To use an Appraiser or Not?

Question

My husband and I are starting our BRRRR journey and have found a few properties of interest. We are having our contractor come out to view the properties with us and provide rehab estimates, but we are wondering is it also necessary to have an appraiser come out and help with the ARV or should I just run comps to come up with an estimated ARV (im a real estate broker)

When analyzing your deals, whats your process?

Thanks for any and all feedback/ suggestions.

When analyzing your deals, whats your process?

Thanks for any and all feedback/ suggestions.

Tyler Gibson · Answer

@Krystyna Watkins how accurate are you when you run comps? are you a pro that almost always get it right? If so then I don't know why you would pay for an appraiser at this point. If you are unsure or can't find comps then maybe an appraiser.

Tyler Gibson · Answer

@Krystyna Watkins

Before you hire them I would ask if they are comfortable doing that based on your scope of work. Otherwise an appraiser is just going to tell you what it is worth in the current condition.

Krystyna Schexnayder · Answer

@Nicole Heasley

And thats exactly why we’re leaning towards getting the appraiser because even with me being an agent, i dont feel confident that comps will be accurate enough for the ARV. There are just too many other variables that I feel are a factor that I cant pull when running current-day comps.

Krystyna Schexnayder · Answer

@Tyler Gibson

So an appraiser will be able to provide an ARV?

Krystyna Schexnayder · Answer

@Mike Cumbie

Thanks!

Nicole Heasley Beitenman · Answer

Great question. I'm having a lot of trouble with ARV right now. One of our first properties appraised for about $12K less than we thought it would when we refinanced it a year and a half ago. We're looking at getting another property now, and our estimated ARV's are around $30k lower than what our realtor says comps are going for (and he was the one who overvalued our under-appraised property, so we're hesitant to trust his ARV). I'm looking forward to seeing the suggestions you receive from other BP members!

Mike Cumbie · Answer

Hi @Krystyna Watkins

My biggest point is that an ARV or CMA or Appriasal is based off of "today". Since you are looking at getting information for ARV <Once Rehab Complete.. Maybe 6 months or more>. I would do it myself to get a good idea to budget off of. Once you have it in "Show ready" condition and are applying for a refinance then I would pull an appraiser in to make sure you go for the highest number you can leverage. Since you are a broker you also can see what is pending and time your appraisal accordingly. For instance if a comp is listed high, went into pending in a day, you know it went close to asking. I've held off appraisals until something comparable was closing that would be good for my numbers. I just pick up the phone and call the agent "Hey Mary, when is your 123 main street closing? I need it for a comp." They usually give you all sorts of information because.... well RE agents like to talk :)

Just my 2 cents and good luck!

Krystyna Schexnayder · Answer

@Tyler Gibson Thank you!

To use an Appraiser or Not?

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