's personal opinion and bias will play into the equation, it makes sense that if you can bias the appraiser IN FAVOR OF a higher number, you should certainly try to do so.

For example, if an appraiser has two equally valid comps that are $5K apart, why wouldn't you want to do whatever you could to encourage him to select the higher one.

Like Vikram, I only have empirical data, but here's my experience -- for the first 5 properties I rehabbed, I never met the appraisers and appraisals were hit or miss. For my last 15 or so properties, I've met the appraisers all but one time, and my appraisals came back at the target price or above all but one time. Guess which one came back low... :)

So, perhaps it's just coincidence, but my small sample size -- and common sense -- tells me that if you put the appraiser in a situation where he WANTS your property to appraise, it will...


What I do before I buy a home that will need an appraisal I call my local appraiser and have them do a pre appraisal which gives me the current value of the home. I know right then and there if its a good deal.

What if it takes 6 months to get the house rehabbed and under contract? At that point, the comps you pulled before you purchased have expired, and the new comps may or may not support the previous value you determined.

Then when the home is appraised for real you can be confident. My appraiser and I have been doing business together for years and he will be the first to tell me if the numbers will work or not. He will not stretch values bc I talk to him about his family or we play golf or whatever.

Updated over 9 years ago

Note that the very last paragraph of this post was from Curt, not me...poor editing on my part...sorry!

This is a great post and something I meant to do a while ago, you beat me to it. I disagree with Curt's statement as well. Appraisals are "opinions" of value, it is not a precise science and as such, being the humans they are, appraisers vary in opinions. It is a wise investor to "assist" (I like this word better than "control" the appraiser with real and supporting comps, real data on repairs made, etc. This business is almost entirely about relationships and forming a qucik one with an appraiser will only help, not hinder your success.

Jason/Vikram - I too have the very same history and as such, offers more evidence to support our theory that "assisting" appraisers is beneficial to getting an appraisal meeting our purchase price by our end buyers. It is that simple.

As an Appraiser, I wanted to clear up some misconceptions which are being propagated. This may make my (and other Appraisers) jobs simpler. This may also make your life easier. Consider this post a public service.

Each Appraiser provides a similar service, but the manner in which they provide that service may vary. My comments are related to how I run my appraisal business. Many Appraisers I know operate their business in a similar manner.

This post applies to responsible, competent, qualified Appraisers. There are scam artists and incompetent people everywhere. I'm not addressing these.

1. An Appraiser's Client is typically a Lender. An Appraiser's responsibilities are to the Client. If the Seller would like a valuation service performed, then an Appraiser would be happy to comply with the Seller's request for an agreed upon fee.

2. The Appraisal is the Client's, not the Seller's.

3. The Seller does not "Control the Appraisal". See item 1 above.

4. Providing information on the Subject property is always a good idea. This information must be provided upfront at the beginning of the assignment when the Appraiser begins his research and first contacts you. The Appraiser should always request this type of info from the property contact. Unfortunately, when you wait til after the Appraiser has performed his research to disclose this information, then the Appraiser may have to redo the research. For example, if the Subject property's GLA is much larger/smaller then the documented sources (i.e. tax records, MLS, etc), then the Appraiser's Comp research will have to be redone because the Comp selection was based on an inaccurate description of the Subject property. These type of issues should be disclosed when the Appraiser first makes contact.

5. The Appraiser reports and analyzes the neighborhood market data. The Appraiser does not create the market data. The market data is what it is, either good or bad based on your view.

6. Providing hand picked Comp Candidates to an Appraiser is an indication that the neighborhood Comps will not support the Seller's desired value, the Seller knows this and is trying to influence the Appraiser. If the neighborhood Comps support the Seller's desired value, then the Appraiser's research will disclose this.

6a. There are exceptions to providing Comp Candidates. An example is when the Subject property is a special or unique property such as rural property and there are no similar Comps nearby. Providing Comp Candidates in a typical subdivision neighborhood is of no help.

