Appraiser

[Jordan Moorhead]

Has anyone taken the licensed appraiser exams and used it in real estate investing to help get an edge?

[Chris Mason]

Hi @Donna Mason,

If you've got family in Kentucky, we're probably distant cousins or something. :)

If you want to get in front of appraisal issues for your BRRRR deals, appraisal software isn't really going to help.

What will help is understanding that appraisal fees haven't been tracking with median income increases for years. This forces appraisers to be volume producers rather than quality producers, just to be able to put food on the dinner table. 

This means that the best way to get in front of BRRRR appraisal issues is to do research that appraisers WOULD be doing if a normal appraisal fee was ballpark $1,000 instead of ballpark $500, and hand that research over to the appraiser (or we can convince the American people that $1,000 is worth it for a high quality standard appraisal).

In practical terms, an example of what that means is that 3-4 months before your BRRRR appraisal (when you're still doing rehab work), start visiting the open houses of all of your future comps, get the seller's disclosure packages from listing agents (pretend to be an unrepresented buyer if that's what it takes), and find out in writing from the seller of that house why that comp is about to sell for $50k or $75k less than what you think your property will be worth. (At $500 a pop, appraisers do not have time/money to conduct this type of continuous ongoing research, they've got keep churning appraisals out as fast as possible to feed their families.... as a lender frankly I'm not leaving the office for a refi, and agents don't work on refis, so this is on you if you want it to happen.)

Now, what do you have? Three months from now when your appraisal is conducted, and those houses you visited have closed and are now comps 1, 3, 4, and 6, for your house, you will have in your hands documented evidence you can spoon feed your appraiser about everything wrong with comps 3, 4, and 6 that explains why they sold for less than yours, and you can show why 123 Main St which sold for $20k more than you think yours is worth, is the best and most appropriate Comp 1 of them all (Comp 1 is given the most weight, Comp 6 the least... if you want to nominate for Comp 1 position, you'd better damn well be able to support that nomination with documented evidence!).