Having an appraiser evaluate a house we are buying in cash?

[Nicholas Jones]

Hi All,

I am looking to buy a house to flip in the Austin area, and in addition to my contractor inspecting the property I am wondering if anyone thinks there is value in also having a professional real estate appraiser come to give a valuation on the house as well before we close the deal. My thinking is that the appraiser could confirm the exact market value of the house so we can know for certain if we are getting a good deal, even though it would not be required since we are not financing through a traditional mortgage. Is this a common or advisable practice for investors who are buying with cash?

Thanks for your help!

[Mike Dittman]

I have to disagree with everyone saying not to hire an appraiser, esp for a flip. Disclaimer: I flip homes, I have been a Broker in Charge. I am NOT an appraiser. Agents find your "value" off SF, comps, and recently sold. Fair enough. This does give you a value. This may or may not give your buyer confidence. A "certified appraiser" can give you a "certified appraisal" that a potential buyer can:

1- take to the bank, or mortgage company. 

2- This is an excellent sales tool when it comes to a buyer signing on the bottom line, and unless your buyer is paying cash, it needs to be done anyways. 

3- Is a solid and certified validation with regards to your asking price.

4- Lets you know for sure how much money is too much money on the project /

A CMA is subject to the RE agent choosing comps within a given area, and thus subject to that agents "opinion" of which properties work best on a comparative level. Agents are not appraisers, and a lender will not lend on a CMA. Each individual property has it's own attributes. Depending on how deep you are going into your rehab, (ie. new elec, HVAC, and so on) adds a value beyond what comps can see. 

So is it necessary? No it is not. Is it wise? Well, you can decide when showing your shinny new property to a potential buyer, and give them a copy of a "certified appraisal" to take home, and the bank. If nothing else, it will tell them you are on your A game. It further lets you know, an agent isn't blowing sunshine up your *** to potentially gain the listing when the property is complete. For me personally, $400 -  in the scope of a rehab, is money in the bank, money well spent.