1004D completion on report from 12+ months ago

[Tacoman]

Hi hoping someone has run into this. I got a 1004D completion assignment for an original appraisal I did from early 2021! So now we're pushing nearly 2 years.

I reviewed Fannie Mae rules regarding Appraisal Updates and I know for an update, they'd need a new appraisal. But this is only a completion and from what I can see, there is no time limit for a completion. (Just as some background--I don't have all the details but from what I understand, it took 7 months just to get a plumber lined up and they started late)

It's a little nervewracking since they share the same form but it does say Update and/or Completion. I think the time limit does not apply on its face.

The real issue I'm wrestling with is the homeowner is doing major work in the kitchen now. The checkbox on the form says Have the improvements been completed in accordance with the requirements and conditions stated in the original appraisal report? If no, describe any impact on the opinion of market value.

The required work originally specified is done. But you could argue that the IMPLIED (not STATED) conditions of the original have changed. In other words, the improvement was completed but not in accordance with the original conditions which would be "the rest of the house is at least as good as pictured." I want to check yes, and then note that new work is in progress, the original conditions have changed but a new appraisal is required to determine any impact on value.

EDIT: Also as I think about how these forms are notoriously poorly written, could "conditions stated" mean something else? Could it be C3, for example? Well, as-is, it's not a C3 anymore, it's C4 (kitchen is still functional, just a missing wall that is not patched up). Does condition refer only to "the condition that the bathroom be completed?" Does it apply to everything? Imagine an extreme hypothetical situation where you went to make sure a bathroom was done but the rest of the house was missing.

Has anyone dealt with this situation? What did you do?

 

[Terrel L. Shields]

I got a 1004D completion assignment .... is doing major work in the kitchen now

No, the improvements are not complete according to plans and specs.
No, you are only asked about completion, not value - so that section remains blank....except....
Construction time is long delayed and I presume you made some estimate of the time to complete but comment that it was delayed is not necessary. But since the form wants a comment on the value change, you are stuck with that task.

Only if they ask you about value does the appraiser have to basically determine if the property is worth more or less. And you have the dual problem of determining the increase in prices, and perhaps recent decrease... i.e.- market conditions and the impact of the unfinished work which is apparently negative.

 

[J Grant]

Hi hoping someone has run into this. I got a 1004D completion assignment for an original appraisal I did from early 2021! So now we're pushing nearly 2 years.

I reviewed Fannie Mae rules regarding Appraisal Updates and I know for an update, they'd need a new appraisal. But this is only a completion and from what I can see, there is no time limit for a completion. (Just as some background--I don't have all the details but from what I understand, it took 7 months just to get a plumber lined up and they started late)

It's a little nervewracking since they share the same form but it does say Update and/or Completion. I think the time limit does not apply on its face.

The real issue I'm wrestling with is the homeowner is doing major work in the kitchen now. The checkbox on the form says Have the improvements been completed in accordance with the requirements and conditions stated in the original appraisal report? If no, describe any impact on the opinion of market value.

The required work originally specified is done. But you could argue that the IMPLIED (not STATED) conditions of the original have changed. In other words, the improvement was completed but not in accordance with the original conditions which would be "the rest of the house is at least as good as pictured." I want to check yes, and then note that new work is in progress, the original conditions have changed but a new appraisal is required to determine any impact on value.

EDIT: Also as I think about how these forms are notoriously poorly written, could "conditions stated" mean something else? Could it be C3, for example? Well, as-is, it's not a C3 anymore, it's C4 (kitchen is still functional, just a missing wall that is not patched up). Does condition refer only to the bathroom that had to be completed? Does it apply to everything?

Has anyone dealt with this situation? What did you do?

Overcomplicating the issue!

it is a completion report, so the time elapse does not matter.
Check completed as stated - your original report conditions have either been fulfilled or not , and THOSE conditions were what the value opinion was contingent on. If owner now is exceeding those conditions by adding a more upgraded kitchen, it does not affect your original value opinion but you can comment the upgraded kitchen could add more contributory value. in a new current eff date appraisal.

