Income property appraisals are terribly expensive. Quotes of $5,000 are not uncommon from banks, CMBS lenders, and S&L’s.
In addition, Federal regulations require Federally related lenders to order their own appraisals. If one bank orders a $5,000 appraisal from Mr. Reputable,M.A.I. and then turns the deal down, the next bank will have to order its own $5,000 appraisal!
In order to prevent unnecessary appraisal fees, and in order to get the digital photographs you need for your proposal submission package, you should always arrange for a site inspection of the property before ordering an appraisal. In fact, if you order the appraisal on your own, no Federally related lender will be allowed to use it.
If the property is out of your driving range, ask the borrower for a $50 site inspection check. Then order some digital photos and a quick, drive by verbal report from a local appraiser, realtor, real estate broker or friend. All you need are a number of attractive frontal photographs of the property, some street scenes, and a verbal report on the socio economic nature of the area.
Do NOT ask the borrower to take the pictures! You will lose the sale every time. The borrower will never send them, and while he is procrastinating, he will be justifying his procrastination by thinking of everything wrong with your loan. In addition, you would still need an independent third party to report on the socio economic nature of the area.
If you decide to take the pictures yourself, you must not ask for the $50 site inspection fee. Such a fee would constitute an illegal advance fee and could cost you your real estate license.