7. The last thing the Appraiser wants the Property Contact / Seller to do is start a personal conversation with him. The Appraiser is trying to perform a job and has a schedule. The Appraiser doesn't have the time or interest in discussing his family or other personal issues with you. If you have business related items, then the Appraiser may be interested in them.

8. The Client identifies how the Appraiser obtains access to the Subject property. If there is a phone number, then the Appraiser calls and make arrangements for the inspection. The Appraiser tries to complete the inspection as quickly as possible. The best way to prepare for this is to install a combo lock box on the property and provide the Appraiser the code when he calls.

9. Being present during the Appraiser's inspection is a bad idea unless there are specific issues which require you to be there. Most of the time you are in the way and increase the inspection time.

10. If you have information for the Appraiser, it MUST be submitted as soon as the Appraiser contacts you. The Appraiser must consider this before the Appraiser begins his research.

11. Don't rely on a BPO. BPO's are performed by people with little or no valuation training.

12. The following "tricks for working with appraisers and appraisals" are what you should be doing:
- Prepare for the Appraisal. Prepare any info you want to send the Appraiser and install a combo lock box on the property.
- Be prepared when the Appraiser 1st contacts you. Disclose any issues (good or bad) with the house and submit any info you have to the Appraiser immediately so they may review it upfront.
- Be responsive. When the Appraiser contacts you, return the call quickly and provide access to the property. Make sure you provide the correct phone number rather than the assistant to the assistant to the assistant who then needs to locate the person with the property access.
- Install a combo lock box on the property BEFORE the Appraiser calls. You can then provide the combination to the Appraiser. This allows the Appraiser to perform the inspection as quickly as possible and avoid delays while working around your schedule.
- Do your own neighborhood market research. There should not be any surprises in an Appraisal. If you have to use Comps from different neighborhoods to obtain your desired value, don't be surprised if the Appraiser uses the similar recent sales and active listings on the Subject's street and obtains a lower valuation.

I highly advise you pursue the professional, competent approach rather than the "suck up" approach when working with Appraisers. You'll receive much more respect in return.

As described earlier, the Appraiser reports and analyzes the market data. The Appraiser does not create the market data. It is what it is.

regards.

Real Estate -

I had written a long response to your post, but I'll just leave it at this...

The core advantage of the tactics I suggest -- and the reason I suggest every investor follow it -- is:

A good appraiser who dislikes my approach (like you, for example) will never skew an appraisal downwards for that reason; but plenty of appraisers may be influenced positively by my approach. So, for a seller who takes my suggestions, there is absolutely no downside, but plenty of upside.

That said, why would any serious investor not take this approach?

Originally posted by Real Estate:
As described earlier, the Appraiser reports and analyzes the market data. The Appraiser does not create the market data. It is what it is.

I think herein lies the error in your thinking and, perhaps, on the part of many of your well-intentioned colleagues. The interpretation of data is actually partly a science and partly an art. You need to know what to ignore, what to give more weightage to, and what is missing from the data.

Different appraisers reach quite different results after evaluating the same data. Therefore, it is critical that we educate the appraiser on our property and the comps (why one comp was low, etc.) so that they have as much information as possible when they perform the appraisal. The goal is neither to mislead an appraiser nor to suck up to him, but to educate him on the little details that make your property worth what you think it is.

I must also point out that it is a bad idea to put a combo box on the house and not be present when the appraiser shows up. You need to be there with your appraisal packet, share the information with the appraiser and then let him get on with his job. If done professionally and with respect, this will get you better results than what was suggested in the appraiser's post.

I worked for an appraiser many years ago now. I recall having asked my boss to do an appraisal of a home that I was trying to refi. He had one of the appraisers do the appraisal and it came back much under the value that it should have been.

