I have a funny feeling about this. I did an REO inspection in which the home is approximately 3900 sf. The home had significant deferred maintenance, a 2x2 hole in the garage roof, missing drywall (it appears the plumbing was recently done except they did not finish the drywall), damaged stucco, water damage, exposed electrical, missing floor coverings (approximately 350 yards), 1/8th inch crack on the concrete slab in one of bedrooms, two of the bathrooms were totally gutted, etc. Weathered exterior walls, peeling paint, some rotted out siding, second level balconies without hand rails, the front balcony has the same hole as the garage (garage is below the balcony), really this was one of the worst I have seen out my way.
When I called to schedule the appraisal I asked the Listing Agent what the condition is like, she said just standard paint and carpet stuff! After the inspection I called her back and said are we talking about the same house? She never called back, eventually the Asset Manager called, I told him what I saw; he said Iíve been doing this blah blah blah years, it is only going to cost $20,000. I called the client back (big bank) and asked is there anyway to get bids for this stuff, well after two weeks the bids were sent back to me, the grand total $20,425. The bids donít really address all of the repairs (just paint, electrical, plumbing, flooring) but not holes in the roof, potential water damage, basically I have a list of 15 things I observed and the bids cover half of them. I was wondering if the readers out there could share some comments that you would include in your report if you were in this situation, a CYA type thing.
When I bought a condo 8 years ago (1600 sf) we hired people to do paint, recessed lighting, flooring, carpet, some minor electrical, and some molding. That almost cost us $20,000 back then.
Either that Asset Manager knows construction costs like nobodyís business (which I am not ruling out) or I got taken to the cleaners on my condo improvements. I know times are lean for contractors and bids are really competitive but am I missing something? The other funny thing is that all of the bids were not local, in that the contractors were about 30-40 miles from the home, the bids were all generated within close proximity to the Asset Managers office.
Also when the level of repairs goes beyond the scope of the appraiserís knowledge how do you address the REO Addendum?
Thanks for the feedback.