Appraisals on flipped, as-is properties?

I’ve been looking into buying an “as is” house (because that’s what I can afford), and a lot of these places seem to have been short sales, estate sales, etc., that are now back on the market unrenovated but at a substantial markup — sometimes more than double what they sold for just weeks earlier. I’m wondering about getting financing for such a place. How would an appraiser evaluate it? Is it likely that the house will appraise at much less than the marked-up asking price?

bigwayne

in Appraisals 12 years and 7 months ago

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Springs | 12 years and 7 months ago

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Appraisers cannot exclude comps if they are relevant when valuing the subject property.  Appraisers are not allowed to ignore any comp if it is relevant, despite the client’s wants , needs and guidelines.   FHA can tell an appraiser to ignore or to not use certain comps, but the appraiser is not bound to follow the client’s guidelines.

emilyfrances | 12 years and 7 months ago

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We are in contract on a house (not a flipped one) and FHA does not allow the apprasier to use a flipped house as a comp.  I imagine they also have rules regarding the purchase of a flipped house.  It will likely be that you can’t purchase a house that changed hands less than X months ago.  Banks probably have guidelines they need to follow on conventional loans as well.  You should check with your bank to determine if they’ll finance a flipped property.