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MB says lender must have "as-is" checked

Discussion in 'Urgent - Help Needed' started by Robert Vetter, Mar 17, 2006.

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  1. Robert Vetter

    Robert Vetter Sophomore Member

    0
    Dec 6, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    I recently did an appraisal of a home which was missing some roof shingles (in addition to the roof being old). The owner said she has scheduled to have the roof replaced (companies are still backed up from hurricane damage last year). I marked the appraisal subject to a roof inspection based on the extraodinary assumption that the condition or deficiency does not require alteration or repair, as there was no ceiling stains or obvious water intrusion, and considered the age of the roof in the estimate of effective age of the improvements. The MB says the lender will not loan unless the appraisal is marked "as-is". How would you handle this?
     
  2. Ultraviolet

    Ultraviolet Senior Member

    0
    Dec 31, 2002
    Professional Status:
    Retired Appraiser
    State:
    Arizona
    Let me try ...

    Since I had a similar question and got good advice here, let me see if I learned anything! :)

    I think you did the right thing and should not change your report. How can you know the extent of the roof damage without an inspection report? Would the owner schedule a roof replacement if it had much life left?

    Send a copy of this attached memo, also courtesy of a generous forumite (probably Otis) :)

    Item #5 spells it out pretty clearly. Sounds like a MB problem to me. It is the lender's responsibility to have the inspection performed to clear the condition.
     
    Last edited: Aug 25, 2006
  3. Ms. Janet

    Ms. Janet Elite Member
    Gold Supporting Member

    51
    Oct 27, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    Robert,
    If you check box 4, the appraisal is an "as is" appraisal ..............as long as the inspection comes back without requiring repairs, etc.
    No further action needed by you if the inspection is ok..............
     
  4. Ross (CO)

    Ross (CO) Senior Member

    0
    Jan 17, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    A comment from an intermediary client and stating that "the lender will not loan" is not necessarily your emergency......nor fault. There is little doubt that issues with a roof, and/or the foundation, are two very sincere elements about a property where additional measures of assurance may need to be secured. It is surely incumbent upon the appraiser to not over-react while at the same time also be adequately knowledgable in what observed aspects of either of those are worthy of "another professional's comment, opinion or advice". Assess the situation well, describe in-text and show with extra photos, and then make the appropriate check box designation which allows your client their opportunity for SHARED RESPONSIBILITY in providing a secure loan file (which includes YOUR report) to Fannie Mae......assuming that Fannie's new form has been used by you here. Has it ? Let the check boxes do your "assuming" for you. Your immediate client knows that such is the way things have evolved since Nov. 1st.

    In that end, however, don't worry........the new version of the Selling Guide will be out soon and clarify all of this for everyone !

    On another thread there is discussion about one's need to adhere to a "cost-to-cure" issue and how easy it is to fall into that proverbial client-trap simply because we observe a property that is not absolutely "perfect". We describe conditions, compare with like properties, show evidentiary photos when needed and reconcile things with our decision to adjust relating to conditions and effective ages. Clients do not generally demand that their borrowers actually MAKE (all) repairs before a deal has closed.......and as time rolls along those things will be different (worse ?) in the future, anyway. So much for costing-a-cure today !
     
  5. Richard Carlsen

    Richard Carlsen Elite Member

    0
    Jan 15, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Michigan
    So change the box to "as is" and reduce the value opinion to reflect the market value of the property with the shingles missing.

    Tell the MB he can have it either way but not both.

    You got yourself into this by making the report "subject to" when there was no reason. Put down that there are shingles missing, adjust for it in the condition line and let the UW tell the HO to get the roof fixed. You are not the fixer dictator unless the assignment told you to do so (which I'll bet you dollars against dough-nuts it did not).
     
  6. Denis DeSaix

    Denis DeSaix Elite Member

    306
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    Robert-

    Welcome to the forum.

    Are you a roofing contractor? Did you climb up on the roof and look underneath the shingles/tiles? No? Of course not, I’m not a roofer and I wouldn’t do that either.

    You did the right thing; From Fannie’s selling guide:

    XI, 405.09: Property Condition (07/30/04)
    Based on the factual data of the improvement analysis, the appraiser must express an opinion on the appraisal report form about the condition of the improvements. We expect that appraisals based on an interior and exterior inspection will include a complete visual inspection of the accessible areas of the property. The appraiser is not responsible for hidden or unapparent conditions. The appraiser must report any condition that may affect the value or marketability of the subject property in factual, specific terms. The appraiser also is responsible for noting in the appraisal report any adverse conditions (such as, but not limited to, needed repairs; deterioration; the presence of hazardous wastes, toxic substances, or adverse environmental conditions; etc.) that were apparent during the inspection of the property or that he or she became aware of during the research involved in performing the appraisal. The appraiser must report detrimental conditions of the improvements even if the conditions also are typical for competing properties. For instance, the appraiser should note if a property is characterized by deferred maintenance or a lack of updating even if the same condition applies to competing properties in the neighborhood.

    And…..

    The appraiser must identify physical deficiencies that could affect the soundness, structural integrity, or livability of the property as part of the appraiser’s description of the physical condition of the property. These may include cracks or settlement in the foundation, water seepage, active roof leaks, curled or cupped roof shingles, inadequate electrical service or plumbing fixtures, etc. When such deficiencies exist or improvements are incomplete, the property must be appraised subject to completion of the specific alterations or repairs. In situations where a condition may need repair but the appraiser may not be qualified to make that decision, the appraiser must appraise the property subject to a satisfactory inspection by a qualified professional. In such cases, the lender must have the property inspected and any material conditions repaired before it delivers the mortgage loan to us. The appraiser may be asked to revise his or her appraisal based upon the results of the inspection, in which case the appraiser would incorporate the results of the inspection and measure the impact, if any on the appraiser’s final opinion of value.


    Tell the MB he/she has the following choices:
    • Lobby Fannie to change their guidelines.
    • Take accept the report on the old form, where you can make the EA that no adverse roof damage exists.
    • Go back to selling cars.
    • Get Richard C. to do the appraisal! :new_rofl: (just kidding, Richard!)
     
  7. CANative

    CANative Elite Member

    369
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Richard...

    Have you priced donuts lately?
     
  8. Kevin Mc

    Kevin Mc Elite Member

    0
    Jun 7, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    Make the appraisal "as-is"....

    and leave all comments about the condition of the roof in the report. You are not an engineer/home inspector. Just leave in the report everything you observed, let it reflect in your adjustments if need be and tell the mortgage broker OK, he/she can have it "as-is". That should keep em happy for a few minutes...LOL
     
  9. Richard Carlsen

    Richard Carlsen Elite Member

    0
    Jan 15, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Michigan


    And that is what I do. The condition of the property is reported in detail in the report, problems are identified but I do not attempt to assume that even after 31+ years in the real estate business hold myself out as capable of estimating remodeling, renovations or repairs of deficiencies. If the UW wants it fixed, they can call for it and require estimates of the costs. I am not qualified to determine the extent of the necessary repairs or the cost. Where I do this and provide a cost to cure, there is a big caveat disclaimer. If the client insists on costs to cure, then the report is conditioned on cost to cure from qualified licensed contractors in that field. I have one right now where an addition is 72% estimated complete and the client wants the cost to cure the remainder of the work. If they want a number, it will come from a contractor and not the appraiser because I am not qualified.
     
  10. Marcia Langley

    Marcia Langley Senior Member

    0
    Aug 26, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Missouri
    Ditto Denis. Fannie specifically mentions damaged shingles as needing CB4.

    CB4 involves an as is estimate of value subject to change if unapparent adverse condition is found to exist.
     
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