Mark,
I don’t see why people would raise their eyebrows at your question. I think it is a good one.
You hit the nail on the head when you said that appraisal are not an exact science. This is where the problem lies. Appraisers know that it is not an exact science and use it wrongfully. Many homes can look the same on paper but a real comparison between two homes can show a world of difference. It is unfortunate, but you and I both know that an appraiser who were to do what they really believe is going to starve. I think it is sad.
When I buy a home, I buy based off of what I know the home is worth. I never buy based off of what I THINK I can get for a home because a higher comp or two exist. Because I buy based on a lower value I am not forced into trying to get TOP DOLLAR for my homes when I sell them.
I do not have to order appraisals that often because I finance most of my own homes. I personally do not have an appraiser who I have used more then 2 times ever. I just used a new guy last week, who I was asked to use by my bank. He was right on with 2 of my sales so far, so I was happy with him.
So the guy I am using now I will continue to use him, my bank wants me to, so I don’t have much of a choice in the matter.
Steve,
Your Posting below for to newbies is good advice. And I am led to belive that many of the people that were arrested had extreme cases of fraud and there were a lot of people in cahoots on the deals.
You mention that many people get juiced apprasials to put together the killer deal. To me It would seem that you would have to have an appraiser in your back pocket to make these work.
That leads me to a question on how you get your apprasials. When you call for an appraisal you must have an idea of what you need to get to put your deal together. And I am assuming that you do your own homework to have a value in mind before you order one. So my question is do you tell your appraiser what you think it should come in at or do you just let them appraise it and hope for the best? If you do let them do this I dont see how you can keep control of your deals. I used to do it this way and I would get as much as $10,000 diference on the apprasials for the same property.This would really make it hard to put my deals together. Since then I do my homework and tell them what I am after, if the comps are right, I get it, If there not I don’t.
To me this is a touchy subject because apprasials are not an exact science and there is a lot of flexibility for an appraiser. So is it Fraud in your eyes to ask for the value you think it should come in at as long as the appraiser is legitimatly doing their job? I do many retail Flips and I find that even though the property may be listed at a certain price it doesn’t mean that it is not worth more than the listing price that may have been low to start with. It’s all in the Homework.
I know this will probably raise some eyebrows but I am curious to what your opinion is and how you handle your apprasials.