1004D and Foundation Certificate

[Dublin ohio]

The homeowner told me while I was inspecting the property, plus there is a section on the second floor where you can feel the slope while walking across it, along with your typical drywall cracks on the interior.

That was your first mistake. Assuming "repairs" were needed without expert documentation. Should have made it subject to inspection to determine if repairs were needed. Then it would have been on the lender to make the call.

 

[sputnam]

A house can be habitable (livable and being lived in ) yet have foundation problems. The condo building in Miami that collapsed in Surfside a few years ago was habitable until the darn thing literally collapsed.

Idk what is going on with the subject - but IMO the appraisers should not make opinion statements like it is habitable ( or not), they should just state verbatim what the foundation report said -or better yet, attach it, and say "see attached foundation report." That way the appraiser is not liable for any opinions about the foundation. (IMO)

Right... which is why I specifically said... "based on the engineer's report" and that is what should be reported.... 'according to....'

 

[Zoe]

I'm being asked to complete a 1004D for a property that I inspected that needs foundation repairs. According to the foundation report, which was completed after my report, it states the it is "...generally structurally sound.", then goes on to state that 20 piers are recommended. I made my report "Subject To" Foundation Repairs, they asked for it to be "Subject To" a Foundation Certificate in a revision, so I changed it. The repairs have not been completed and they are asking me to complete the 1004D based on "...generally structurally sound." My gut says NO because the report states "Subject To" a Foundation Certificate, which we all know will not be provided until the work has been finished.

I did contact the Engineering Firm that wrote the report to get clarification on the statement "...generally structurally sound.", they basically said it means the property is habitable but there is some work needed, otherwise they would not have recommended the piers.

Is my thought process wrong when I keep telling them I will not provide the 1004D without the Foundation Certificate?

Okay, you will have to rely on the engineer's report. Don't worry about going back for inspection.

You can incorporate engineer's report in a 1004D and say you cannot certify the repairs are completed and it could alter your opinion of value if the repairs recommended by engineer are not completed as of effective date of appraisal.

Charge them for the 1004D. Foundation issues are way above your expertise. They are not above the expertise of the engineer.

 

[Zoe]

Shift that liability to the engineer. Collect on your 1004D

 

[Zoe]

Okay, on your 1004D according to your original appraisal, you would have to check "NO" and include engineer's report and explain.

If your original appraisal would have been subject to engineer's report, you could move on and check yes on 1004D. Just incorporate the engineer's report in 1004D

 

[J Grant]

Okay, on your 1004D according to your original appraisal, you would have to check "NO" and include engineer's report and explain.

If your original appraisal would have been subject to engineer's report, you could move on and check yes on 1004D. Just incorporate the engineer's report in 1004D

Exactly, and they can do so now as well. Idk why people want to take on the role of expert about piers and foundation issues - just say the 1004 D is being done per lender request and assuming the buyer is well informed about it, the 1004D is made subject to getting a foundation certificate, the foundation certificate has been performed and delivered, ( see attached exhibit of it) therefore the conditions of the 1004D is complete.


It is always a good idea to recommend an inspection be completed by any interested parties, which puts people on notice that this is their responsibility.

 

[Cob]

Exactly, and they can do so now as well. Idk why people want to take on the role of expert about piers and foundation issues - just say the 1004 D is being done per lender request and assuming the buyer is well informed about it, the 1004D is made subject to getting a foundation certificate, the foundation certificate has been performed and delivered, ( see attached exhibit of it) therefore the conditions of the 1004D is complete.


It is always a good idea to recommend an inspection be completed by any interested parties, which puts people on notice that this is their responsibility.

It's the same thing in Texas EVERY time there's a bad storm or fire, you get all of these Disaster Area Inspection requests AFTER you have already completed the appraisal, I have explained to lenders/clients that the home owner's insurance adjuster should be going to the property to look for damages, why on earth would you send the appraiser back out to the property?

 

[J Grant]

It's the same thing in Texas EVERY time there's a bad storm or fire, you get all of these Disaster Area Inspection requests AFTER you have already completed the appraisal, I have explained to lenders/clients that the home owner's insurance adjuster should be going to the property to look for damages, why on earth would you send the appraiser back out to the property?

The insurance adjuster goes for damage payout claims for an individual homeowner and their insurance policy.

The appraiser goes out to see if the collateral (house or condo) is still standing or what extent of damage it has for the lender's investment portfolio purposes.

 

[Cob]

The insurance adjuster goes for damage payout claims for an individual homeowner and their insurance policy.

The appraiser goes out to see if the collateral (house or condo) is still standing or what extent of damage it has for the lender's investment portfolio purposes.

Just like you said, "why people want to take on the role of expert about piers and foundation issues." I have the same opinion and natural disasters and property damage, to me, I am NOT an expert as to what extent of damage a property I appraised 2-3 months ago may have, as I appraised the property as of the effective date of the appraisal report and NOT what may happen 2-3 months after the appraisal report was completed, if the lender is worried about what extent of damage for investment portfolio purposes, then they should send a casualty expert out to the property and not an appraiser, in my opinion, that's not my expertise and out of my scope of work.

To many on the lending side think that appraisers are one stop shopping, they want estimates for damage, cost to cure, explain if something is dangerous or can have a negative effect, explain the dangers of drywall from China, I actually had a client want me to state in an appraisal report that an inground pool with no fence around it is completely safe and that nothing bad could possibly happen. Again, this is just my opinion, as a wise appraiser told me years ago, it's an appraiser's job to REPORT, it's the lender/clients job to make a lending decision based on what we report to them, if I go back out to a property after a disaster and there IS damage, then what? What can I do? Give them an estimate for everything I see, roof, HVAC, broken windows, busted pipes, I would just be throwing darts at a dart board, as I'm an appraiser.

 

[Surf Cat]

To many on the lending side think that appraisers are one stop shopping, they want estimates for damage, cost to cure, explain if something is dangerous or can have a negative effect, explain the dangers of drywall from China

You forgot hazard insurance for dwelling coverage via the cost approach.....