appraisal

[Sophie Andrews]

Hello,

I am a starting investor. An older lady wants to talk to me about selling her home. She informed me that the house needs a lot of repairs and she has never gotten an appraisal, therefore has no clue how much to quote for the house. I do not want to take advantage of an old person. Please tell me to best way to direct her. I am meeting with her this afternoon to view the property. My questions are: should I find her an appraiser? How do I estimate repair cost? Also, if there is any local appraiser, please leave your info. Thank you

[Liam Goble]

The cost for repairs can vary significantly, depending on the 'quality' of the improvement. I'm a contractor, so I generally complete most of my repairs and upgrades myself. As a contractor, I provide estimates to potential future clients. However, just because I am able to provide estimates doesn't mean I am right 100% of the time.

In Pennsylvania, contractors are required to provide clients a fixed bid cost at the outset of the job. These can be developed in one of two ways: 1) a straight fixed bid, or 2) a Time and Materials contract (T&M) with a "cost not to exceed" clause.
For some of the work I complete, I use a fixed bid. This is beneficial to my clients because they know there will be no surprises throughout the job. This is generally beneficial to me, because I know exactly what I am going to run into on the job and my crew knows exactly how to handle the improvements.

For other work, such as window replacement, kitchen gut-rehabs, etc. I generally use a T&M with the "Cost not to Exceed" about 30% above my anticipated costs. This provides me (as the contractor) with peace of mind that if I find I somehow grossly underestimated labor or materials, I'm partially covered. This also gives the client some peace of mind because they know there is a 'worst case scenario'.