Question: Is there a need for investors or realtors to have a "price opinion" or "market value assessment" done by a person based on appraisal methods at a discounted rate? Not a formal appraisal, but an identical process and result without the cost.
Background: So, my wife is at least a semester or two of college away from completing the requirements for her appraisal license. She is doing appraisals under two diff trainers, but not enough to support an income. She has five years of experience working for an appraiser that embellished the requirements of attaining her license for herself, I think, sadly, just to keep her there. She's familiar with appraisals for hard money loans and doing ARV based appraisals. This would be in the Houston area, and obviously with a disclaimer.
@Nicholas Reece What would be the benefit of this over a CMA, which investors can get for free? I can't imagine that too many investors would trust their investment decisions to some third party's price opinion.
My understanding is that a CMA would come from a real estate agent, right? What if that investor isn't using a real estate agent? Or, what if the real estate agent overprices a home and the appraisal comes back much lower? This could be a way to minimize the "what if" scenarios by having a more solid number. Something I think all investors might find as a more comfortable position. Also, an agent friend of mine said that sometimes he encounters properties that are more complicated and more difficult to ascertain the market value. He said he would be willing to pay for such an analysis in these instances. I'm just wondering what the implications of such a service could be across the board. Tell me what you think?
Also, from what I've read. Isn't this similar to a "desktop appraisal?" What does that constitute?
First time responding with a tag. Thanks for the questions.
CMA are preferred because its free and easily accessible.
If you were leveraging your investment, the bank would require you to get an appraisal anyways so it doesn't make sense to pay for it twice.
Although, it can benefit a cash buyer to determine ARV of a rehab property.
Right now, I'm in a situation and I'm wondering if an appraisal is better than CMA.
I consider myself at least as competent as the above average agent when it comes to valuations. A CMA is generally an automated system which generates a range of values, based on selected comp.s. Adjustments "can" be made by the agent, but mostly it's just generated by the automated program, with little consideration for subdivision boundaries, age, wood frame vs CBS, upgrades/renovations, lake front vs busy road frontage, leaky roofs, etc. Basically subject to GIGO. I prefer to do my valuations on a spreadsheet, making all the adjustments above. I'm about to list a property for a client in the $700k range, and while I consider myself competent, I'll spring for a full appraisal performed by an FHA certified appraiser who does appraisals for my preferred lender. CMA's are quick and easy, but can easily be off by 15-20%.
@Nicholas Reece If your area has a lot of out of town investors then something like this might be helpful to them along with your local knowledge of neighborhoods and developments going up in the area, etc. Being an out of town investor myself I would pay to get a third person's opinion on values of properties I'm interested in to help me decide by someone who is not making a profit from me buying.
Obviously this wouldn't be for everyone, as it would be a service for people that might not be as confident in their own valuation skills. As close as possible to what the actual appraisal value would be, but at a fraction of the price.
Thanks for the posts!
Most appraisers would kill me for saying this, but here goes.
If she's looking to grow her business, particularly with investors, I suggest she become a sounding board for investors. I'm not talking about doing appraisals or CMAs. I'm talking about getting to know these people, they can call her, and she can pull comps and give them her opinion for no charge (not an official appraisal).
It seems that many investors look down on appraisers, but like investors, some appraisers deserve their rep and some don't. I can't figure out why an investor wouldn't want someone they can call for a second opinion. I look at houses and comps all day, every day.
Now, I know you are looking for immediate money, but for long term business this could really help. All investors in my area know they can call me when they have a question. I had 2 guys last years buy a package of houses, and they requested to use me. I got 10 appraisals in one week because of this. Despite what many say, banks working with investors can sometimes send an appraisal to the appraiser they want.
Also, this could help you on investing deals in the future. It is really a win-win-win. Plus, if she could feel out some paperwork based on these conversations, she might could find a way to get experience hours for it.
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