Another Foundation'problem'

[xm39hnu]

Lee Ann,
"...anything you say can and will be used against you in a court of law."

Scary stuff. But if you always tell the truth, you don't have to remember what you've said. We may have the right to remain silent, but we don't get paid if we exercise it.

My philosophy of appraisal practice is to tell'em what I saw, tell'em whether it's typical or not, tell'em I'm not an expert, tell'em what I assume (including the CYA stuff), and ... based on the above, this is my opinion of value. If it takes three pages of comments, so be it. My "A" is "C'd".

I've had a LO call for an inspection ONCE in the last three years. As a result of that INSPECTION, the loan was declined. Our appraisal didn't enter into it, except to prompt the LO to order an inspection. Kept her business, and kept out of the ensuing firefight. (Interesting thing was the LO didn't even refer the appraisal to the UW before calling for the inspection. Just up and did it, and on her own, declined the loan. She's now a vice prez.)

 

[Pamela Crowley (Florida)]

Jim,

HIGH Regards to you! Love what you wrote!!!

 

[xm39hnu]

Originally posted by Pamela Crowley (Florida)@Aug 26 2003, 10:32 AM
Jim,

HIGH Regards to you! Love what you wrote!!!

Shucks, Ma'am, 'twarn't nothin'. Besides, a lot of that stuff was your own idea.

Bet you liked the part where I get to charge more, right?

 

[Steve Forstner]

I think I've seen something similar to what you're describing. This is sometimes done around here as a retrofit. You lay down 2x4s, and (usually) put foam insulation between them and then install OSB or plywood over the 2x4s. This basically adds a layer of insulation to the slab to help with winter heating, and makes the floor a little more springy and therefore more comfortable to stand on. This is reasonably common in older homes built before insulated slabs in this area.

Steve

 

[jtrotta]

KO -LeeAnn

from the good book - 1992 FNMA

"Analyzing Improvements"; We require a clear, detailed, accurate, and comprehensive description of all improvements. You should be as specific as possible when commenting on improvements --especially with regard to necessary repairs, added features, and improvements to update or to modernize a property. You should also provide supporting material when necessary. (pge25)

Also under- "Insulation and Infiltration" ; Our guidelines require specific energy-efficient infiltration barriers:
a) there should be insulation in ceilings, roofs, attic floors above conditioned spaces, exterior walls, under floors that cover unheated area's, *around slabs, around heating or cooling ducts or around pipes that run through unconditioned spaces, *around the sill area's and around the water heater. (pge58)

a course we jus gave ya the highlites - other portions of the guidelines blend into the above, butt what the heck I can't do it all

B)

 

[jtrotta]

jim

one lil quick un; under your paragraph (3) your makin an "extraordinary assumption" - but you have pursued an extensive description of your visual; "no soft spots"; and exterior didn't note any rot; that-to me your almost crossing the expertise barrier; why not just call for an Inspection, cause everything is concelled :question: :question:

to much language can git ya inta more trouble, than a little well placed verbiage/varbiage- whatever.

B)

 

[xm39hnu]

Originally posted by jtrotta@Aug 26 2003, 08:19 PM
jim

one lil quick un; under your paragraph (3) your makin an "extraordinary assumption" - but you have pursued an extensive description of your visual; "no soft spots"; and exterior didn't note any rot; that-to me your almost crossing the expertise barrier; why not just call for an Inspection, cause everything is concelled :question: :question:

to much language can git ya inta more trouble, than a little well placed verbiage/varbiage- whatever.

B)

Down in this part of the world, telling a man what he "must" do with his property can get you summarily tossed out, and invited never to come back. We don't even have county zoning regulations, largely because of the independent and self-sufficient attitude of the population.

Now, I'm just a hired hand, engaged to appraise someone's property. If I tell the client that, as a condition of the appraisal, I will "require" him to have a $1500 structural inspection performed, he will in turn direct me to go straight to hell.

I do not have the authority to "require," "call for," or even "recommend" an inspection. I therefore observe and report in detail what I've seen, report atypicality, deny expertise, and use extraordinary assumptions in place of any "required" inspection. I can safely state "no soft spots were observed without getting into trouble. If any were observed, I would state that I don't know what effect it would have on the safety, life, or utility of the structure, and state that only an inspection by a qualified expert could accurately determine such. Followed by "This appraisal is performed under the extraordinary assumption that the life, safety and continued utility of the subject will not be adversely affected by the soft spots observed." (If a basis for such an assumption could be stated.) Another comment would be made about the effect of the "soft spots" on the subject's appeal to the market; an appraiser is qualified to comment on that.

You're right about excess verbiage having the capacity to get you into trouble; "...anything you say will be used against you in a court of law." But, let me point out that too little verbiage can as easily get you clobbered. As I see it, my choices are to either walk off the job, stating that I can't complete the appraisal without an inspection; or to make the extraordinary assumptions and impose the hypothetical conditions necessary to complete the appraisal as ordered. Besides, these things always end with the statement that if a subsequent inspection by a qualified expert discloses that the assumptions aren't true, I reserve the right to amend the opinion of value accordingly, and charge another fee for doing so.

A good place to get into trouble is with environmental issues. We did a body shop for a local bank a while back. There was a solvent tank out back, and the valve had been dripping on the ground for a couple of decades. We stated that we observed that the soil (red clay) was stained under the solvent tank; that we weren't able to determine whether the soil was contaminated; that only an inspection by a qualified environmental expert could determine whether the soil was contaminated or whether such a condition would require remediation; that we assumed that it wouldn't be, for the purpose of the appraisal; that if we were proven wrong by a subsequent environmental inspection, the opinion of value expressed therein was vacated; that a new appraisal would be necessary to evaluate the effect of any environmental issues disclosed by such an expert's inspection.

Observe, describe in detail (see your FNMA book), disclose, deny expertise, and qualify your opinion. You'll still get sued eventually. But at least your position will be defensible.

 

[Farm Gal]

*around slabs, around heating or cooling ducts or around pipes that run through unconditioned spaces, *

Thankfully we don't have to write the report...

but just curious jtortta...
Do you have a functional set of X-ray goggles? Mine broke a few years back and I have trouble seeing though solid matter to make those determinations.

So this report if 'made as instructed' would have had about a bazallion EA's and CYA's all through it and frankly wouldn't have been worth the paper on whcih it was writ!

Cause the only way to really know if it is worth anything is to find two ormore consecutive sales. and we only had one idjit ready to buy!

IF a subsequenty offer is made at the same price I think our office at least could write the report and shake our heads about the idiocy of buyers... imply that the lender might want a few inspections... and then save that sale for future reference and observation!