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Old 02-24-2006, 09:03 AM
Workbox's Avatar
Workbox Workbox is offline
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Location: The Rockies
State: Colorado
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Default As-is and Rehab value on one report?

The LO indicates that they need and as-is market value and proposed rehab market value, but wants it on one report. I had told him that would be two appraisals, and I have always done it that way before. He told me that the processor has had her other appraiser do it that way. Two values in one report. I think I am missing something.
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Old 02-24-2006, 09:50 AM
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Webbed Feet Webbed Feet is offline
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Mr. Torres,

If you consider, the "appraisal" is the opinion of value backed by the relative work file and research. The "report" is only the communication of the extent of the development and results of the appraisal. So why cannot any appraiser communicate two appraisals, or multiple values from scope of work requirements, in one report? ... Actually, we do this all the time when opining land value as part of an assignment to appraise an improved property.

However, it's more likely you recognize the correct methods and USPAP requirements to meet the request, when many other appraisers do not and proceed to toss a few extra values around with no support, no research, and no basis for them... the pull it out of your ass method to quick turn times and low fees. Or quick turn times and high fees.. LOL.

Barry Dayton
Old 02-24-2006, 10:00 AM
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Lobo Fan Lobo Fan is offline
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I checked with the appraisal board and they said it was OK to have two values in one report. Just make sure which value they want in the grid. It will likely be the rehab value which I put in the repair addendum.
Old 02-24-2006, 10:12 AM
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Mr Rex Mr Rex is offline
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I have done this before, but contrary to Chucks statement about the grid. I gridded 3 comps As-Is, 3 in Similar As-Repaired condition. Charged 1.5 times typical.
Old 02-24-2006, 10:26 AM
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Josh Shapiro Josh Shapiro is offline
Join Date: Jan 2006
Location: Central Florida
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I too have done this. I completed the appraisal REPORT as-is but noted the rehab value as well. I stated the work file for the rehab value is included with the work file for the as-is value. Just make sure you note that the rehab value is subject to. Make sure you charge them for 2 appraisals!
Old 02-24-2006, 04:19 PM
Jim Buckner Jim Buckner is offline
Join Date: Dec 2004
State: Arkansas
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Default two values - one report

Just quoted a fee today on a similar situation. Client wants AS IS value on an apt. complex and also AS REPAIRED value. I requested a detailed list of the proposed renovations. As long as you cover everything in your scope of work and adequately explain what you are doing in the report there should be no problem. We will be doing a narrative report which will I think would be better than a form report for offering two values.
Old 02-25-2006, 10:03 AM
xm39hnu xm39hnu is offline
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State: Florida
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Two values on one report??? How about four?

This is routinely done on REO appraisals. The client wants as-is and as-repaired values considering a normal market time, and as-is and as-repaired values considering a market time of 90-120 days.

Not all that unusual, IMO.
Old 02-25-2006, 10:38 AM
Brad Ellis Brad Ellis is offline
Join Date: Feb 2006
State: California
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Jim Plante is absolutely correct. There is no prohibition against 2 or more value opinions in one report. Just look at the Fannie REO addendum and you will see lines for 4 values- as is, as repaired, as is under a reduced exposure time and as repaired under that same reduced exposure time.

First, make sure you communicate totally with your client so you are certain of what values they want. If they are not sure, use that REO addendum and give it all to them- it is the normal and usual request.

Also understand that you are realy solving for these values as different types of value- the first 2 being market value and the last two as more of a liquidation value. You should define that sort of value in an addendum.

And, as Barry says, derive that from market data and do not just wing it. It is not usually an enormous problem to find these as is deals and as repaired deals in the market. If you do not want to grid out all of them, just use a narrative part of your addendum to expalin the relationship in your market for properties sold as is and those sold as repaired- and watch out for flips.

Old 02-25-2006, 11:25 AM
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Mister Ed Mister Ed is offline
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The only other thing that I would add is this: That the "as repaired" value is subject to change depending on the quality of repairs, time it takes to complete the repairs and shifts in the market during that time frame.

A good quality repair/remodel will definitely bring more value than one that is done in a "half-assed cut as many corners as you can" approach. I have seen both.
Old 02-25-2006, 11:29 AM
xm39hnu xm39hnu is offline
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Brad's admonition about watching out for flips goes hand-in-glove with Ed's comment about the quality of repairs. Many times, flips give a good indication of as-is value, because run-down properties are a prime target for flippers. But do be aware of the difference between a good rehab job and the "slap a coat of paint on and bump the price $20K" type. Takes a little research and digging, but you can find out. After a while, the names of the parties will help you to accept or discard a sale. Comment appropriately when you use that for a reason, though.
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