Tupper, Real Estate Pro in Chicago, IL

Is it unusual to hire a real estate appraiser for an investment property you wish to buy?

Asked by Tupper, Chicago, IL Mon Jun 11, 2012

I am looking into buying an 8 unit multifamily building, but on top of my own research I am curious into getting a professional appraisal to help me determine what a reasonable asking price is. Is this a good strategy or a waste of money?

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Answers

6
You may also want to consider hiring an inspector to provide a thorough inspection of the property. This can greatly help you determine post purchase costs, maintenance needs and whether or not the purchase works financially.
Since it is a multi-unit you may also want to see if there is an outstanding Housing Court case, any open violations or an AH lien.
0 votes Thank Flag Link Tue Jun 12, 2012
The cost of obtaining an appraisal in relation to the purchase cost and maintenace cost of this 8 unit building is negligible.
0 votes Thank Flag Link Mon Jun 11, 2012
Appraisal is a smart thing to do, you want to know if the multi-unit building is in good condition and you are getting exactly what you are paying for. You don't wanna end up having those surprise maintenance cost. Feel free to call me with any questions you have.

Rashida kharkhariwal
Broker- prudential rubloff
847-226-2389
0 votes Thank Flag Link Mon Jun 11, 2012
Interesting question. I would say it really depends on why you want the appraisal done. If you want it done just to ensure you are not paying too much, then I would say it may be of use to you. However, just remember that appraisers are licensed by the state and are very careful about the appraisal amounts. They can only base it on the last 3 comparable properties sold in the last 6 months or so.

So, the comparable properties really greatly influence the appraisal amount. If you are not in a market with a lot of sales or if your property is very unique, this can skew the numbers a bit.

You can negotiate their rate though and sometimes you can reduce the services provide or the amount of reporting they need to give you in order to negotiate a better price.
0 votes Thank Flag Link Mon Jun 11, 2012
I have had a ton of investors do this in the past. Its not a waste of money especially if your looking to do cash.
0 votes Thank Flag Link Mon Jun 11, 2012
As a residential appraiser and a broker I think it is always a good idea to get the opinion of a disinterested, 3rd party. But I would also say it depends on the price of the building. If it cash flows and the deal makes sense from a cap rate standpoint, it may not be worth it.
0 votes Thank Flag Link Mon Jun 11, 2012
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