All Forum Posts by: Jason Finley

You should also check with the local zoning authority (if the property is zoned) about the setback requirements. If the property is destroyed for any reason, they likely will not let you re-build in the same place, which could affect the size of what can be re-built. As Jessee stated, you should make it a bargaining point to get a better price because if you try to sell it later on, your purchaser will likely do the same to you.

I've used David Carlysle, with Criterium Carlysle Engineers (205-744-5004), and highly recommend him. He is the only inspector I have experience with, but I have been told by several individuals in different real estate fields that he is "the best."

Thanks @Joel Owens . The buy and hold commercial properties are my long-term goal, but as you said, there are a lot of barriers to entry (cash currently being my largest one). The SFRs are just a starting point that will hopefully fund my future deals while I learn the ropes. Commercial real estate is where I have all my appraisal experience, and is ultimately where I'm most comfortable. I enjoy my current profession, so passive income is ideal for me. That being said, any additional income is ideal for me, and any knowledge I gain from "non-ideal" projects will be good for me too.

@Dennis Tierney uneducated buyers or buyers with unrealistic expectations are definitely an obstacle, especially if they have a report to back-up their expectations. IMO a ~10% difference isn't terrible, although it isn't great (although it's astronomical when it's your extra $200-$300k), but who's to say that another investor wouldn't pay that?

Putting a single number on a property is a little flawed in itself when you factor in flexible/stubborn sellers, adequate/inadequate marketing, etc. but a single number is required by most lenders. In most cases, a range of values is more appropriate because there are a lot of variables that affect one buyer more or less than another.

I doubt your appraiser put a number on that property that he believed was wrong, although appraisers can often be too optimistic, and I doubt he enjoyed realizing that his previous appraisal was higher than what was offered after 12 months.

You definitely seem knowledgeable in your field, so you know as much as anyone that things are only "worth" what someone is willing to pay, and no appraisal, BPO, or other piece of paper can change that. We definitley don't determine the market, we just try to make educated predictions that should be supported by the market. That being said, there are a lot of sloppy, lazy, or incompetent people in any field, and appraising is not an exception. Hopefully, that appraiser isn't one of them, and his opinion was just "corrected" after realizing his flaws in the previous appraisal.

As for "always hitting the contract price," it often seems like that's the case, but for every deal of yours that goes through because the appraisal matched, there are others that don't go through (those people really hate appraisers). If all of your appraisals are matching your contract price, there's probably a good chance that you know what you're doing as well.

@John Moore@J Martin Thanks for the advice

I'm an appraiser and would like to get my real estate agent license and eventually my broker's license. I doubt I'll be very active in selling, but would like to be able to if needed, or if I come across a deal for myself. I believe there are some college classes that count towards the pre-license, so I was wondering if anyone knows if appraisal classes could count towards that as well. Any information or advice would be greatly appreciated.

Thanks

@Ed L. thanks!

@Cooper B. @J Benoit thanks for the info!

@christopher mcguire I finally took your suggestion and started digging around on here.

@Dennis As Chris mentioned, an appraisal is an opinion, and opinions can change. There are some other sayings about opinions that I'm sure you've heard, but there are also a lot of factors that could cause his change in opinion. Odds are that he was just incorrect in his first appraisal like you stated, but he may have had new/better data in the second appraisal that just didn't support the original number.

In many cases, a contract price is the best indicator of value, assuming the agreement meets the definition of that type of value. If the property has been on the market the past 12 months at $1.9M with no other contracts, it's probably fair to say that $1.9M is too high. With the $1.685M is coming out of your pocket, you've probably done a fair amount of research on the property. Since the seller accepted your offer, it would suggest that he thought it was fair as well; otherwise, why would he leave that much money on the table?

It's probably safe to say that a purchaser or owner will know more about a specific property since most appraisers only get to visit a property once for a short time. Add that to the fact that an appraiser rarely receives all the information requested from the purchaser/owner and still has to meet a deadline, and the result involves a lot of guess work. I don't always aim to hit the contract price, but if it's supportable by market data, it's probably a good place to start. Most lenders only lend on the lower number out of the contract price and the appraised amount anyway.

We've all been wrong before, but a hard-headed appraiser who puts the same number every year despite the writing on the wall is not doing a good job either.

BTW, I'm pretty new to BP and appreciate all of your insight. I also find it interesting to see how others view appraisers. I'm not sure if my rambling helped anything, but I hope your deal works out.

I'm new to BP also, and am interested in attending the meeting. Should I RSVP or just show up at Avondale?