All Forum Posts by: Sanedria Potter

@Lee Liu

There are three approaches to value  The Income Approach, The Cost Approach and The Sales Comparison Approach.  The Sales Comparison Approach is the most utilized Approach.  When doing an appraisal all three Approaches to values are considered, however, they may or may not be utilized.  In the reconciliation section of the report all three approaches are mentioned.  It should clearly mention each approach and why it was or was not utilized for that Appraisal.     You would need to reference the Appraisal report and read the reconciliation comments to determine why a particular Approach was or was not utilized as every property is different.  Hope this helps.

Thanks Hillary

Thanks @Larry Fried

15 year Certified Appraiser,  full disclosure. 

I bought my first deal in 1999 from a wholesaler. The ARV was about $20000 off and the repairs were slightly off. I escaped that deal profiting $6500 when I was expecting $25,000. I ended up going to appraisal school because I never wanted that to happen to me again. I wanted to be an informed investor and it also turned into an Appraising and Consulting career for me.

I am not suggesting going to appraisal school but I am suggesting to always do your own due diligence especially on the ARV.

A free tip from an Appraisal Professional. ...If the sales provided to you to back up the wholesalers ARV are old (meaning six months or older) and the average rehab to final sale time period can range from 2 to 6 months, then that should cause you concen. Any wholesaler should be able to support their ARV with recent sales that will still be applicable to your property when you need it a few months down the road. It amazes me how many people don't think about that. I see posting for properties all the time where the comps provided are old, what we call "dated" sales and investors jump on the deal only to get a rude awakening when they list the property too high. It stays on the market forever and when they finally find a buyer the appraisal comes in lower.

 Please Please do your own due diligence and form a great relationship with an Agent or an Certified Appraiser.  

Thanks @Chaz Reid 

I am a 15 year Certified Appraiser for full disclosure. @Mike H hit it on the head. All those online valuation tools are useless. There is specific data and guidelines we have to determine value and those online thingys do not take that into consideration.  I certainly would not rely on that to make a decision as big as a house purchase.  I always suggest that investors get a good experienced agent or have a relationship with a Certified Appraiser.  There are short form and desktop Appraisals available that allow you to get an actual Real Value without having to obtain a full appraisal.  Of course you would only want to do this for properties that meet all your other criteria,  not just random properties.  These Certified reports will give you the confidence to move forward with your deal or to walk away from a bad deal. Reports run about $50+\-. Check in your area and good luck. 

Wow, so sorry that happened to you. Please let us know what happens. 

@Delonhall it does take a lot of time and patience to keep up with the demands of an investor. We appreciate Agents like you. I am also a 15 year Certified Appraiser and I understand it from both sides. It is all about having a great turnaround time because you can miss out on deals if the urgency is not understood and fulfilled by the Agent or the Appraiser,  or the Contractor, basically any Professional involved in the real estate investment chain.  Take care. 

Nice to meet you John. I am a Certified Appraiser in Atlanta Ga. What part of Georgia are you in? Congratulations on the business.  

You can also check in your area for Appraisers. They have short form and desktop options that will provide you with a more solid value. You can then upgrade to a full appraisal if you need to later on. Best wishes.