Esox
Member
- Joined
- Apr 13, 2008
- Professional Status
- Certified Residential Appraiser
- State
- Wisconsin
I received calls today from two mortgage brokers with which we do business. This morning they were told by their lenders that due to the heavy rains and flooding here in some parts of WI they will require appraisers to return to properties appraised before 6/10/08 to certify that the property did not sustain flood damage.
I did an appraisal for one of the MBs with an effective date of 6/6/08. Since completing this appraisal, apparently the home did end up with about 1" of water in the basement, which is not uncommon here in Milwaukee and its suburbs. The appraisal was not completed until 6/12 as we were told to wait for an amendment to the offer to purchase dated 6/11/08. The amendment included a number the seller would pay for "buyer's closing costs and pre-paid items, including buyer's homeowner's insurance."
Now the MB is telling us that this amendment was actually written due to the water in the basement that resulted in the need for carpet removal. Nice that they worded it so honestly. His lender is asking us to go back to the property and state "the property was not damaged by the flood", which in this case sounds to be seepage or sewer back up as this area of Milwaukee County did not truly flood. Apparently, this is not the only lender he deals with who will be asking for this type of statement. They will accept this statement in a revised version of the appraisal, in a letter on my company's letterhead, or on a 1004D.
The lenders have changed what they want stated since this morning when they initially wanted a comment stating, "the subject property was not affected by the natural disaster nor was its value affected due to damage to surrounding areas".
I'm more than a little uncomfortable with this request. I can easily go back to the property. If it is cleaned up and wet carpeting removed, I can state that, but how do I know that there is no damage that is not visible, or that water got somewhere unseen and somewhere down the line mold begins to grow, etc.?
The other MB I talked to has a deal where he had no appraisal done, and the same lender is telling him to hire an appraiser (in this case, me) to inspect the property and make the same comment about there being no damage. This request makes me even more uncomfortable.
Of course the MBs think it's no big deal to go back and say everything is fine. These two guys are stand up, but were kind of shocked when I suggested I could be opening myself up to some pretty serious liability. They, of course, want their loans to close.
My wife found an article titled "Valuation Insights & Perspectives: Appraising after a natural disaster" authored by a Robert C. Wiley. He works for my E & O company. This article deals with similar requests appraisers in FL apparently receive after hurricanes. It has some additional language suggestions that are helpful, but again, it is somewhat specific to hurricanes, and what I am dealing with is sewer back up or seepage.
I am posting this prior to speaking with my E & O provider as I am in the office just briefly this afternoon, and wanted to find out if others here have dealt with the same thing. Rest assured, my wife will be calling our E & O provider to get their input, but I would sure love some from the experts here, as this is a new one on me.
It smacks of "put the liability on the appraiser, they thrive on more liability."
Thanks,
Kevin
I did an appraisal for one of the MBs with an effective date of 6/6/08. Since completing this appraisal, apparently the home did end up with about 1" of water in the basement, which is not uncommon here in Milwaukee and its suburbs. The appraisal was not completed until 6/12 as we were told to wait for an amendment to the offer to purchase dated 6/11/08. The amendment included a number the seller would pay for "buyer's closing costs and pre-paid items, including buyer's homeowner's insurance."
Now the MB is telling us that this amendment was actually written due to the water in the basement that resulted in the need for carpet removal. Nice that they worded it so honestly. His lender is asking us to go back to the property and state "the property was not damaged by the flood", which in this case sounds to be seepage or sewer back up as this area of Milwaukee County did not truly flood. Apparently, this is not the only lender he deals with who will be asking for this type of statement. They will accept this statement in a revised version of the appraisal, in a letter on my company's letterhead, or on a 1004D.
The lenders have changed what they want stated since this morning when they initially wanted a comment stating, "the subject property was not affected by the natural disaster nor was its value affected due to damage to surrounding areas".
I'm more than a little uncomfortable with this request. I can easily go back to the property. If it is cleaned up and wet carpeting removed, I can state that, but how do I know that there is no damage that is not visible, or that water got somewhere unseen and somewhere down the line mold begins to grow, etc.?
The other MB I talked to has a deal where he had no appraisal done, and the same lender is telling him to hire an appraiser (in this case, me) to inspect the property and make the same comment about there being no damage. This request makes me even more uncomfortable.
Of course the MBs think it's no big deal to go back and say everything is fine. These two guys are stand up, but were kind of shocked when I suggested I could be opening myself up to some pretty serious liability. They, of course, want their loans to close.
My wife found an article titled "Valuation Insights & Perspectives: Appraising after a natural disaster" authored by a Robert C. Wiley. He works for my E & O company. This article deals with similar requests appraisers in FL apparently receive after hurricanes. It has some additional language suggestions that are helpful, but again, it is somewhat specific to hurricanes, and what I am dealing with is sewer back up or seepage.
I am posting this prior to speaking with my E & O provider as I am in the office just briefly this afternoon, and wanted to find out if others here have dealt with the same thing. Rest assured, my wife will be calling our E & O provider to get their input, but I would sure love some from the experts here, as this is a new one on me.
It smacks of "put the liability on the appraiser, they thrive on more liability."
Thanks,
Kevin