I asked the owner to review it because a number of the comps were definitely outside of the area and the adjustments didn't make sense. When my boss reviewed it he adjusted the appraisal considerably. He used a couple of different comps that were closer to the subject and his adjustments were more inline with what would be expected.

I remember having several talks with him and one of the things he mentioned as well was that it quite common for appraisers to have differences in opinion on value. He was an instructor as well.

Originally posted by Vikram C.:
If done professionally and with respect, this will get you better results than what was suggested in the appraiser's post.

Agreed. Just a small set of empirical data, but in the past two years, I've had over 50 appraisals performed on my properties. Of those, only 4 have come in below the contract price -- 1 was corrected when the appraiser realized that he didn't know what the actually contract price was, and the other 3 still came in higher than what I had expected (i.e., I knew they wouldn't fully appraise).

At this point, I'm starting to see the same appraisers on multiple properties, and all of them seem happy to be working with me again, presumably because they know I'll give them as much information as possible to make their job easier, I'll be accessible and responsive to their questions and hopefully also because they consider me to be a nice guy.

And as for the #7 reason in "Real Estate's" post above, this is completely off the mark in my experience. In my experience, appraisers these days very much like to engage in personal conversation. Few of them have packed schedules anymore (which tends to be a very common topic of conversation), and most of them are happy to spend as much time chatting as they do working.

I'm not one for small talk, so if an appraiser didn't want to chat with me, there would be very little chatting; in general though, this isn't the case.

Few quick comments:

- The Appraiser's responsibility is to his Client. The Appraiser is not responsible for "making a lot of people happy". If the Appraiser's analysis and valuation are supported by the market data, then any unhappy people should review their own market analysis.

- "So, for a seller who takes my suggestions, there is absolutely no downside, but plenty of upside.". Incorrect. As we all know, time is money. If the Property Contact is unresponsive and wastes time, then the Appraiser may justify a fee increase. You're also wasting your time performing tasks which are unneeded and unwanted, such as attending the inspection and preparing an appraisal packet to be delivered at the appraisal inspection.

- Any info to be provided to the Appraiser MUST be provided when the Appraiser first makes contact. The Appraiser needs to consider this information before beginning the research. If you withhold significant info from the Appraiser which will impact the Appraisal, then the Appraiser is justified in asking for a fee increase to redo the research.

- PROVIDING AN APPRAISAL PACKET TO THE APPRAISER AT AN INSPECTION IS TOO LATE ! ! ! See items above.

- The recommended property access method is a combo lock box for which you can provide the access code when the Appraiser first contacts you.

If you want to assist an Appraiser, then you might consider what an actual Appraiser requests rather than what you think they want.

Originally posted by Real Estate:

- The Appraiser's responsibility is to his Client. The Appraiser is not responsible for "making a lot of people happy". If the Appraiser's analysis and valuation are supported by the market data, then any unhappy people should review their own market analysis.

Appraisers are human, not machines. They have wants and desires, and presumably among those wants and desires is: not crushing the dreams of home buyers, getting additional business from lenders and sellers, doing the right thing in the face of ridiculous government regulation, etc.

Perhaps you are able to complete your job with zero emotion (unlikely, even though you may think you do), but most of the rest of the world can't, even if they might want to.

As a smart investor and business-person, I take advantage of this when possible. That's MY job.


- "So, for a seller who takes my suggestions, there is absolutely no downside, but plenty of upside.". Incorrect. As we all know, time is money. If the Property Contact is unresponsive and wastes time, then the Appraiser may justify a fee increase.

If the property contact is unresponsive, then he's not following my suggestions. Being responsive and building rapport are tremendously important. Sounds like we agree on this.


You're also wasting your time performing tasks which are unneeded and unwanted, such as attending the inspection and preparing an appraisal packet to be delivered at the appraisal inspection.

Again, in my sample of 50+ appraisals, I've never once had an appraiser turn my packet down (though I make sure to say that I understand if he doesn't want it or need it), and about 75% of the time, the response I get is, "These days, the FHA underwriters want us to get all this rehab information...thanks for saving me the time."

