1004D Recert: Renovation in Progress

[ZZGAMAZZ]

The original appraisal was of a very complex 5000 sf SFR with a 4000 sf detatched builiding with 2 rental units and a 2000 sf RV Garage.

Now four months later the 1004D Re-cert arrives, although I don't know why now after so long because it doesn't seem that the refi could be on hold that long.

Anyhow, my visit today reveals major work in progress of an interior renovation of the Main Dwelling Unit.

Questions:

Q: Does the typical SoW include an analysis of market reactio on the 1004D Effective Date compared to the original OV?

Q: Should I notify the lender and ask whether an As Is value is needed, or can the 1004D Re-cert be conducted "Subject To" completion of the renovation?

[Caveat is that the original appraisal required some comps from 12 months back, although I will not use any comps that went under contract prior to the original Effectdie Date--although my first search criteria will be to determine the current status of two pending sales in the 1004. However, there might not be ANY recent activity because of the subject and the market complexity].

Thanks, peers.

 

[Dublin ohio]

Now four months later the 1004D Re-cert arrive

Do you mean a 1004D update?

 

[Surf Cat]

The original appraisal was of a very complex 5000 sf SFR with a 4000 sf detatched builiding with 2 rental units and a 2000 sf RV Garage.

Did you make the OA subject to completion or as Dub asked is this an update?

 

[Mike Ault]

[Caveat is that the original appraisal required some comps from 12 months back, although I will not use any comps that went under contract prior to the original Effectdie Date--although my first search criteria will be to determine the current status of two pending sales in the 1004. However, there might not be ANY recent activity because of the subject and the market complexity].

Thanks, peers.

Just use the best comparables. No need to limit yourself to comparables which went under contract after the original effective date. Apply market change adjustments as warranted. Notify your client about the ongoing renovation, and tell them an interior re-inspection will be required to determine market reaction to the same. Also make sure and tell them that your 1004D update will be stuffed full of pictures depicting all incomplete work in progress, should they care to proceed with it. They can decide whether they want an as is value, as repaired value, or both. Bill appropriately for the additional research required.

 

[Zoe]

You or somebody already gave them a value as of effective date. If they want a value 4 months later with new effective date of appraisal, they may just need to order a new appraisal instead of 1004D.

 

[ZZGAMAZZ]

Did you make the OA subject to completion or as Dub asked is this an update?

There was nothing going on [no work in progress] when I conducted the original appraisal.

 

[ZZGAMAZZ]

What are you suggesting I do? Ask them why the 1004D is being ordered?

 

[ZZGAMAZZ]

Did you make the OA subject to completion or as Dub asked is this an update?

No reason to any type of commentary because no work in progress was pending or in-progress on the original Effective Date.

 

[Zoe]

There was nothing going on [no work in progress] when I conducted the original appraisal.

Okay. You don't need to update the value then on the 1004D. Just go back and see if work has been completed. You did original appraisal subject to the repairs. Your not giving an updated valuation as of today. Your just verifying the repairs have been completed. Check the lower box on 1004D.. Don't put date on signature page for updated value and don't check the upper box for summary appraisal update.

If you check that upper box for summary appraisal update, you are basically doing a new appraisal with a new effective date. Either that or you are still confirming your original value opinion. I would want a new appraisal assignment and start over.

 

[ZZGAMAZZ]

Okay. You don't need to update the value then on the 1004D. Just go back and see if work has been completed. You did original appraisal subject to the repairs.

No No No. There was no work-in-progress on the original Effective Date.