How to manage Appraisers

[Robert Politzer]

So far in my relatively early beginning of flipping properties, one of the most consistent irritants is with appraisers.  I believe that the problem stems mostly from having to pay them fully upfront.  It should be 50% deposit and 50% upon completion.  Would love to hear of suggestions for how to better manage that issue.

[Chris Mason]

Originally posted by @Robert Politzer:

So far in my relatively early beginning of flipping properties, one of the most consistent irritants is with appraisers.  I believe that the problem stems mostly from having to pay them fully upfront.  It should be 50% deposit and 50% upon completion.  Would love to hear of suggestions for how to better manage that issue.

Appraisers are the "independent judiciary" of the real estate world. Just like you can't pay a judge depending on the verdict, it wound't be allowed for any lender to use such an appraisal report as part of the underwriting of a residential mortgage loan. Neither the seller nor buyer have any direct say on who the appraiser is or what their compensation is (exception being rush fee / no rush fee). 

As a flipper, all you can do is make sure that whoever is hosting the appraisal (listing agent typically) is providing the appraiser with documented information that would lead the appraiser to independently conclude that the appraised value ought be at or above the contract sales price. This is an oft-overlooked part of a real estate agent's job - to borrow from the above metaphor, your lawyer is 100% allowed to present evidence to a judge and jury that would support your legal position. Making sure there no loose roosters at the property who will physically attack the appraiser is also part of the real estate agent's job...

...yeah.