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  #1  
Old 09-16-2004, 01:36 PM
Dave Smith's Avatar
Dave Smith Dave Smith is offline
 
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I have started adding this wording to the Conditions of Appraisal section when there are likely to be some cost to cure issues. That is, when I am appraising a property "as is" but there are items that a lender is going to want corrected. Why should we be the ones to stick our necks out? Most of use aren't qualified to provide accurate cost quotes.
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Because the undersigned appraiser is not a building contractor or plumber he is not qualified to provide "cost to cure" quotes if they are needed. The appropriate contractors or plumbers should be contacted for quotes if they are necessary. Recommendations are available upon request.
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Old 09-16-2004, 02:20 PM
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Farm Gal Farm Gal is offline
 
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Dave:

We are as qualified or more qualified than the lenders are....

There are national cost estimators.

I always state the source of my guesstimate (noteing whether it is locally derived figures or from a cost estimator book), tell them the repair ESTIMATE was prepared on the basis of a miminally qualified visual observation of the problem, and that that hidden damages are NOT addressed at all. I make it very clear that it is my best SWAG given the scope of my "I ain't no contracter" expertise and is based on limited knowledge ... and I strongly reccomend acqusistion of actual bids by professionals.

Furhter: if discovery after inspection by qualified personell that the cost to cure exceeds my rough estimate, or uncovers additional damages, the value opinion is rendered void. A more accurate opinion can be furnished on presentation of properly prepapred estiamtes by qualified professionals.

~~~~~~

Balls in their court.

Scope, and making sure that you cover your value opinion validity and assumptions...

Your honor, I told them I wausn't no expert, and that they needed to get REAL contractors in there and that the value you are holding isn't worth using as toilet paper if I was off on my guess...

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  #3  
Old 09-16-2004, 02:28 PM
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Bobby Bucks Bobby Bucks is offline
 
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There is some good verbiage on the Supplemental REO addendum. I use a customized version of what is on that form.
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Old 09-16-2004, 02:49 PM
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Steve Owen Steve Owen is offline
 
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I use something pretty similar to what you do, Bobby. If the appraisal is ordered "as is" and there are cost to cure issues, then determining a cost to cure will probably be part of your scope of work. You cannot disclaim your way out of it if you want the assignment, but you can protect yourself with proper language.

P.S. I love your signature, Bobby. (But, paying attention to detail might just make the difference between a good appraiser and a great one :P )
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  #5  
Old 09-16-2004, 02:52 PM
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What I don't understand is why appraisers should be expected to be able to calculate what a contractor is going to charge to do remodeling or repair work!!! Let the contractor do it.

I don't have the smarts or expertise to quote the cost to replace a septic system, the cost of correcting a non conforming well, the cost of replacing a roof, the cost of doing lead paint remediation or of dealing with asbestos, etc.

There is a lot I know about a lot of things but there is even more about a lot of things I don't know. One thing I know for sure, I am not going to go out on the weak limb of providing cost to cure estimates. I am not qualified to do so, no matter how many disclaimers I put in my reports. No way, no how!!!

Quoting cost to cure is like doing free comps check and I know how to do comp checks but I won't do them either!!!
  #6  
Old 09-16-2004, 03:02 PM
Real3992004 Real3992004 is offline
 
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Estimated Repair Costs have been provided at client's request. The appraiser is not an expert in the field of building construction or engineering and actual costs may vary from those provided. Repair costs and opinion reported herein are subject to future revision based on new repair estimates and evaluations by a licensed building/plumbing/heating and cooling contractor or professional engineer.
  #7  
Old 09-16-2004, 03:22 PM
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Bobby Bucks Bobby Bucks is offline
 
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Steve when Iím working on a URAR Iím probably more anal than anyone in here; however, I can get a bit shoddy with a 2055 if I donít like the fee. :lol:

One reason I try to avoid B & C paper clients is because of the constant hassles with deferred maintenance.....they always seem to have water damage somewhere.. Iíd rather have an REO ready for a bulldozer than a stretch refi needing $1,000 worth of work.
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  #8  
Old 09-16-2004, 10:52 PM
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Quote:
Steve when Iím working on a URAR Iím probably more anal than anyone in here; however, I can get a bit shoddy with a 2055 if I donít like the fee.
Amen! Brother.

On the other hand, I'm rather fond of high risk loans (when the mb makes the borrow pay COD, that is). :lol:
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  #9  
Old 09-16-2004, 11:17 PM
Eric Bishard Eric Bishard is offline
 
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I can accurately estimate the cost to replace a roof. Pretty simple measurements and a call to a roofing contractor will do the trick. I have never done an appraisal like this, but Im assuming I could charge extra for the appraisal if I was qualified enough to make those estimates of cost to cure.
  #10  
Old 09-17-2004, 10:46 AM
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Otis Key Otis Key is offline
 
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Dave - Like Bobby said, the REO addendum has some good verbiage - if you don't have that form, then pm me with your email and I'll send one as a pdf. As appraisers, IMHO, we're providing a service, not a report, hence the HO can grumble all they want about the fee amount, just like we do over the mechanic charging us some ridiculous fee for a fuse. Anyway, like I was saying, we're providing a service and part of that is to "estimate" the cost of repairs. It's only an estimate. Scope of work and additional disclaimers should pretty much cover you and I figure out what a local handyman or contractor might roughly charge me and then increase that by about 2 to 5% - CYA.
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