New build with temporary countertops

[TerryRohrer]

an escrow hold back agreed to between a purchaser and a builder has nothing to do with whether the appraiser states home is complete or not on the 1004D. The escrow hold back is agreed to as a contract negotiation to close and usually happens before the appraiser visits for a final inspection. The appraiser visit for 1004D is for the lender, so they can say the house is complete or not and then close .

I believe Fannie et al considers a home complete it it is 98% finished ? ( will have to check tie number they specific ) They recognize a few miscellaneous items might not be finished but the house is complete as to it is finished for habitable and ready to be lived in.

These are just a series of assumptions you made up to facilitate a stupid comment. Have you ever done an appraisal of a home to be constructed per plans and specs? Do you really believe that at the outset, when the property is still being planned, the buyer and builder are negotiating on whether or not they will complete the home before closing the permanent financing...down to specifying that if the correct countertops are not available at the last step a substitute will be provided? The notion reveals a complete lack of understanding of any of what happens in these situations.

And the claim that everyone assumes the home is complete if it is 98% complete is equally delusional and contrived. Please provide the source (ie, page and date in the selling guide). The 1004D asks the appraiser to respond to whether or not the "subject to completion items" are complete. I can't find anywhere where complete is defined as "almost done."

 

[J Grant]

These are just a series of assumptions you made up to facilitate a stupid comment. Have you ever done an appraisal of a home to be constructed per plans and specs? Do you really believe that at the outset, when the property is still being planned, the buyer and builder are negotiating on whether or not they will complete the home before closing the permanent financing...down to specifying that if the correct countertops are not available at the last step a substitute will be provided? The notion reveals a complete lack of understanding of any of what happens in these situations.

And the claim that everyone assumes the home is complete if it is 98% complete is equally delusional and contrived. Please provide the source (ie, page and date in the selling guide). The 1004D asks the appraiser to respond to whether or not the "subject to completion items" are complete. I can't find anywhere where complete is defined as "almost done."

i will research it later when have time, after work hours wrt the 98% finished -
I have done many homes subject to completion

Of course the buyer and builder do not negotiate an escrow hold back on the front end. They negotiate it if at the final stage it turns out X feature can not be finished in time for the closing. Buyer agrees to close with $ for X held back in escrow to be released when X is put completed/installed..

 

[Jayjay25]

i will research it later when have time, after work hours wrt the 98% finished -
I have done many homes subject to completion

Of course the buyer and builder do not negotiate an escrow hold back on the front end. They negotiate it if at the final stage it turns out X feature can not be finished in time for the closing. Buyer agrees to close with $ for X held back in escrow to be released when X is put completed/installed..

The buyer can agree to close with an escrow but it’s the lender who is paying the builder based on the appraisal. The last new construction I appraised the buyer and the builder agreed (after the appraisal) to add a finished basement area in lieu of completing the final grade, seed, driveway and walkways. The buyer and builder were not happy when I stated the property was incomplete and the lender required them to escrow for the incomplete items (after receiving the 1004d itemizing what was incomplete). Good thing the buyer and the builder weren’t my clients.

 

[ramrcdk]

SO
in this case the pages of Posts have determined it will be a FHA/HUD Functional Kitchen = 100% complete.

In the Thread Descriptions: IT IS possible to make a Separate across the Grid "line adjustment" for the "cost-market" of the countertops, a superior adjustment found from "new construction" options spec'-"grade of the countertops". This CAN be provided BY the builder or builders of similar properties. Think of it as a Option Change...or Change Order altering the END result.
**THEN I would add an additional Sale or Pending where IF the builder is ALSO HAVING the same Supply Chain Issues for another buyer. Equates to a MV Bracketing Example on the GRID for "that line item".
THEN this would be "an AS IS" Report resulting in potentially a slightly lower "value opine" based upon the market reactions to New Construction -Market COST for the lack of countertops: QUARTZ or whatever it's found to be.
WHAT would MARKET DO? ...move in. Buyer would CYA: Put it in the Contract, Contract Addendum.

Communicate WITH the lender and perhaps this can HELP cure the issue.

THIS BUYER can't BE the only buyer having Builder-Supply Issues. My sis-in-law has just NOW received the appliances she ordered 8 months ago. AND she just found out yesterday the QUARTZ countertops she wants "may be available" in 6-9 months.
NEW Happenings these DAZE...so ADJUST and move ON!

 

[J Grant]

My understanding ( since I am not on teh lender side, but my understanding having sold RE/my own sale ) is the way escrow holdback works is the loan closes, is funded by lender, then the lender is out of the picture - the holdback escrow $ is held by an attorney or the title company. The escrow $ is released when the builder finishes the X item agreed on. Usually twice or more the cost of item is helf back as incentive to get teh builder to finish it. If builder defaults and does not finish it, the escrow $ reverts to buyer to pay to finish it.