In fact, in EVERY appraisal that I've seen after-the-fact, a copy of my "Renovation Details" and "Renovation Cost Breakdown" documents have been attached to the back. So, clearly the appraisers find these documents valuable enough to include in the appraisal.


- Any info to be provided to the Appraiser MUST be provided when the Appraiser first makes contact. The Appraiser needs to consider this information before beginning the research. If you withhold significant info from the Appraiser which will impact the Appraisal, then the Appraiser is justified in asking for a fee increase to redo the research.

If you mean first contact as in during the initial phone call, then you are incorrect that he MUST get it at that time. Again, I know of at least 50 situations where the appraiser didn't get this information until I met him at the house, and in not a single one of those did the appraiser tell me it was too late.

Evidence doesn't support your statement.


- PROVIDING AN APPRAISAL PACKET TO THE APPRAISER AT AN INSPECTION IS TOO LATE ! ! ! See items above.

Again, evidence doesn't support your claim.

And typing in all caps doesn't make your argument any more convincing.


- The recommended property access method is a combo lock box for which you can provide the access code when the Appraiser first contacts you.

Yes, if my job were to do exactly what you wanted me to do, then I agree that this is recommended. But, I want something different than what you want, and because I'm in control of access to my property, I'll do what I want, regardless of what you might recommend.


If you want to assist an Appraiser, then you might consider what an actual Appraiser requests rather than what you think they want.

My ultimate goal is not to "assist the appraiser." If it were, the title of this thread would be "How to Assist Your Appraiser."

My ultimate goal is to have my appraisals come in at or above the contract price I have on my property. I have been VERY successful at doing that (as have others I've spoken with), and I attribute this to doing the things I mention above.

Mr. Real Estate, you are absolutely, without any doubt whatsoever, correct in your opinion and I know where you are coming from. That is your opinion and it's obviously the way you have run your appraisal company...and for years, I can tell, even though you didn't fill out your profile.

I'd like to see you fill out your profile so that other reading this thread, not necessarily for those commenting in this thread, but for the public to get a better picture of what you are saying and where you are coming from.

BP is a social networking site, while it does contain some very good discussions and has some very good information, especially mine (lol), it is not the University of Real Estate where experience and knowledge is the basis for any qualification. The popularity of many respondents on BP are more of a qualifying measure than any professional designation or degree of real experience.

We have some sharp people here, some with just a couple years of experience in real estate, but they are a formally educated crew that can really be full of themselves and speak with the same authority as if they had been in the industry for 40 years. So, much has to be taken with a pound (not a grain) of salt so to speak.

Now, as for me, I can be very arogant as well, but I have very good reason to be! (LOL)

You, Mr. Real Estate, have no obligation whatsoever to provide any evidence to support your opinion. Not only is it an impracticle request, it is obsurd for your opinion to be challanged at all by those here, since all you are stating is your opinion AS AN APPRAISER.

It's your opinion and IMO, the reader should take into consideration your professional background and expertise. That's why it's a good thing to fill out your profile accurately.

I know exactly what you are saying and agree, except for the lock box, since many "investors" don't use them.

Jason has obviously spent alot of time in his analysis and post. It has some good information, but IMO, he is also assuming that others will have similar social skills as his in dealing with a group of real estate professionals that can be the most opinionated bunch in the industry. I know because I have done hundreds of appraisals as a fee appraiser prior to going into lending. More over, I have reviewed THOUSANDS for compliance!
Residential and commercial. If you can't have an opinion, you certainly can not do an appraisal.

I too have cautioned investors about attempting to "control an appraisal". No investor is going to control anything, but they might make a positive impression.

That's why many of Jason's suggestions might be better served as I pointed out above, off the clock and in a social setting first. Not at the door with an appraiser you don't know, even if they are polite.

