Occupancy Status - Survey Says?

Discussion in 'General Appraisal Discussion' started by The Sheriff, Jul 2, 2011.

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  1. The Sheriff

    The Sheriff Member

    0
    Mar 21, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Arizona
    Individual bought a vacant parcel in 2005. In Nov 2006, an appraisal was requested by the bank based on plans and specs for the development of the parcel. Original appraiser indicated owner occupied for occupancy status. Fast forward to 2011. Review appraiser completes retro drive by with similar 2006 date for litigation purposes and indicates vacant (remember the property hasn't been constructed yet).

    I know this seems ridiculous, but I'm combing the retro with a fine tooth comb to demonstrate a lack of consistency (my client wants his arse saved). I have the URAR Appraisal Institute book referencing occupancy status, but there's nothing mentioning this type of scenario. Thanks!
     
    Last edited: Jul 2, 2011
  2. Terrel L. Shields

    Terrel L. Shields Elite Member

    41
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    It's all in the future. The argument is that the P & S were for an OWNER OCCUPIED home and therefore is was Owner....and the response to that is at the moment the house is COMPLETED the house is VACANT. In fact, virtually all the "Final Inspections" that I do are made between the final door lock being installed and the homeowner moving in.

    Neither point makes a half hitch and a hooie.
     
  3. The Sheriff

    The Sheriff Member

    0
    Mar 21, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Arizona
    The appraisal is subject to which leads my reasoning to believe the original appraiser is correct. However, what is the clear cut definition of occupancy status (does effective date trump the "subject to" use down the road)?
     
    Last edited: Jul 2, 2011
  4. The Sheriff

    The Sheriff Member

    0
    Mar 21, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Arizona
    Thanks T. for the quick response... This is a sticky appraisal and every little detail adds up.
     
  5. The Sheriff

    The Sheriff Member

    0
    Mar 21, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Arizona
    No final was ever ordered prior to the loan being secured (another reason why the bank is standing on weak legs here and my client has a glimmer of hope). The house was not built to the plans and specs (it was constructed smaller and the review is basing value on the actual size of the property, not the size reported in the original report - which included a sketch from the P & S).
     
  6. Noreen

    Noreen Senior Member

    2
    Feb 5, 2011
    Professional Status:
    Certified Residential Appraiser
    State:
    New Hampshire
    So the new construction appraisal was done as of a date with the extraordinary assumption of future completion, right? As of the date of the appraisal, the site was vacant. The floor plan submitted was part of an executed contract believed to be true and enforceable. Change to the construction documentation occurred AFTER the date of the appraisal, right? I think that proving what was available at time of the appraisal is important for you and your client, right?
     
  7. The Sheriff

    The Sheriff Member

    0
    Mar 21, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Arizona
    I agree with your statement Noreen.

    I guess the correct question is: Does occupancy status matter in this instance. T Shields says no... but my bone of contention for my client is he prepared the assignment as owner occupied (which theoretically, the review appraiser should have done as well in my opinion to follow the scope of the original assignment - she didn't though).
     
    Last edited: Jul 2, 2011
  8. Noreen

    Noreen Senior Member

    2
    Feb 5, 2011
    Professional Status:
    Certified Residential Appraiser
    State:
    New Hampshire
    A reviewer is supposed to go back and review "as if" it were the date of inspection and the information available as of that time/date, right? Not all reviewers are "created equal" so do you see any indicators that the accepted review practices were not followed? Fair is fair, we are all open to being reviewed. I maintain that the site was vacant as of the date of the inspection and that that should be the reviewer's point of beginning.
     
  9. The Sheriff

    The Sheriff Member

    0
    Mar 21, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Arizona
    These are just little sticking points that need to be addressed to demonstrate the reviewer's overall inability to follow the original appraiser's scope of work.
     
  10. Terrel L. Shields

    Terrel L. Shields Elite Member

    41
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    You cannot "review" a P & S that was not the same as the final product.... so unless the appraiser went back, rubberstamped a final without measuring and finding out the house is smaller, or noted and adjusted it accordingly... Then the review is not a review of the P & S but rather a re-appraisal of what is there now.

    I have gone back more than once to find a house finished to something besides the P & S. Once it was only the reverse floor plan when the builder realized he had a site issue and would save considerable site work by flipping the plans around. But I have seen houses 200 SF or more larger than P & S. In fact, one the builder, desperate to make a bigger margin and thinking he could build on his budget got approval for an 1,800 SF house but built one 2200SF... He run out of money and ended up in foreclosure. The bank that funded him asked for a re-appraisal. We did it. Then we did the construction inspections every week. The project was taken over by another builder who liked the house so well, he bought it himself. The bank got out with minimal damage and the builder got a good deal...I didn't do so bad myself with 2 appraisals, and 5 or 6 inspections. :) My kind of happy ending.
     
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