Why the Odd Appraisals?!

[John Prucha]

Hello everyone!

My investment partner and I are on the BRRRR train and have noticed that appraisals seem tightly influenced by offers. We expected a recent wholesale deal to appraise 20-30% higher than our offer. It matched our offer exactly. Recently, his cash out refinance deal appraised at exactly what he told the banker he thought it was worth. Is this by happenstance? Beyond upgrades, have others learned to have a perceptible influence over appraisal outcomes particularly during cash out refinances?

Thank you for your thoughts and insights!

John

[Chris Mason]

The refi is a random coincidence.

The purchase ones are not a coincidence -- when my processor orders an appraisal,  he's uploading the purchase contract for the appraiser to see. 

If you read the definition of 'market value' contained in an appraisal report, it makes sense that it would hit exactly the contract price 95% of the time.