Also, what this bunch may not understand is that many times you pull your comps before going to the subject property. Especially for an appraiser who has had jobs in the area before and has an idea of the neighborhood, before ever having to go there! The walk through is not the first awakening, it's a confirmation of expectations and for final adjustments, such as the degree of work performed and quality of workmenship and materials. So, if you get info at the door, it can be too late and a point of aggrevation. It's better to find out who got the assignment and go from there.

I doubt anyone else in this thread has ever signed off on an appraisal as the appraiser or the review appraiser. So this is all really obsurd to argue over your opinion Mr. Real Estate.

So, Mr. Real Estate, I realize you probably viewed the thread and joined to make your point. That's great and I hope you stick around as you would certainly be an asset to BP, IMO.

Good luck to you sir!

I think the issue really is one of perspective. Jason and I are investors who do a large number of flips and it is our job to maximize the value of our investments. That means we need the appraisal to come at contract price and not below it, which gives the buyer an opportunity to renogotiate the sale price to our detriment.

Appraisers, on the other hand, would ideally like to be left alone and have nobody question their appraisals.

This thread, and this entire site, is meant to help investors, not appraisers, and therefore expresses what is be best for investors. Appraisers (and the resident "bureaucrat" on BP) are welcome to have a different opinion.

Bill,

I have loads of respect for you. Your posts are very helpful and I read almost everything you wrote when I first joined.

I think you may be off base on this one. I would think that the personal experience of several very successful investors would be worth quite a bit to the reader.

I agree that Real Estate has every right to express his opinion, and his opinion may be that these packets are unhelpful, and a waste of time. But my experience is the same as JScott, Vikram, and Will B in that appraisers very much seem to appreciate the effort put forth. Most of the appraisers I've met with have had no problem with small talk. I'm also with J in that I hate small talk, so the one appraiser that was not interested in talking to me was left alone to do his work. I had no problem with that appraisal either.

A few of the appraisers with whom I've met have requested the very documentation I am providing, and they have always requested it be provided at the appraisal, not the first time I speak with them.

I do agree with Real Estate though, that if you plan to follow the advice of J Scott's original post, you MUST arrange your schedule around the appraiser. It will do you no good (quite the opposite I'm sure) to be unresponsive, or difficult to meet with.

V, I have many more deals killed than you have due to low appraisals, you'll need another twenty years to catch up. There is absolutely a motive here and as well intentioned as it is, it is also getting misguided. Investors don't control an appraisal, in fact attempting to do so is illegal (that's from the bureaucratic side of me that can save many newbies tail end if they only heard from the likes of some on the internet).

It's more prudent listening to what an appraiser has to say about what they would like to see or not see than 20 investors with opinions gained over a sample size of 50 deals, even 250 deals.
Not to discount Jasons work, but there are limitations.

Take into consideration both sides, again. not all investors have the advanced social skills that may be required to favorably impress an appraiser, but it is clearly assumed that any newbie should follow the advice of those who have never been there or done that......

Give me a break! Really, and BTW, the assumption concerning the use of data is not totally correct. Everything is not at the whim of the appraiser. But it is clearly beyond the scope of this site. There are rules and there are also exceptions. And every appraisal is reviewed and if an appraiser fails to follow the rules and good judgment, they can get slapped so hard they can lose their license! So, most of you really know very little beyond the front door so to speak, yet you insist on getting outside your area of investing......just saying, investors need to stay on their side of the fence until they know what they can do with a particular appraiser...that's all I'm saying.

Age and wisdom are two separate things. There are many old people who are not very successful, and many of them have a high regard for themselves because they think their age makes them more experienced / wise. That is why it is harder to convince an old person to change his ways than a younger person, regardless of how much he needs the convincing.

With respect to appraisals, anybody who thinks that data is data and there's not much one can do with it knows neither appraisals not statistics. It is fairly common for appraisals of the same property to come in at very different numbers from different appraisers.

