Request to Remove Addition from Appraisal

[MKBURNETT]

It is just a phone call to verify permits? I do it all the time, call early in the morning. If it is less than 10 years they give it to you on the phone in San Diego, I bet they do that there too.
Owner obviously should have had his papers but if he stated it is permitted, call. You just ask- Is there any permits for the last 10 years or so. Don't say for the added room, let them tell you just in case it isn't permitted.

 

[Lee Lansford]

Oh really... can the next appraiser that gets turned into you for not verifying things just use the excuse "it's not my job."

The scope of work is acceptable when it meets or exceeds:
* the expectations of parties who are regularly intended users for similar assignments; and
* what an appraiser’s peers’ actions would be in performing the same or a similar
assignment.

If other appraisers (peers) are verifying permits in the OC, or SoCal, I believe they should verify permits. I do believe that most appraisers do their best to verify permits in SoCal....

As for ignoring the contributory value/or decline in value because of the addition... I would tell the U/W... no can do...for I would not want my appraisal report to be misleading....

Just wondering:

If the subject has a deck, are you verifying that the deck is legally permitted?

 

[Mike Garrett RAA]

We have discussed this numerous times and the consensus is...

We are not the permit police! That said...

You should report what you see. The improvements are what they are. Value the property in it's "as-is" condition. What would a buyer do? If that is buy it because it has zzz square footage then that is what the value is. If you know the addition was done without permits include that information in your report.

 

[Mike Kennedy]

The underwriter asked that I remove the added room

I.E. the underwriter asked that you lie.

Form your own conclusion. Mine is ABSOLUTELY not.

In OP, the owner reported a permit had been obtained, in most munis a permit allows construction under Code; a required Certificate of Compliance or Occupancy confirms that, according to the Municipality, the addition (or other new construction which required a BP) was completed in a code-compliant manner posing no health or safety issues.

Options: if available during the normal course of business, confirmation of either the BP or ensuing CC / CO is required (from the owner, muni OR the lender).

if NOT available during the normal course of business (i.e. due diligence), EITHER of the two tools below are appropriate while ACCURATELY describing the existing improvements as of the EDA.

Either the Site Improvements "as-is" on the EDA were Legal, Legal Nonconforming, or Illegal. Select the correct tool and insert the appropriate Definition below and place the onus on the OWNER to produce the required Docs to the Lender.

p.s. [FONT=&quot]Under an Extraordinary Assumption you believe the premise to be true, but if found not to be true could cause you to change your value opinion.

Under a Hypothetical Condition the premise is known to be false... but assumed true for the purpose of the appraisal.

also see recent thread discussion http://appraisersforum.com/showpost.php?p=2109364&postcount=44
[/FONT]

 

[Mike Kennedy]

Just wondering:

If the subject has a deck, are you verifying that the deck is legally permitted?

In my markets the information is readily available during the normal course of business, verification meets the Clients expectations. Yes.

Other solutions, in markets where building and zoning ordinances (local laws) exist, are in the post above this one.

 

[Mike Garrett RAA]

IN MY MARKET an appraiser can check for permits on line which really makes it easy look up.

 

[Elliott]

Doesn't it seem weird that UWs are suddenly picking up on loan killer stips more and
more? Its like AMCs are rewarded for screwing up the appraisal. Could that be?

In my market, you call, you get a message they are too busy to answer your call and to leave a voice mail,
and then they don't call you back.

 

[Corbyn Reece]

The consensus is that the added GLA is not permitted.

U/W today: "Why would you not be able to appraise it "as is" I just need to know what the value would be at the original square footage" And "most likely the addition is the room at the back"

I explained that "as is" isn't what she's asking for and that while I agree that it's likely the room at the back, I cannot state as fact something that's merely an educated guess

I said to request in writing that I appraise the property at zzz GLA or without that back room, but it is a hypothetical, a new appraisal assignment (since it's a "different" property) and likely doesn't match what the purchase contract is buying

 

[Lost Cause]

It's especially troubling that the underwriter is so terribly confused about what "as is" means. "As is" is not a difficult concept and doesn't seem like it should be the least bit confusing.


Hmmm, it all depends on what "as is" is. Perhaps she's related to Bill Clinton? Joke aside, this is a serious problem...

 

[Corbyn Reece]

Another reply from underwriter, paraphrasing:

"other appraisers have mentioned unpermitted additions and not included the square footage or value in their appraisals. That way they are NOT ignoring the addition nor are they giving it any value. This is common practice and I have not had any issues with appraisers understanding this"

I'd tell her where to stick it and/or talk to her supervisor, but this is an important client. Thinking about my next move . . .