What is Acceptable and Not Acceptable Regarding Appraisals

5 Replies

So I have a large number of appraisals for a big refinance coming up and I have to shepherd an appraiser through a bunch of rented properties. I don't know this appraiser, so I'm not sure how they normally value things. Anyways, I've had some bad experiences with appraisers. Recently I had an appraisal on an eightplex with six units leased and the appraiser compared it to two vacant buildings and one that may have been vacant but I couldn't tell. Another time, a different appraiser compared our house to a foreclosure, an estate sale and an investor flip. Another property was compared to two houses that were 500 sq. ft. smaller (ours was 1450 sq. ft.) with only a trivial adjustment and the other was a foreclosure.

It's important these appraisals come in well, but all I really need to make sure that happens is that they aren't compared to foreclosures and fixers. I think in the 7th podcast for BP, they talked to an appraiser who said that it was actually helpful for owners to bring their own comps to show to them as well as any other information. Does anyone do this? On the other hand, begging for them to bring in the price at a certain number is, of course, very dishonest and immoral. How about asking they don't use foreclosures as comps?

Where do you guys think the line is ethically and pragmatically, and how do you usually approach important appraisals.

Thank you in advance.

@Andrew Syrios ,

I don't want to advertise here but you have to read J Scott 's The Book on Flipping Houses. He has a section where he talked about how to deal with the appraiser. I recently completed my 1st flip and i have to say i would have screwed up big time if i don't read his book.

To be short you have to greet the appraiser at the property, build rapport, and provide everything that will help him to help you. My appraiser appreciated the fact that i showed up at the property and answer all of his questions and provided everything he need to make his job easier(comps, before-after pics, rehab items, etc...) 

Good luck!

Originally posted by @Huy N. :
@Andrew Syrios ,

I don't want to advertise here but you have to read J Scott 's The Book on Flipping Houses. He has a section where he talked about how to deal with the appraiser. I recently completed my 1st flip and i have to say i would have screwed up big time if i don't read his book.

To be short you have to greet the appraiser at the property, build rapport, and provide everything that will help him to help you. My appraiser appreciated the fact that i showed up at the property and answer all of his questions and provided everything he need to make his job easier(comps, before-after pics, rehab items, etc...)

Good luck!

Thanks Huy, I will definitely check that book out!

@Andrew Syrios  I've had similar bad experiences with appraisers.  But I also recently completed a refi with a credit union, and the appraiser didn't even have to go inside the properties.

Per USPAP (the rules and code of conduct for appraisers), appraisers must be able to develop a non-biased opinion of value.

However, this doesn't mean you can't provide information or have a conversation of value with the appraiser. When I appraise properties, I ask the owner everything - even what they think the value is and why, and if they have information to support it. I want as much information as possible, then analyze the information to determine if it is relevant or not. At the end of the day, I need to make sure that I arrive at an independent opinion of value.

A suggestion would be that when you talk to the appraiser, communicate that you understand they need to have an independent opinion of value, so you want to help by giving them your thoughts and info. They are free to take or leave whatever you present or say, just as long as they consider it.

If you have any more questions, feel free to reach out.

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