I'm sure I'm no different than many of us but with some of my experiences in business (or life) I just feel the need to pass them on to friends, clients and business associates, hopefully we can learn something from each other when we share these stories. Here's one I'd like to pass on to you.
My business has been private mortgage loans, sometimes known as "hard money" for the past 24 years and in our type of lending it's more about the appraisal than anything else. With values all over the place (mostly low) the independent appraiser we use has suggested we ask the borrowers to order a desk-top appraisal first to find a probable value before we go any further, just to make sure we're in the ball park, this also saves the borrower money if we're not. The desk-top cost is under $100 and it speeds up the process, we get it back within 24 hours as apposed to a 4 day turn around for a full appraisal and a cost of $300. We can't accept just a desk-top and we'll eventually need the full appraisal but why spend $300 if the value doesn't come in when you could have spent $75.
Even if the borrower is experienced I still suggest this plan but you know how it is, not everyone wants to go through the extra step or the investment. A borrower who happened to be a Realtor had researched a property and was convinced the value should be $110,00 to $120,000 and wanted to go straight to the full appraisal. Well, 4 days and $300 later the value came in at $80,000 and that was the end of the deal. By the way, if you're thinking this appraiser is extra conservative and that's why the value came in so low, that is not the case, he is a seasoned conventional appraiser. Honestly, I just plain hate to see anyone waste their money if it can be avoided. If your appraiser can run a quick desk-top appraisal for you it may be a wise business strategy and worth it in the long run.
Trent Dalrymple
Metro Mortgage Investments, Private Mortgage Experts
(248) 547-3006
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