A few years ago, I was engaged to appraise an income-producing property in Mississippi. The appraisal was for the purchase loan, and during the property inspection, I interviewed the owner—asking the sort of questions any typical commercial appraiser would ask: property insurance costs, utilities, occupancy and vacancy figures, etc.
With each question, the owner grew increasingly agitated. He didn't understand why any of that mattered. I tried explaining as best I could how expenses directly affect the value of an income-producing property.
I was wasting my breath. He already knew what the property was worth, he told me. And with that, the interview was over.
As I left the property, I felt more sorry for him than annoyed. I couldn’t help wondering about the cost of his certitude. An appraisal from an experienced professional isn't cheap. But if you're a buyer or seller, getting the value wrong can cost far more. Refusing to pay for an appraisal because you already “know” what the property is worth can be the very definition of penny-wise and pound-foolish. Certitude feels free. It might also cost you a small fortune.
I turn down work all the time. Plenty of folks don't need an appraisal. If you're working with a knowledgeable agent or broker who knows the local market and your property type, they can usually get you where you need to be (especially on a single-family home). But commercial property, vacant land, multi-family — if you're uncertain about the value, an appraisal from a certified general appraiser can pay for itself many times over, no matter which side of the closing table you're sitting on.