All Forum Posts by: Clint Dorris

Good spot to be in.  Nice work.

Your bank appraisal and your tax appraisal should have nothing to do with each other.  As and appraiser, yes, I look at the tax value, but I don't let it influence me.  I just think it is nice to know.  Why wouldn't I look at every piece of information?

That being said, at least in my area, tax appraisals are not like what your bank does.  A tax appraisal is typically a mass appraisal.  They are trying to be fair, but they are also not usually doing market value based on recent comps or income. 

Over the last 5-8 years in my area it has been common that market values have gone down, but taxes continued to rise.  So I do see houses appraising for less than tax value all the time.  

If, I were you, I'd try to get the appraiser on the phone and talk to him.  I'd ask him if he saw potential for the property to be worth more.  Was he limited by few comps?  Is it possible another duplex sale or two in the next couple of months might could change your value?  Or, did he actually appraise it for all its potentially worth already.?

Keep in mind, he isn't supposed to talk to you without the bank's permission.  It sounds odd, but the bank is his confidential client, not you (you should be provided the appraisal, though).  However, with their permission, he/she should be able to talk to you. I'd approach the bank and the appraiser in a non-confrontational way, and try to learn all you can.  There's no telling what you could learn about the rental comps, the sales comps, and other investors the appraiser has worked with.

You could call local property management companies.  You could drive the area and look at for rent signs. Or, you could try to find out who owns that or a similar property and contact them.  

In my area they seem to operate a couple of different ways. They have online auctions, but they will also come to the courthouse. Mostly though, they have a low beginning price listed, and the reserve never gets met. The auction ends, and then it comes back up again and sometimes again at a later date. Some of them, have had an actual realtor and MLS listing before and after this online auction. I have seen a couple of properties sell through them in my area, but most of them seem not to sell at the online auction.

I still think its worth looking at.  I haven't seen any commercial stuff of theirs in my area.

I'm not sure about your area of Alabama, but in my area of Tennessee, you can also use public records. Our site is called Tennessee property data. In rural areas, many realtors are not even a member of an MLS. But, MLS has more data and interior pictures. It is good to use MLS to see what the realtors say, but it is good to use public records to to check up on the realtors.

Along the lines of what Sean said, sometimes realtors can use unrealistic comps to support the price they want.  As an appraiser, I'm actually trying to use the best comps.  But, I need a real good reason to leave a specific area for a higher priced house.  If an investor can tell me why those comps are more similar than mine, I'll use them.

Depending on how dense your area is will determine your criteria. I search for all sales in the last year that are within 200 sq feet of my house's size, and that were built within 10 years.  But, I'm in a rural area.  Some areas you will search back only 3 or 6 months, and you would also limit your search to within 1 subdivision or a 1 mile radius or 5, 10 or 20 mile radius.  

Realtor.com and Zillow.com can be good tools, but I wouldn't base a real business on them.

Its been explained to me that any loan is technically callable at any time, but they can't just do it for kicks. It also definitely seems like an ARM.

Both rates seem okay, but I've also seen better.  Granted, I do not know your area, or your situation.  

Usually, a good letter, or good wording will alleviate any Freddie/Fannie guideline rules.  I'm in a rural area, and their guidelines get broken on appraisals all the time, but the appraiser must explain what. 

I would look at how much you would owe after the 10 years, and make sure the worst case scenario is still doable.  I would also look for a different deal.  It seems like the cash flow difference is mainly due to the shorter time period, and less to do with the rate.  I like a shorter time period, but it has to fit your philosophy.

I know people who've done that here in Tennessee (although I think they had knowledge the people were living there).  If they aren't crazy, I would just knock on the door, or have your property manager knock on the door and talk to them.  I'm not sure what your plans are for the property, but they may could afford to rent from you now without you doing anything.  Or, they may leave peacefully since they know you aren't the bank.  Or, you give them cash.  Or, you evict.  

You might just call the appraiser and get his opinion. He may have only had a few comps to choose from, or he could have had numbers telling him different things, so he went with the one closest to the sales price. After all, appraiser are giving opinions of market value, and its tough to argue with what the actual market has decided, provided both buyer and seller are knowledgeable and motivated.

By the way, you may technically need to get your bank to give the appraiser permission to talk to you. As funny as it seems, they are his client, not you.

@David Cook I met your Dad a month or two ago and we had a long talk about his main business and real estate. Tell him I said hello.

Hey David.

I'm an appraiser and investor in Jackson, TN. Let me know if I can ever help you.

I'd love to know who you are working for (in private if necessary or if you can disclose).