I am confused though - is your original condition for a completed kitchen done or not ? If the owner is in the middle of completing a kitchen then the house is not finished yet to your original specs. Butif the owner is adding more upgrades to an already finished kitchen then the house is complete..

 

[Tacoman]

Thank you, I agree with you both that it's just completion and time doesn't matter. I do tend to overcomplicate things.

I am confused though - is your original condition for a completed kitchen done or not ? If the owner is in the middle of completing a kitchen then the house is not finished yet.

The original appraisal, the house was a solid C3 with one of 3 full baths gutted. So now that bathroom is done. But when I go there, the kitchen is in the midst of being opened into the dining room (wall came down) but the work isn't finished.

 

[J Grant]

Thank you, I agree with you both that it's just completion and time doesn't matter. I do tend to overcomplicate things.

The original appraisal, the house was a solid C3 with one of 3 full baths gutted. So now that bathroom is done. But when I go there, the kitchen is in the midst of being opened into the dining room (wall came down) but the work isn't finished.

Then you have to mark it not completed and then schedule a second trip back when it is.

When you go back, your comment might be something like " The subject is completed per plans and specs of kitchen and baths finished . The current configuration has been changed by the owner to open up the dining wall to the kitchen for increased utility and appeal, which does not change the original value opinion on Jan 2021 which was contingent on the kitchen being completed."

 

[Terrel L. Shields]

The original appraisal, the house was a solid C3 with one of 3 full baths gutted. So now that bathroom is done.

So the kitchen was not part of the original repairs and the repairs for what you did are completed? In that case, the kichen is not your problem but you might want to at least comment that there are now other on-going repairs. So yes it is completed as you appraised it.

 

[Tacoman]

No, the improvements are not complete according to plans and specs.
No, you are only asked about completion, not value - so that section remains blank....except....
Construction time is long delayed and I presume you made some estimate of the time to complete but comment that it was delayed is not necessary. But since the form wants a comment on the value change, you are stuck with that task.

Only if they ask you about value does the appraiser have to basically determine if the property is worth more or less. And you have the dual problem of determining the increase in prices, and perhaps recent decrease... i.e.- market conditions and the impact of the unfinished work which is apparently negative.

I didn't include a timeline in the original report. I spoke with contractor the other day and he said he had to wait several months to get the plumber he wanted as that guy was too busy. For 2021, YOY values in this municipality were up over 10% and another 12% for 2022

So the kitchen was not part of the original repairs and the repairs for what you did are completed? In that case, the kichen is not your problem but you might want to at least comment that there are now other on-going repairs. So yes it is completed as you appraised it.

Correct. At time of 0riginal, the kitchen was just a nice 90s kitchen. Not expected to be changed and was in C3 condition.

 

[Tacoman]

Then you have to mark it not completed and then schedule a second trip back when it is.

When you go back, your comment might be something like " The subject is completed per plans and specs of kitchen and baths finished . The current configuration has been changed by the owner to open up the dining wall to the kitchen for increased utility and appeal, which does not change the original value opinion on Jan 2021 which was contingent on the kitchen being completed."

I'm sorry, I know I may have been unclear. The only original work in progress was that bathroom The kitchen was fine and no one told me anything was going to happen to it. I showed up and saw that they were upgrading it.

 

[CGinMN]

Technically by viewing the kitchen you have expanded the scope of work for the assignment, but you can't unsee it. Mark yes, add a comment that the kitchen is now under renovation. Include photos of the completed work and kitchen in your photo addendum.

 

[J Grant]

Technically by viewing the kitchen you have expanded the scope of work for the assignment, but you can't unsee it. Mark yes, add a comment that the kitchen is now under renovation. Include photos of the completed work and kitchen in your photo addendum.

Now that I know his original 1004D did not include a kitchen at all but the house had a functional kitchen, it now does not have a functional kitchen - it has a torn up half finished kitchen I assume is not functional in present state for cooking etc- at this point imo the OP should discuss it with client and see how they want him to proceed.