When to get an appraisal

11 Replies

Most wholesale deals go to all cash buyers. You might "want" an appraisal to close it, but you don't "need" one.

Thank you @chris also when I am putting the property under contract do I need a special contract or can I just use a regular residential sale and purchase contract?

@Dan Green on wholesale deals there are no appraisals or home inspections.  The property is being sold normally "As-Is" and 9 times out of 10 goes to a cash buyer. No inspections needed. That only happens when you involve bank money or hard money.

I would never get an appraisal or home inspection. Most investors are more qualified than home inspectors at determining condition. Same goes for an appraisal, never order one. A good real estate agent with access to your local MLS will be able to give you your value. It's the same info your appraiser would utilize to determine value anyways.

Originally posted by @Brian Jordan :

I would never get an appraisal or home inspection. Most investors are more qualified than home inspectors at determining condition. Same goes for an appraisal, never order one. A good real estate agent with access to your local MLS will be able to give you your value. It's the same info your appraiser would utilize to determine value anyways.

 I'd argue with you over this one.  How many times have you heard a rehabber say they were over budget and over schedule because of a surprise?  Out here in on the West Coast, most rehabbers don't even run their own crews, they hire GC's to do all the work, and if they are new or have come to trust a GC they could have problems.  Home Inspectors (a little biased here, admittedly) are better versed in Home Construction, building code, and the systems that make up a house.  I've never seen a GC or Rehabber climb into the attic, inspect the roof, or crawl through the dusty spider infested dungeon of the crawlspace.  They rarely have the tools to properly inspect problems.  With that being said, if someone is going to "go down to studs" I tell them they don't need my services, but if they are going to do cosmetic to medium sized rehab, on their retail end anything they don't find and fix is going to bite them in the butt.

On the other hand of the equation for a Wholesaler just getting started, having a Home Inspector who can give them a scope of work, and verify what the home needs is going to give them instant credibility and higher priority when trying to sell their deal to their buyers list.

Let me rephrase that, as the wholesaler of a deal, I'd never get either. It's up to the buyer/investor to get one as part of their own due diligence. That being said, after wholesaling over 300 deals, I've never had an investor get an inspection or appraisal on a deal prior to closing. However, I come from a construction background so if it's a flip and the roof isn't in great shape, I include money for a new roof in the budget. Same goes for all aspects of the remodel.

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