Scope of work: 100% rebuild letter requested

[Zavia]

I've already stated in the report - after verbally verifying with the building department - that the subject may not be able to be rebuilt to its current footprint if destroyed (it's legally non-conforming). According to the building department, nothing more definitive could be stated without a hearing.

The lender is now requesting a 100% rebuild letter from the building department, which is beyond the appraisal's scope of work in my opinion; I've reported what was told to me by the building department and my job ends there, although if they'd like a rebuild letter included in the report, they can certainly forward it to me after obtaining it themselves and I'll be glad to scan it in for them.

Comments? Thanks in advance.

 

[Mike Seward]

I would just repeat what you said in the first paragraph above and give them the person's name and phone number.

 

[Couch Potato]

Why not do the work and charge an appropriate fee? That is how I handle requests for rebuild letters when they are requested. In this case it does seem a bit silly to request a letter from you when you have already stated it is possible it cannot be rebuilt. Did you include a copy of the applicable part of the zoning regulation in your report? That typically take care of such issues.

 

[Zavia]

Why not do the work and charge an appropriate fee? That is how I handle requests for rebuild letters when they are requested. In this case it does seem a bit silly to request a letter from you when you have already stated it is possible it cannot be rebuilt. Did you include a copy of the applicable part of the zoning regulation in your report? That typically take care of such issues.

This lender won't pay an additional fee, although if they did I would certainly provide the service for them.

As far as including the zoning info in the report, I'm being paid for my professionalism, which I do not have to prove unless requested to do so in the scope of work prior to acceptance, and which would be charged for appropriately.

I fear too many appraisers just take on these little tasks when it has not been agreed upon to do so and little by little, customary practices in the industry are born[e]. Very bad business, for appraisers anyway!

Thanks for the input!

 

[Couch Potato]

The moment I find a property is non-conforming I call the client and discuss the matter. I believe the reason the information in the Fannie Selling Guide on zoning is there in the appraisal section is so that appraisers will work with the client to obtain the needed information.

Fannie Mae Single Family
2007 Selling Guide
Part XI: Property and Appraisal Guidelines
XI, Chapter 4: Reviewing the Appraisal Report (11/01/05)
XI, 404: Site Analysis (08/24/03)
XI, 404.01: Zoning (01/31/06)

A quick read obviously shows they need a rebuild letter or a copy of the zoning regulation. Since I need the zoning regulation to do my appraisal, why not copy and paste it into the report? I think it is good business to provide the information the client needs to evaluate the collateral. I think it is good business to discuss with the client information that may alter the needed scope of work.

 

[ghrousseau]

I've already stated in the report - after verbally verifying with the building department - that the subject may not be able to be rebuilt to its current footprint if destroyed (it's legally non-conforming). According to the building department, nothing more definitive could be stated without a hearing.

The lender is now requesting a 100% rebuild letter from the building department, which is beyond the appraisal's scope of work in my opinion; I've reported what was told to me by the building department and my job ends there, although if they'd like a rebuild letter included in the report, they can certainly forward it to me after obtaining it themselves and I'll be glad to scan it in for them.

Comments? Thanks in advance.

These letters are typically only provided to the owner of record for the property. Just state what the city told you on the report and cite it as an EA on the addendum. I have 10 years time with three major banks that sell directly to Fannie and Freddie. The most they can request from you is to state what you just told us on the report. If they want the letter they can request it from the home owner or property seller if it is a purchase. Sounds like another over zealous underwriter.

 

[Lee Lansford]

I've already stated in the report - after verbally verifying with the building department - that the subject may not be able to be rebuilt to its current footprint if destroyed (it's legally non-conforming). According to the building department, nothing more definitive could be stated without a hearing.

The lender is now requesting a 100% rebuild letter from the building department, which is beyond the appraisal's scope of work in my opinion; I've reported what was told to me by the building department and my job ends there, although if they'd like a rebuild letter included in the report, they can certainly forward it to me after obtaining it themselves and I'll be glad to scan it in for them.

Comments? Thanks in advance.

Because it is not indicated within your comment and question, I have to ask:

Do any of the sold comparisons that form the basis of your opinion of value have the same (or, EXTREMELY similar) zoning status as the Subject?

If the answer is "no", how do these dissimilar (as to zoning status) sold properties measure the market's reaction to the Subject's zoning status?

Again, if your response to my first question is "no", such might be the reason why the client is requesting the "re-build letter".

 

[Couch Potato]

These letters are typically only provided to the owner of record for the property. Just state what the city told you on the report and cite it as an EA on the addendum. I have 10 years time with three major banks that sell directly to Fannie and Freddie. The most they can request from you is to state what you just told us on the report. If they want the letter they can request it from the home owner or property seller if it is a purchase. Sounds like another over zealous underwriter.

• Rebuild letters are typically provided to anyone willing to pay the fee.
• They can request what ever they want. (They don't always get what they want.)
• The underwiter is not over zealous, just aware Fannie requires either a copy of the zoning regulation stating it can be rebuilt or a rebuild letter in the file.

Do any of the sold comparisons that form the basis of your opinion of value have the same (or, EXTREMELY similar) zoning status as the Subject?

I'm sure his comparable sales are also non-conforming. After all, it is a Fannie requirement to show the effect on marketability.

 

[Lee Lansford]

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I'm sure his comparable sales are also non-conforming. After all, it is a Fannie requirement to show the effect on marketability.

CP, you ARE an optimist!

Lee

 

[Couch Potato]

CP, you ARE an optimist!

Lee

Amazingly enough that is still a true statement, although I often wonder why.