We are not responsible for any goofy things they agree to change after a closing, which is why I said in a prior posts the appraiser should not get involved in escrow issues, those are between the buyer and builder. Either a lender accepts the 1004D as complete with a description of any unfinished or changed misc items and a cost to cure, or lender accepts it as incomplete - either way, the appraiser does not get involved with it after appraiser turns their 1004D in.

 

[J Grant]

SO
in this case the pages of Posts have determined it will be a FHA/HUD Functional Kitchen = 100% complete.

In the Thread Descriptions: IT IS possible to make a Separate across the Grid "line adjustment" for the "cost-market" of the countertops, a superior adjustment found from "new construction" options spec'-"grade of the countertops". This CAN be provided BY the builder or builders of similar properties. Think of it as a Option Change...or Change Order altering the END result.
**THEN I would add an additional Sale or Pending where IF the builder is ALSO HAVING the same Supply Chain Issues for another buyer. Equates to a MV Bracketing Example on the GRID.
THEN this would be "an AS IS" Report resulting in potentially a slightly lower "value opine" based upon the market reactions to New Construction -Market COST for the lack of countertops: QUARTZ or whatever it's found to be.

THIS BUYER can't BE the only buyer having Builder-Supply Issues. My sis-in-law has just NOW received the appliances she ordered 8 months ago. AND she just found out yesterday the QUARTZ countertops she wants "may be available" in 6-9 months.
NEW Happenings these DAZE...so ADJUST and move ON!

Exactly.
The appraiser marks complete, that house is complete and has a functional kitchen, but X misc item is not finished or X item is a lower cost installed to be replaced later by higher quality item.

Appraiser can give a cost to cure estimate, and an estimate on any impact on value.
Then it is up to the lender to fund the loan and close based on the information, or not.

Though typically there is an escrow hold back to pay for the missing items, imo the appraiser should not get involved with that, though some might choose to make a comment.

 

[ramrcdk]

Exactly.
The appraiser marks complete, that house is complete and has a functional kitchen, but X misc item is not finished or X item is a lower cost installed to be replaced later by higher quality item.

Appraiser can give a cost to cure estimate, and an estimate on any impact on value.
Then it is up to the lender to fund the loan and close based on the information, or not.

Though typically there is an escrow hold back to pay for the missing items, imo the appraiser should not get involved with that, though some might choose to make a comment.

YEP typically 2x or 3x the actual amount around here.
The entire Thread is because "lenders" have NOT recognized SUPPLY CHAIN Issues and HOW they would like to "address their issue".

Cost-to-Cure would be the Line Item on the Grid communicated within the " As - Is " Report.

 

[Dublin ohio]

Cost-to-Cure would be the Line Item on the Grid communicated within the " As - Is " Report.

So are you proposing changing the oa or doing a new report.

 

[ramrcdk]

So are you proposing changing the oa or doing a new report.

Would that not depend upon HOW the UW- lender proposes to ...continue? Their would be a Lender Request. Can't revise an Appraisal, right?
What happens in proposed construction-report completed and then time-goes-by and the Lender sends you "all of the Change Orders" that the Buyer NOW wants once he has visited the "builders home-center to choose options"? Sorta Same Thing.

 

[Jayjay25]

Exactly.
The appraiser marks complete, that house is complete and has a functional kitchen, but X misc item is not finished or X item is a lower cost installed to be replaced later by higher quality item.

Appraiser can give a cost to cure estimate, and an estimate on any impact on value.
Then it is up to the lender to fund the loan and close based on the information, or not.

Though typically there is an escrow hold back to pay for the missing items, imo the appraiser should not get involved with that, though some might choose to make a comment.

My understanding ( since I am not on teh lender side, but my understanding having sold RE/my own sale ) is the way escrow holdback works is the loan closes, is funded by lender, then the lender is out of the picture - the holdback escrow $ is held by an attorney or the title company. The escrow $ is released when the builder finishes the X item agreed on. Usually twice or more the cost of item is helf back as incentive to get teh builder to finish it. If builder defaults and does not finish it, the escrow $ reverts to buyer to pay to finish it.

We are not responsible for any goofy things they agree to change after a closing, which is why I said in a prior posts the appraiser should not get involved in escrow issues, those are between the buyer and builder. Either a lender accepts the 1004D as complete with a description of any unfinished or changed misc items and a cost to cure, or lender accepts it as incomplete - either way, the appraiser does not get involved with it after appraiser turns their 1004D in.

After the 1004d is sent in itemizing the incomplete items a majority of the lenders around here will send the appraiser out to re-inspect once 100% complete so they can release the escrow to the borrower or builder, whoever posted the funds.