One of the considerations when purchasing a note will be the appraised value of the home.
Although there are some great programs on the internet that aid the average consumer in getting an idea of a value, they are not always accurate and thereby credible when you are talking about investing money in a seller financed note.
The actual value of a property can be determined in a couple of credible ways.
Oftentimes investors get what is called a “drive-by” appraisal. Usually conducted by a licensed appraiser, the report will still include comps of other sales in the area. The only exception is a “drive-by” appraisal does not require the appraiser to have access inside the property. The appraiser actually drives by and takes photos from the street for their report.
Some investors will use what is called a Brokers Price Opinion (BPO) – utilizing the opinion of a Realtor or Mortgage broker. The often do very similar comparables as an appraiser will; typically at a lower fee.
In either case, the method of determining value is left up to the investor.
Leave a Reply