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203 K Subject To And As Is

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App601

Junior Member
Joined
Sep 7, 2014
Professional Status
Certified General Appraiser
State
Puerto Rico
This was previously discussed back in 2009 However I need to clarify which forms to use
There is a 203K repairs list
Is it possible to use 2 of these forms
The first one to include the "basic" repairs needed to make the property qualify
With these numbers it is easier to estimate a value As Is

And another to include the additional improvements

Please let me know your opinion
 

Flakey

Senior Member
Gold Supporting Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
South Carolina
Every 203K I've ever done was based on an estimate of proposed repairs, and cost, provided at the time the assignment was accepted subject to a final inspection. Any changes to the estimate required a revision to the report.
 

App601

Junior Member
Joined
Sep 7, 2014
Professional Status
Certified General Appraiser
State
Puerto Rico
Every 203K I've ever done was based on an estimate of proposed repairs, and cost, provided at the time the assignment was accepted subject to a final inspection. Any changes to the estimate required a revision to the report.
And how do you estimate the value As Is?
Lets put an example that the house has basic kitchen cabinets that are functional and there is no need to change them but the client wants new ones with granite or quartz tops that cost $20,000. That would be the only repair needed to make things simple

You can not subtract $20K from the opinion of value obtained and say that, that would be the value As Is?
 

Rob Frazier

Sophomore Member
Joined
Jul 6, 2005
Professional Status
Certified General Appraiser
State
Maryland
203K requires a value as if completed. 203K consultant provides the work write up and then the appraiser uses that to validate work needed (make sure it does not miss something that needs repairs to meet MPS/MPR) and then provides the hypothetical appraisal. Recent changes implemented mean that most of the time, lender does not need an AS IS value. if they do, its a separate assignment and you would follow the steps to perform that work. FHA DOES NOT ask appraiser to "provide an as is value in the addendum" because it would be difficult to meet USPAP without a whole different appraisal. Some lenders may ask you for this, tell them its a separate assignment. They can call the HOC or read the 4000.1 to see the instructions.
 

Kitarkus

Junior Member
Joined
Nov 15, 2006
Professional Status
Certified Residential Appraiser
State
Kansas
This was previously discussed back in 2009 However I need to clarify which forms to use
There is a 203K repairs list
Is it possible to use 2 of these forms
The first one to include the "basic" repairs needed to make the property qualify
With these numbers it is easier to estimate a value As Is

And another to include the additional improvements

Please let me know your opinion

I haven't read your LOE....but where/why are you searching for an as-is value for a 203K? Every 203K that I have completed is a per plans/specs subject to completion analysis.

Unless I have an REO addendum related assignment, I do not include multiple value types in a single report. Despite what Clients ask/tell me, I tend to shy away from completing multiple assignments within a single assignment :) For that matter, I have some problems with the REO addendum which turns one assignment into several....and typically without a commensurate fee.
 

Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
4000.1 starts on page 376...

(ii) Properties Acquired Less Than 12 Months Prior to the Case Assignment Date


For properties acquired by the Borrower within 12 months of the case number assignment date, an as-is appraisal must be obtained.

(b) Refinance Transactions
(i) Properties Acquired Greater Than or Equal to 12 Months Prior to the Case Assignment Date

The Mortgagee must obtain an as-is appraisal to determine the Adjusted As-Is Value when the existing debt on the Property plus the following items exceeds the After Improved Value:
 Financeable Repairs and Improvement Costs;
 Financeable Mortgage Fees;
 Financeable Contingency Reserves; and
 Financeable Mortgage Payment Reserves (for Standard 203(k) only).
When an appraisal is obtained, the Adjusted As-Is Value is the As-Is Property Value.
 
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