Posted by Stacie on November 06, 2001 at 08:40:03:
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Appraisal, Inspetion, or BOTH? - Posted by Stacie
Posted by Stacie on November 04, 2001 at 17:39:11:
Hello,
When putting a house under contract should I just get an appraisal done? Will that be enough to show to potential rehabbers if I just want to flip with a double close or whatever?
I figure if I sign one up, I can just fax the appraisal (inspection/both) to my end buyer. And if they like what they see then we can talk.
Will an appraisal show enough info to determine ARV or will the inspection show more or add to this? I’m looking to cut costs but also speed the flip process.
All thoughts and criticism appreceiated.
Thanks,
Stacie
Re: Appraisal, Inspection, or BOTH? - Posted by David Krulac
Posted by David Krulac on November 05, 2001 at 15:47:41:
There are cases where you might want an appraisal, or an inspection or both. IF you know values in your area, and can identify problem areas in a house your self, then you need neither.
On a lease option that I did this year I let the buyer have a professional inspection done, at their expense, and the report shared with me.
On another deal I was buying all cash and had a contingency on an MAI apprasial. The appraisal came in low and the price was negotiated down. The agent said that she never saw a cash deal with an appraisal and a price negoitiated down after the appraisal.
On another lease option the buyer thought that the steel I beam holding up the house was too small. Instead of losing the deal I suggested a professional engineer, to evaluate THAT issue alone as a contingency. The structural engineer quickly determiend that the extra thickness of the vertical part of the I more than compensated for the reduced height of the I beam. Deal done.
Just like cards, you got to know when hold them and know when to fold them. There are times when you can use either an appraisal or an inspection to cement the deal. then you use them. If there is no good reason to have either don’t have them. And there could be circumstances where you need both to sell the deal.
Re: Appraisal, Inspetion, or BOTH? - Posted by dewCO
Posted by dewCO on November 05, 2001 at 11:15:41:
Too expensive to do an appraisal for every deal. YOU need to know the values in your area and if there is enough to flip the deal or not. And the flippees will also need to know their values. But if the value really isn’t there (to flip it) you probably aren’t going to get the deal done. An inspection doesn’t help you totally with value, just in knowing what needs to be done to rehab it, which will ultimately affect it’s value.
Re: Appraisal, Inspetion, or BOTH? - Posted by Tim Fierro (WA)
Posted by Tim Fierro (WA) on November 04, 2001 at 22:04:38:
If you are going to flip to the rehabber, he/she will want to come by and see what is required, so I don’t think an inspection would be necessary. By your own intentions of flipping it to a rehabber, you already know it needs work. What you don’t know is what kind of work the rehabber wants to do, and is willing to do.
Knowing comps for the market in that area is enough to get an idea on ARV, I wouldn’t spend money on an appraisal. If your rehabber investor is going to use loan funds and needs an appraisal, they may have one they need to use, or want to use.
Best bet? Ask your rehabbers you sale to what they prefer; they would be the best to ask this question to. What happens if you pay for an inspection, and pay for an appraisal, and your regular rehabbers you sale to don’t want it? You are out the money for these 2 things and now need to find alternate buyers for this property.