In any event, I do not wish to engage in an endless debate with people who have more time on their hands than I. Readers are free to decide which way they wish to do things based on the different opinions on this thread and the quality of the source.

Originally posted by Financexaminer:

I doubt anyone else in this thread has ever signed off on an appraisal as the appraiser or the review appraiser. So this is all really obsurd to argue over your opinion Mr. Real Estate.

How about if we leave it at this:

For those of you whose goal is to preserve the integrity of the appraisal process, do what Bill and Real Estate suggest.

For those of you whose goal is to get your appraisals to come in higher, follow my advice in the original post above.

I'm late to the party, but I'd like to chime in here.

My approach sort of splits the difference between J. Scott and what Financeautomaton (Just breaking your nuts a bit there) suggest...

I also come at this from a slightly different perspective, having done BPOs for awhile back when the money for BPOs was still good. It's not appraisal experience, but the process of doing a good BPO is a lot like doing an appraisal.

Anyway, to get back on point - I don't like to meet the appraiser in person. I know when I did interior BPOs it made me very uncomfortable when someone was following me around, trying to talk the subject up. I also know that most people in this business are either very talky or very shy... and that an appraisal needs to be data-driven.
Either way, I never have felt like an appraiser needed to be chit-chatted with while I pointed out how tremendously awesome my trim carpenter is. "Check out the way he coped that joint. That's worth at LEAST another 5 grand!"

What I do, however, do is this -

Prior to the appraisal even being ordered, I put a CBS code on the supra box and keep it a closely-guarded secret. Not even the buyer agent is going to weasel it out of me. I also put out a contractor box and change the code every time I give it out. I ALSO tell the lender directly that the appraiser must call me for access... in other words, until he talks to me, Jesus himself ain't getting entrance unless he brought along a master key.

When I talk to the appraiser, I ask him some very carefully-worded, very on-point questions -
"How are we looking for comps?" (The answer varies, but most of the time they haven't even started on data-discovery)
"Have you been given the contract price?" (the answer is always "no")
"I have information regarding the renovation and some possible comps. Would you like me to send it to you?" (The answer is ALWAYS yes. Half the time the appraiser thanks me for getting half his work done for him)

And then it's very mundane - I get his e-mail address, the best phone number to call if I need to get in touch with him, and then... ONLY THEN... does he get the CBS/Lockbox code.

My data package is a lot shorter than J Scott's. I give the highlights of the rehab (Rewired, replumbed, new HVAC, etc.) and a short summary of the major expenses involved. I don't get nearly as detailed as J does.

I do, however, state that receipts and a ledger are available if the appraiser would like to see them to verify numbers.
(Side note... I once had an appraiser call me and say, "You didn't REALLLY spend that much, right? This house wasn't in that bad of shape. You're just puffing."... I very quickly, without hesitation, told him that YES I DAMN WELL DID and that I was ready to show him receipts. He then laughed and I asked if he was just trying to see if I'd blink... he said, "Yeah, I was. You'll get your value"
Appraisers can be real jackasses.)

I also provide a copy of the certificate of occupancy and a short-form BPO showing up to 5-7 sale comps and 3-4 active listings.

I also take the time to pull permit records on the sale comps... in lower-end markets, most of them have no permit record and I can therefore make the argument that they have not been rewired, replumbed, or even had a new HVAC installed (Government evidence to that point being missing. If they had that stuff, they'd have had permits... right? right? wink wink nudge nudge)

While I haven't had an appraiser directly confirm if the permit/no permit thing influences them, I will say that since I started using that tactic I haven't missed an appraisal yet and I've had to spend a lot less time haggling with the appraiser.

Maybe our appraiser friend here can lend some insight on that issue?

The times when I have had an appraisal come in low (It happens), I've had good success pushing back on it and having the appraiser redo his comps. Typically the lender is on my side in the matter, so that helps.

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