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1004d & Cost To Cure

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DJBanas

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Pennsylvania
I performed a final inspection on a new construction attached townhouse the other day. The project is about 60% complete.

Despite assurances from the sales office that the unit was ready to go, when I went in I saw the walls were not even primed and not painted. hand railings were not installed although the support brackets were. There was also a hole in the master bedroom ceiling where either a hanging light or ceiling fan will be installed. A few other minor items.

Turned in the 1004d as "no" to the question if completed in accordance with the plans and specifications.

Now I am being asked to provide a "cost to cure". I was taught that on new construction you do not create a cost to cure if the improvement is not completed. I have done it that way about 5 or 6 times over my career and never had an issue.

I looked at efannie for guidance and nada. Anyone have thoughts? have I been wrong? Any supporting documentation either way? BTW, the lender's SOW only requires a cost to cure on improvements that have been previously built and a CO issued. No CO on this one yet.

Thanks in advance for any help.

Don
 

BerryAppraisals

Freshman Member
Joined
Jul 25, 2013
Professional Status
Certified Residential Appraiser
State
Michigan
When I've run into that situation in the past, I've just stated that the home was not yet completed per plan and spec. I called my client and let them know, turned in the 1004D as not complete and waited for them to send out the next completion request. It's not our fault that they ordered the 1004D when the house wasn't complete yet. But I definitely have not had to put a cost to cure for a new construction home.
 

DJBanas

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Pennsylvania
Thanks for the confirmation. Calls will be made Monday morning.
 

VolcanoLvr

Senior Member
Joined
Oct 30, 2003
Professional Status
Certified Residential Appraiser
State
Washington
This situation is the prime example of why an appraiser MUST always confirm, in advance, the exact status of a property when a 1004D Completion is requested. Make a phone call to a responsible party. And make sure the 'party' understands that "Complete" means all items totally finished and that you could move in at the time you make the inspection.
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
I performed a final inspection on a new construction attached townhouse the other day. The project is about 60% complete.

Despite assurances from the sales office that the unit was ready to go, when I went in I saw the walls were not even primed and not painted. hand railings were not installed although the support brackets were. There was also a hole in the master bedroom ceiling where either a hanging light or ceiling fan will be installed. A few other minor items.

Turned in the 1004d as "no" to the question if completed in accordance with the plans and specifications.

Now I am being asked to provide a "cost to cure". I was taught that on new construction you do not create a cost to cure if the improvement is not completed. I have done it that way about 5 or 6 times over my career and never had an issue.

I looked at efannie for guidance and nada. Anyone have thoughts? have I been wrong? Any supporting documentation either way? BTW, the lender's SOW only requires a cost to cure on improvements that have been previously built and a CO issued. No CO on this one yet.

Thanks in advance for any help.

Don
Tell them that providing a cost to cure will require an additional fee as that was not part of the original agreed upon SOW.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Just say no....not that saying no will stop them from persisting anymore than it stopped kids from smoking weed.
 

DJBanas

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Pennsylvania
This situation is the prime example of why an appraiser MUST always confirm, in advance, the exact status of a property when a 1004D Completion is requested. Make a phone call to a responsible party. And make sure the 'party' understands that "Complete" means all items totally finished and that you could move in at the time you make the inspection.

As I stated in my OP, I confirmed with the sales associate. She said everything was done. Guess we just have different definitions of "done"! Also, as I arrived, the project manager was coming out of the unit. I introduced myself and told him why I was there. He said: "Great, it's ready to go!"

BTW, the client dropped the cost to cure request. Waiting to see if I get another final order.
 
Joined
Oct 22, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
As I stated in my OP, I confirmed with the sales associate. She said everything was done. Guess we just have different definitions of "done"! Also, as I arrived, the project manager was coming out of the unit. I introduced myself and told him why I was there. He said: "Great, it's ready to go!"

BTW, the client dropped the cost to cure request. Waiting to see if I get another final order.

My red..... I've found over the years that the sales office (and builder) usually do have a different definition of "done" than we do. So I usually ask again...."Totally done....100%??....When you hand Mr Homeowner the keys you don't expect to hear another word from him?" That's when the truth comes out....
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
As TimD said, charge them. Many times they want a progress report. You have the option to turn it down, too. Anyone can go do a C2C.


Ah...I see they dropped the C2C. Another final will be on the way. :) (y)
 

AMF13

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
I hate when they say it's done and you get there and it is not.
Not even close sometimes. :leeann:

I have one now they want me to go back and see the permanent heart source is installed.
They call and ask is it OK if the wall furnace is installed, but the drywall repairs are not done?
So now I have to educate them that this is not my call it is the underwriter.
There was no blanking subject to! I care not if they freeze in winter.
I will report whatever I see, not my problem to say it's OK or not OK. :mad2:
 
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