If you have been following the blog, you probably know that right now our biggest problem is not finding a willing buyer, but getting a bank that is willing to fund the loan. The rules have changed and appraisers now are our biggest challenge.
Most of our properties sell to FHA Buyers, so we already have to deal with the FHA 91 Day Rule. Some banks allow the loan officer to pick the appraiser, so we try to work with smaller lenders and ones we know give us some control in the process.
When all other attempts fail and we get a review appraisal ordered or we are working with a big bank and cannot recommend an appraiser for the original appraisal we are stuck and need to find a way to make lemonade with lemons.
Step 1, typically the appraiser will call the seller’s agent and ask how they can gain access to the property. At the start I’d happily give them the lock-box combo and let them view the property at their convenience. We have changed our game plan and now we always go meet the appraiser at the property.
Step 2, we are never very pushy with the appraiser but we tour them through our property and spend a lot of time discussing what we did to upgrade the property. Essentially, our goal is to build a relationship with them while making a case for the increased value.
Step 3, we discuss that we have received multiple offers on the property and talk about how some appraisers can use these in lieu of comparables. Most appraisers have turned this method down as I think most of them are uncomfortable with this.
Step 4, we offer our business card and discuss how “hot” the current market is with them. How we have seen multiple offers, values increasing etc.
We have used this strategy three times so far and we have got the desired results everytime. Some appraisers just will not work with you regardless (especially VA and special program appraisers), so we don’t expect it to work all the time. But us being there and trying to be friendly is not going to hurt our value and in most cases I think it will help matters.
My partner met someone at House #4 for a FHA Bank of America loan on Thursday. The appraiser was adament on how impressed she was with our work. At the end of the meeting she told him “not to worry about the value, as we will easily get there.” That is sure a comforting thing to hear in this market!!