Paying for a commercial appraisal
I am in the process of trying to borrow money against my commercial property. I submitted all the paperwork and they asked me to pay for an appraisal.My financials are average at best. Would the bank make me go get an appraisal then deny me afterwards?
By asking me to pay for an appraisal, are we toward the end of the application process?  Or is it common to ask for an appraisal either way?
I just don’t want to pay for an appraisal if I have no chance of getting a loan.
[{"id": "fnlyjid", "text": "Appraisal is just a standard part of the process.  Am commercial appraiser.", "replies": [{"id": "fnlysmi", "text": "So regardless of the financial strength or lack thereof of the borrower , they will ask for an appraisal?", "replies": [{"id": "fnlzixe", "text": "Yes. The lender has to determine the value of the collateral they're lending on.", "replies": [], "depth": 3}, {"id": "fnm00gc", "text": "I underwrite loans for billionaires. Every single property gets an appraisal.", "replies": [{"id": "fnm0hqg", "text": "So I shouldn\u2019t view this as a positive step to securing the loan. It\u2019s more procedural and I can denied after all this. Would I at least get a copy of the appraisal I paid for ?", "replies": [{"id": "fnm0znw", "text": "It's not positive or negative, its just the standard procedure. I can't imagine why you can't get a copy. Commercial appraisals aren't cheap, you better get a copy!", "replies": [], "depth": 5}, {"id": "fnm355a", "text": "Well, its not typically \"get an appraisal then let's talk about it\". You should have an idea of what it will appraise for? I'm guessing you have a specific amount you are wanting to borrow, and the bank has a certain loan-to-value (LTV) ratio they are trying to hit. So ask the bank what LTV they comfortable with given your financials, and then you'll know how the loan amount might fluctuate if the appraisal comes in under what you expected or needed for your loan amount.\n\nThere's probably a few ways to approach it but certainly you should have an indication of terms from the banker, similar to an LOI, before paying for an appraisal. A proposal letter if not a commitment letter.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "fnnhhpv", "text": "You know what the value will appraise at already, or at least should. Appraisers aren\u2019t magicians.\n\n\nThree value approaches. Cost, income, and comp/valuation. If income producing property the income is most applicable. Just take your NOI and divide by the market cap rates. Your CRE broker will know those as appraisers call brokers to get cap rates.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fnlysn1", "text": "Standard. Borrowers pay all expenses, including lender legal. read the term sheet / loan app for what happens if the appraisal is low- ie reduce loan proceeds to stay within LTV. Lender can back out before closing for any reason that\u2019s covered in the closing conditions and subject to credit approval.", "replies": [], "depth": 1}, {"id": "fnm31zw", "text": "I\u2019m surprised with all of the bad advice here. You can certainly ask the lender to finish your personal global cash flow analysis before engaging the 3rd parties. \n\nIt is not atypical for lenders to submit a commitment subject to the appraisal. If you are worried that your financials aren\u2019t strong enough, have them finish the borrower underwriting first. This will delay your closing by a week or so but you won\u2019t be out the money if you\u2019re denied.", "replies": [{"id": "fnmgcgu", "text": "Most of the credits I analyzed at my local community bank were \"subject to appraisal.\"  We didn't spend the customer money before doing the due diligence and the global.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fnmzxcp", "text": "Analysis of the borrower/guarantor is typically completed concurrently with the appraisal, but it\u2019s perfectly fine to request your personal financials / global cash flow to be completed prior to ordering the appraisal. Happens all the time", "replies": [], "depth": 1}, {"id": "fst6gbn", "text": "Check out this video of 10 ways to maximize your commercial appraisal. [maximize your commercial appraisal](https://youtu.be/r7sKJrt7D8I)", "replies": [], "depth": 1}]