Going through the process of rehabbing and refinancing for 30 - yr fixed. Any tips on getting the highest appraisal numbers for commercial mixed use properties will be greatly appreciated.
Having done this before, here’s my tips:
Meet the appraiser and show him the property and all the things you are doing or have done.
Find your own comps. Many appraisers can’t find good comps or don’t dig deep enough to find them.
To get good comps, call a commercial and/or residential realtor and get PENDINGS and SOLDS from your area - get them from 2005/2006. They can both check MLS for you. Tell them you want them all.
Give only the high comps to the appraiser when he comes to appraise.
Make sure your appraiser KNOWS how much you need the appraisal to be.
Can’t think of any more, but will post if I do. Good Luck.
Thanks for the info - greatly appreciated
Keep in mind that an appraiser is a real person. If you are kind and likeable, they will want to do well for you (most of them anyway). If you are married, bring your spouse along.
I have seen times where the appraiser hears the number that you are stretching for and looks for what he/she can do to be sure you get there. You might even hear some leading questions along the way.
Good luck.
Boblaw
There’s no ethical way to stretch an appraisal. It happens all the time and some appraisal reports I see it looks the appraiser was bribed. A true professional appraiser is not going to budge, regardless of what number you need to make the deal work. Ideally it should always be about the property and not the appraiser. Anything else may get you in hot water with an inflated value.
If you just let the appraiser do his thing, you’ll be disappointed. They do not always use current comps nor do some of them do their homework and look for them. And you can’t pick your appraiser so you are at his mercy. If you want a decent appraisal, make sure you are there and have good comps that show your project is worthy of a correct appraisal. No one is looking for an outrageous appraisal or anything unethical - just an accurate appraisal. We have been asked by many appraisers what amount we are looking for and then we give him our comps to support it.
Danny - you and I are usually on different sides of a subject … here too. ;0)
Danny - you and I are usually on different sides of a subject … here too.
lol. Yes we are. This is kind of the same principal as we were talking about regarding contractors althought now we’re still on opposite sides of the fence.
Personally I agree that you have to help the appraiser get a good value.
I’ve seen one appraiser give a house of mine a value of $95,000 and one give it a value of $135,000…both without me saying a word. There are hundreds of comps that an appraiser can use, so of course values are subjective to what he chooses to use.
The best method I’ve found is:
- Be friendly and politely tell him the value your looking for and why. (What have you done to the house, why do you think it’s worth that amount)
- Bring your own comps, Bring your own comps, Bring your own comps. Honestly I can not stress this enough. If you bring 5 comps that support the value you need, they will love you! You just did all their work for them, and you get the value you need. BUT, make sure you don’t give them crap comps that look like your just trying to inflate the value.
An appraisal is an opinion. It is a professional opinion based on the information gathered on that property. I agree with eirek. My appraiser always asks me what number I am looking for. I use the same tools he uses when I am deciding to do a deal or not. I had an appraiser ask me what number I was looking for. I said $190k he said I don’t think you are going to get any more than $165k. I told him what comps I was using and why they were preferable to me (these were more like my property than others) the appraisal came back at $190k. Talking to them and using their tools works best.
Also remember that they are licensed professionals. When they give an appraisal that is out of the standard, they can flag reviews by their governing body. Too many of these and their license is in jeopardy. Don’t try to push them too far, always give them suggestions to bolster the position you want them to take. Remember that one opinion can say that Paris Hilton is a very pretty girl and another can cay that she is a ditzy broad. They are both true it only depends on what point of view you take. If you only view a picture of her versus you actually hear her talk.