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Exterior Only REO's

Discussion in 'Urgent - Help Needed' started by Scott R Marshall, Oct 27, 2011.

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  1. Scott R Marshall

    Scott R Marshall Senior Member

    0
    Dec 14, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    I swear I saw this type of post recently but I can't find it. Client wants an exterior only on an REO with an REO addendum along with "as repaired" values and an itemized list of cost to cure items. So, is it based only on what I observe from the street, making all the necessary EA's regarding the interior being in average condition or is it impossible to do an exterior only inspection for this type of assignment.

    And let's assume for the moment that when I drive up to the subject, it doesn't look like a bomb hit it.
     
  2. vanguard

    vanguard Member

    0
    Oct 18, 2004
    Professional Status:
    Retired Appraiser
    State:
    Minnesota
    You cannot estimate a credible cost-to-cure with an “exterior only” inspection. However, you may be able provide a reasonable repair estimate if you can obtain information based on a recent private or public inspection report. Significant disclaimers can be addressed in an addendum and you will have to state that your estimate was based on someone else’s interior inspection. Their interior photo's may help as well.
     
    Last edited: Oct 27, 2011
  3. HF Mudd

    HF Mudd Senior Member

    53
    Jul 31, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    Personally, I wouldn't do an exterior-only REO. Too much that can be wrong with the property and too wide of a range of values depending upon condition.

    I've seen REO properties where the pipes and wiring had been ripped out, boiler and hot water heater carted away, basement flooded, etc., etc., but looked fine from the outside.
     
  4. NorthTexValuation

    NorthTexValuation Senior Member

    0
    Sep 17, 2011
    Professional Status:
    Certified Residential Appraiser
    State:
    Texas
    You cannot EA away the interior condition of the property no matter whether it is an REO, purchase or refi on the 2055 as you cannot assume the exterior condition reflects the interior condition.

    And I would never perform an exterior inspection only for any REO as I have seen a number of those properties that looked OK from the outside, but the interior had been stripped of all kitchen appliances, cabinets, counters, bath vanity, cabinets, light fixtures, fans, water heater and Hvac.

    If you do not have access to information regarding the condition of the interior, you cannot accept the assignment unless you intend to deliver a misleading report.
     
    Last edited: Nov 2, 2011
  5. J Grant

    J Grant Elite Member

    465
    Dec 9, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    Is there a property manager, somebody recently who has been inside? An agent, anybody? In cases of an REO I agree with the others...though you can use an EA of average condition and no adverse conditions, and I suppose the report would be true if the condition turns out otherwise, that your report was not misleading since it was disclosed that the EA was for average condition, I think if you want to derive a true MV and what repairs are needed, you need some idea of condition, if ther eis mold present, leaks etc. Many times ext condition does correlate to a reaonable average of even good int condition, I would not want to rely on that.
     
  6. 23Degrees

    23Degrees Senior Member

    6
    Jan 31, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    post 4 is correct if you are using the 2055. This use of EAs without CB4 has the potential to seriously blow up in our faces. Fannie or any other user could and maybe will have a field day over the constant misuse of this format.
     
  7. Carnivore

    Carnivore Elite Member

    5
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    SO the property must be occupied?

    Otherwise Why in the world would anyone want you to do a 2055 REO?
     
  8. NorthTexValuation

    NorthTexValuation Senior Member

    0
    Sep 17, 2011
    Professional Status:
    Certified Residential Appraiser
    State:
    Texas
    I'll bet it's because they want to pay a lower fee for the report.
     
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