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I'm assuming the potential buyer suspects that you are above market value (a far too common occurrence with FSBOs), and wants the appraisal to confirm whether this is a deal worth pursuing.
I did give them the right to appraise after they have the property under contract, just not as a contingency of the sale. If they are serious, they can make an offer at my full price and do inspections and get an appraisal while it's in escrow. They can obviously get out of the deal during the inspection time period for any reason their inspector finds, as it's an as-is sale. I'm fine with them getting inspections.
I have no interest in a party that is going to use an appraiser to make their offer, when they have been told the price is firm. We all know how subjective and skewed the appraised price can be by an appraiser representing the interests of a private party. To me that is starting off the deal on a negative note.
These folks have been inquiring about the property for probably 6 months, saying it wasn't in their budget, first they only have $750K to spend, then it became $850K. As a courtesy I send them links to other similar properties, mine is by far the best value...the next closest thing with large acreage is over $250K more.
I don't know if you specialize in horse farms, but they are very difficult to come up with comps on. Most appraisers will give the same value to a 10 stall horse barn that was built in 2014 as a barn built in 1960. So, no most of them don't appraise, and I have already discussed this on several occasions with this party. My improvements are very high end, and appreciated by horse people but the appraiser doesn't always recognize these level of quality because they are not equestrians.
The other cash party is not an attorney. and they have an agent who understands horse property.
I have a friend who has the most magnificent stable. I don't even know all the correct horse terminology but the floors are antique brick the couple hand laid. There is an office and a room with a bed for resting while a horse is giving birth. It never smells, even at surprise visits. Spotless. They put in water in the fields, fences and so much more. The problem is they felt they did not need much in a house for themselves. Very simple house. Interesting heat source a few yards away where they stoke a fire and that runs heat under the floor of the house, whose warmth is sent up to the second floor. But difficult for them to get a price or an offer on. The business is small and perfect. The "perfect" rules out a lot of small farm buyers. The "small" rules out a lot of big serious project people. The horse part warrants a good price; the house part is not what the bigger payers want to live in.
A) You won't allow them to get an appraisal "before" it's under contract.
B) But you specify that you won't go under contract with something that says it must appraise at $x.
To me this sounds a little too stern.
If I was selling, I would agree to either A or B above. It is very common for cash purchases to have a clause that says it must appraise for $X. This is normal. To say you won't allow that might make them think you are a difficult seller.
It's one thing to be firm on your price. That's ok. But let them get an appraisal either before or after it's under contract. If they are willing to do it before you go under contract, so what If you already know you are firm on your price, then it's no loss to you if they attempt a lower offer. But they might be ready/willing buyers that just want to be assured (by an appraiser) that they aren't overpaying. It's possible it's someone getting for their own personal use and they just happen to be an attorney.
I think you should think about it from the buyer's perspective. If I wanted to buy a type of property I knew nothing about, I certainly would want some independent assessment of value before I signed a contract to purchase it. You are basically saying, "It's worth this because I said so, and I won't let you assess it's value until you agree to buy it."
I still say, let the buyer get an appraisal as long as he signs a legal agreement that you get a copy too.
Then you can sit down and negotiate if you want, or tell buyer to go jump in a lake.
No agreement you get a copy, no appraisal. I also still think it's possible to get an appraisal without entering the property. An appraisal is merely a very skilled comp.
I still say, let the buyer get an appraisal as long as he signs a legal agreement that you get a copy too.
Then you can sit down and negotiate if you want, or tell buyer to go jump in a lake.
No agreement you get a copy, no appraisal. I also still think it's possible to get an appraisal without entering the property. An appraisal is merely a very skilled comp.
Exactly, he can do a drive by appraisal, he has access to interior photos, property info., comps. etc. online.
Exactly, he can do a drive by appraisal, he has access to interior photos, property info., comps. etc. online.
I'll repeat to you what I stated to previous poster: No competent appraiser should be performing drive-bys on multi-acreage hose properties with significant improvements/amenities.
OP, why are you so dead set on not allowing an appraisal? It makes it seem like you are trying to conceal something. If it appraises even close to your ask, then you've got a cash buyer.
I'm not saying you are trying to conceal anything, but it certainly would seem like it if I were your buyer.
OP, why are you so dead set on not allowing an appraisal? It makes it seem like you are trying to conceal something. If it appraises even close to your ask, then you've got a cash buyer.
I'm not saying you are trying to conceal anything, but it certainly would seem like it if I were your buyer.
Because I have had several discussions with the party that farm / horse properties don't appraise, as appraisers are not specialized in the value of equestrian facilities. This is also about LOCATION. I am 5 minutes from the main competition facility in the state, and actually the entire PNW, no appraiser is going to understand that. To a horse person that competes at that venue 5 months out of the year, that is a HUGE added non-tangible value.
Previously, I have been told by the other party the property is over what they want to pay, for any property. I have also been told they want to base their offer on an appraisal. I have told them I will not negotiate down based on their private appraisal.
Also, honestly who would trust an attorney and his "private appraiser" to give a fair value. The attorney's "trial experience includes a broad range of commercial, real estate and financial fraud cases". You don't think he has access to an appraiser that will skew the appraisal? Then his wife could possibly run around the local horse community gossiping that the property appraised at a certain price, and run off other prospects.
I have nothing to conceal, but I'm not going to play this game with an attorney that is going to try to convince me the property is worth less. It has been expressed to me by several agents, it is priced fairly. It was also in escrow w/ a Realtor for herself but in the end should couldn't sell her home for enough to make it work.
The attorney would actually be wiser to come in with an agent to represent him, as I have it listed on the MLS...but he's trying to get the place for cheap, so that would defeat his goal.
Last edited by gray horse; 07-03-2014 at 07:23 PM..
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and they have an agent who understands horse property. 
