Posted by Dave T on May 24, 1999 at 01:13:00:
Perhaps your commercial lender did not explain their lending guidelines completely. Usually, a bank commercial loan will only be for a maximum of 80% of the purchase price, or 75% of the appraised value, whichever is less. Bank commercial lenders do not usually make loans for a percentage of the appraised value, but rather they loan a percentage of the purchase price.
In this context, the banker who says that the appraisal is not considered, really means that the appraised value is not (usually) the basis for the loan amount.
By the way, commercial appraisals are more complicated than residential appraisals and the higher costs reflect the additional research that must be performed. $1500-$2000 for a commercial appraisal is consistent with my experience.
Appraisal - why bother? - Posted by Rich
Posted by Rich on May 23, 1999 at 09:23:49:
I’ve posted some of my trials and tribulations trying to get financing on a commercial property. I just wanted to speak a little about appraisals. I paid $1500 for a commercial appraisal - the only other commercial appraiser in my area charges $2000. I’ve been told by people from other areas that these guys are common thieves. When I told a new banker that I have a contract on a property and that the contract is for about 60% of the appraised value, his response was. “We don’t look at appraisals. We look at how much you’re paying for the property. We figure that’s the actual value.” I said I just paid $1500 for this and now it’s worthless?! And then he said I needed an appraisal on another property I own if I wanted to use the equity in it for a downpayment. I told him I’d pay $100,000 for the property so you don’t need an appraisal…since you based the value of the other property on what I would pay for it. He didn’t get the joke. What gives? I could walk in any car dealership and drive away in a $40,000 car, but to buy real estate, I need to grovel and genuflect before these anal retentive “yes men” in order to have them give me the “thumbs up” or “thumbs down”. I don’t get it. Who made up the rules for real estate anyway? And these licensed appraisers - what a scam.
Just thought I’d vent a little today.