A Report Made 'subject To' Condition On Grid Should Be 'as Is' C5 Or In The Condition After Repairs?

[CANative]

Thanks for the replies, but I'd like to clarify, should page 1 and 2 of 1004 condition reflect the 'as is' current C5 condition, or should it be either C3 or C4 (depending upon the completed repairs) in these sections, or should the after repaired condition be written in another area (such as Final Reconciliation section) or on a separate addendum or form?

I just want it to be clear, that making this report 'Subject to' - This appraisal report is made 'subject to' the following repairs or alterations on the basis of a hypothetical condition that the repairs or alterations have been completed. Referring to the provided contractor's estimate for the complete list of repairs to be performed. Does it require the appraiser to revise the report to reflect the after repaired condition throughout the 1004, and provide the 'after repaired value', but not the current C5 condition and 'as is' value at all.

Hope this is clear, but that is what I'm trying to determine which is the proper reporting of the subject in this instance.

Thank you again for your replies on this issue.
Vic Stanions

It's the same as doing an FHA assignment where there is an MPR problem... say a giant hole in the roof which would automatically make the property condition C6. you appraise it "as though" the hole was fixed or there was a new roof on the inspection date. You would mark the condition C4 or C3 instead of C6. You would explain all this and explain it again when disclosing/describing the hypothetical condition used. You would not make "hole in the roof" adjustments to the comparable sales.

In theory this is easy.

In practice this is a royal PIA (for me at least) because they usually was just enough repairs to make the property barely C4 instead of C5. How much is enough and how much is too much?

 

[Meandering]

It's the same as doing an FHA assignment where there is an MPR problem... say a giant hole in the roof which would automatically make the property condition C6. you appraise it "as though" the hole was fixed or there was a new roof on the inspection date. You would mark the condition C4 or C3 instead of C6. You would explain all this and explain it again when disclosing/describing the hypothetical condition used. You would not make "hole in the roof" adjustments to the comparable sales.

I was waiting to see who would say hypothetical condition.




Standards Rule 2-1

(c) clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.

 

[Webbed Feet]

C3. Every word should be consistent with C3 throughout whole report.

I personally wouldn't write down anything C5 in the addendum. Not even why it's as-is C5 but subject to C3. I believe this confuses everyone. I wouldn't knock you for it, I just personally wouldn't do it.

If check subject to, I appraise 100% hypothetical. As-is doesn't even exist, so why talk about it.

An appraiser would write about the actual condition of the property in the report in order to avoid a big fat USPAP violation. When employing HCs the actual facts must be disclosed. I recommend a USPAP update for you soon.

 

[Webbed Feet]

I have an urgent question that needs to be answered by senior appraiser's on this Forum. Thanks in advance for your insight, and replies.

What I read left out of this thread is you providing, or anyone replying asking for, the scope of work of your assignment. I'd like to know why all those things you referred to were "repairs?" Many of them do not sound like repairs needed for soundness or safety, it sounds like a remodeling project.

 

[jay trotta]

What I read left out of this thread is you providing, or anyone replying asking for, the scope of work of your assignment. I'd like to know why all those things you referred to were "repairs?" Many of them do not sound like repairs needed for soundness or safety, it sounds like a remodeling project.

OP: "Note the lender/client provided appraiser with an estimate from a general contractor, (extensive list), for a total of $81,000 (which this appraisal report is relying on for 'cost estimates' for these repairs)"

Mista Feet, perhaps some New seeing eye dogs can provide assistance, I do Not see where an estimated Cost of Repairs of $81,000 is a minor repair ?

 

[J Grant]

Hopefully the OP already knows this, but if you are making it subject to C 3 in remodeled or repaired condition, your comps should be C 3 similar condition /level of upgrades.

 

[Deleted member 134708]

An appraiser would write about the actual condition of the property in the report in order to avoid a big fat USPAP violation. When employing HCs the actual facts must be disclosed. I recommend a USPAP update for you soon.

I'm not appraising the actual condition. In the checkbox section it describes what is hypothetical.

Got no problem doing it wrong if that's wrong. Will continue to do wrong, if wrong. Got zero problem.

 

[CANative]

If check subject to, I appraise 100% hypothetical. As-is doesn't even exist, so why talk about it.

See SR2-2(a)(ix):

state the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal;

 

[Mark K]

Lets take a different approach. If you are appraising a new construction home (currently vacant site) you appraise it based on the HC that's its complete. You don't compare 3 or more existing houses to a vacant lot. You compare them to what you've described from the plans and specs based on the HC that the home has been completed. New house vs. the comps, not vacant lot vs. improved comps.

The lender is correct; the subject's condition should be reflected as if the described repairs/improvements are complete, C2/C3, whatever is appropriate. And yes, somewhere in the report, you should also discuss the existing condition, as-is.

 

[Deleted member 134708]

Great Magnet works in mysterious ways.

Haven't received a 1004D from another appraiser in a year or so. Just got one. Subject to,

I looked thru whole report, the only mention of the items was in my screenshot. No where else in report. There was a picture of the water heater but it just said "water heater" and a picture of the fire door that shows it has a doggy door installed.

This cat is in serious trouble.