There is a technique that some investors have used to minimize the risk of a low appraisal. But it only works if you know which lender will be making the loan on the property. Let's say it's ABC Lending. You contact ABC Lending and ask for a list of their approved appraisers. Then you select one from their list of approved appraisers to do the appraisal. After it's received, the purchase proceeds. And when it comes time for the appraisal, you already have one in hand--done within the 90 days by one of their approved appraisers.
However, I don't know whether that technique still works. And it won't work if the buyers decide to go with DEF Mortgage instead, or if the house doesn't get a contract quickly.
Finally, recognize that what we're all trying to avoid are those crazy, low, uninformed, inaccurate below-market appraisals. If you do a decent CMA, you can be reasonably confident that a good appraisal will come in at about the same number most of the time. The risk is that the appraiser will be from out of town, or rushed, or inexperienced. Getting a seller-paid appraisal doesn't alter those situations. . . . unless you're able to share the appraisal (or at least the comps) with the lender's appraiser.
Hope that helps.
Homeowner recently refinanced, not planning to see anytime soon. Then plans changed, so the appraisal was very fresh when we met to discuss listing their home for sale. I reviewed my pricing recommendation without knowing the appraisal number. When both analysis came to the same number, it was an easy sell to the homeowner.
The home was listed at a very smart price - well received by the market and sold quickly for top dollar.
Jeanne Feenick in New Jersey
High value communities with diversified housing in regards to age and size, which have very low number of sales are the prime candidates.
A recent sale allowed the seller to benefit from a commitment for the buyer to waive any appraisal contingency and would come to the closing table with a big pile of cash. For the home owner, it provides a layer of transparency allowing the appropriate strategy to be discussed.
Best of success,
ReMax Realtec Group
Palm Harbor, FL