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Need a Little Help In CA

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by cwhalstead, Mar 13, 2009.

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  1. cwhalstead

    cwhalstead New Member

    0
    Mar 5, 2007
    Professional Status:
    Licensed Appraiser
    State:
    California

    Hello,

    I am putting together a limited appraisal report. I have never done one so I do not know what forms to include in my report. Can anyone help me by telling me which ones to include? Are there optional pages you can include in a limited appraisal report, for instance: a sketch, comments page (if needed)?

    Thank you
    :new_smile-l:
    Struggling to Survive
     
  2. Randolph Kinney

    Randolph Kinney Elite Member
    Gold Supporting Member

    32
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    What are your client's requirements? Is your client a lender and is this for a mortgage finance transaction? Is this a full interior / exterior inspection?

    You will get more information if you describe what your assignment conditions are.
     
  3. cwhalstead

    cwhalstead New Member

    0
    Mar 5, 2007
    Professional Status:
    Licensed Appraiser
    State:
    California
    More Information.

    The purpose of this Limited Appraisal would be for an investor who wants an estimate of what a residential property would sell for after it is rehabbed (paint, floor and window coverings, remodeled kitchen and bathrooms). So it would be a case of estimating present value of home then adding the value any series/combination of improvements would make to it.

    Full interior/exterior inspection. No lender requirements. This is not for financing of anykind. End user is an investor. Report will not be used by anyone else.

    Thanks:clapping:
     
    Last edited: Mar 13, 2009
  4. Randolph Kinney

    Randolph Kinney Elite Member
    Gold Supporting Member

    32
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    The term limited is no longer used in USPAP, which meant that an appraisal approach that was applicable was not done.

    Do you mean a restricted use report?

    It sounds like to me that your investor is interested in the hypothetical value subject to the repairs and alterations or improvement per plans and specifications. I would use the GPAR 1004 form with sketch, interior photos, exterior photos, property profile, etc.

    Is your subject property offered for sale or does the investor own it?
     
  5. cwhalstead

    cwhalstead New Member

    0
    Mar 5, 2007
    Professional Status:
    Licensed Appraiser
    State:
    California
    More Information.

    It is quite possible I don't know what I am talking considering I haven't done one of these. So it is quite possible it is a restricted report. The reason I was calling it limited was because in comparison to a full URAR 1004 Conventional Report this would be considered limited.

    I do believe you have it right when you say, "It sounds like to me that your investor is interested in the hypothetical value subject to the repairs and alterations or improvement per plans and specifications." I thing you hit the nail on the head...! That is exactly it.

    This is an existing property? It will be an interior and exterior inspection. The investor owns the property... just bought at auction but is going to fix up and sell it. It is currently NOT offered for sale. Thanks for your continue questions and help... I do appreciate it.:)

    Thank you Randolf for staying with me on this... I do need help.
     
    Last edited: Mar 13, 2009
  6. Randolph Kinney

    Randolph Kinney Elite Member
    Gold Supporting Member

    32
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Well then, you don't need the cost approach or income approach, unless your client makes that as part of the SOW (scope of work).

    You do need the plans and specifications and that should be included as part of your appraisal so when you check box subject to (not the as-is box), everyone knows what is should be on completion.

    All you do is find comparable properties that are the same as the subject would be as if it were already rehab to determine market value.

    Be sure to state the intended use and purpose, with the intended user. A Fannie form will not do. You need the General Purpose Appraisal Report (GPAR) form 1004. ACI or WinTotal have that.

    What you have will be a summary appraisal report, not restricted use report.
     
  7. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    135
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    Doesn't exist anymore.

    A restricted report is defined by Std. 2 and I suggest you read it. I have a "Restricted" report format in my software, but I never use it. I would use a Summary report unless they object. And you need to define the scope of work which will set the tone of what the report needs to include. If you insist upon the "restricted' format remember your workfile must contain sufficient material to prepare at least a summary report. Same work, shorter report...try some sort of one/two page "summary" report is my suggestion.
     
  8. Couch Potato

    Couch Potato Elite Member

    0
    Mar 15, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    I do hope you discussed your lack of competence and you plan to become competent with your client.

    Your report will like be much like a new construction appraisal. You will want to appraise it as it will be, not as it is. You will want to be very detailed in your description of the improvements, both as they currently exist and as they will be. A sketch, or two sketches in the case of additions or alterations to the property, is a good idea. I do not recommend a Restricted Use report for this type of assignment. You need all the stuff in your work file anyway; go ahed and put it in the report. Your client will likely show the report to potential buyers even if it is a Restricted Use report. You never know what a judge would say if a buyer was misled by the report and sued you.

    Such a report needs to be more detailed than a typical lending report.
     
  9. leelansford

    leelansford Elite Member

    24
    Mar 29, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois

    As to the MINIMUM reporting requirements for a Restricted Use Appraisal Report, open your copy of the USPAP to Standards Rule 2-2 (c), pages U-26 through U-28.

    Keep this thought in mind if you opt for Restricted Use vs. Summary: In a Restricted Use Report, your workfile must be made available for the client if the client requests it.
     
  10. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    135
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    Not so. You may need to do a complete appraisal...but the report depends upon the needs of the client. The appraisal, not the report, needs typically to be more focused upon the purpose of the assignment and that could be MORE or LESS detailed... If someone merely wants to know the max to bid on a property, the SOW could be fairly short. If they need an accurate value for taxable purposes, the appraisal needs to be more detailed regardless how bare bones the report is.
    report ≠ appraisal
     
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