Possible to hire an appraiser prior to renovation work?

Question

Hi there, we purchased an older farmhouse we're looking to rehab and reside in.

We anticipate that renovations could be fairly costly, but are hoping they will improve the home value such that we can recover a sizable portion of the capital via a cash out refi.

Do any of you have experience hiring an appraiser prior to renovation work? We want reasonable certainty that we can indeed recover the capital outlay (and the expected amount) before going ahead with the renovation.

Thank you!

Scott K. · Answer

Awesome will DM you. The AVM or comps from an active agent would account for hypothetical improvements?

Caroline Gerardo · Answer

Just use an AVM which will give you the number within 4% of the exact, or have boots on ground active agent to provide comps. A full appraisal costs minimum $500 for SFR, AVM $2, realtor maybe free or BPO $200

DM the address if is in a state where I'm licensed I can offer a number for free.

Scott K. · Answer

I wouldn't use it for a loan. I would use it to decide whether we do the refurb work or not.

If the appraiser comes back and says we can't cash out refi for that much money we won't do the renovation.

If it turns out we can refi for a substantial amount, we'll pull the trigger on the work and then the bank will use its own appraiser.

Christian Ehlers · Answer

Caroline is correct here from my understanding you can't directly hire an appraiser for a loan, refinance, etc because they want to ensure the appraiser stays a dis-interested 3rd party.

However you could always go to an appraiser that you've built a relationship with and see if in their opinion you'll have a good chance of getting the value you need for the refinance. This will of course be an opinion but can be helpful. I've had this done before and being willing to pay them for their time or even a full appraisal will make it far more likely they take the time to help with this

Caroline Gerardo · Answer

You can't directly hire an appraisal and use it for a loan.

Jonah Hartsburg · Answer

As an agent, I haven't directly hired an appraiser, but I'm aware that it's a standard procedure in renovation loans. Typically, banks will commission an ARV appraisal to achieve the same outcome you're aiming for.Alternatively, you have the option to enlist the services of a few brokers to conduct a Broker Price Opinion. This can provide multiple perspectives at a cost that is similar to or even more affordable than a single appraisal. Just note that these opinions may not be as detailed and the brokers are likely to have less training compared to appraisers.