Another New One

[Tim Hicks (Texas)]

One of my best small time clients had me do two proposed construction appraisals back in March. Both assignments were rural properties from the same builder, but different borrowers on adjacent two acre lots. I have sales contracts in the file that include the lot and the construction cost with a sales price. Today, five months later the homes are almost done. Of course, the lender wants a re-cert (update to me) because the appraisal is over four months old and they want me to change the owner name to the borrower. They have sent me the closing statements that show they closed on the interim loan in the borrowers name, but I contend until the sales contract is satified (home is completed) the borrower is not the owner. This have never come up in 12+ years. I know what they are doing, they closed the interim and are treating the loan as a re-finance, but it seems that is not my problem. Am I too picky, should I just bite the bullet and change the owner name to the borrower since they did close the interim in their name?

 

[Pamela Crowley (Florida)]

Since this is a new assignment - new appraisal, I would use whoever is the actual owner of record at this time. Was it deeded to the new owner? Is there an actual deed recorded in the new owners name? If so, that is the owner. Sounds like they're trying to do a 2nd mtg or line of credit without paying for a new appraisal. Even the best of the LOs will try to pull fast ones.

 

[Pine Tree]

I agree w/Pam.. Just document, document! and rock on! Wendy

 

[Mountain Man]

I agree with Pam. I'd go with whoever is on record as the owner today.
As for the update.... it's for the original client, but since it's new construction, it may well be easier to just do a new appraisal. Per USPAP it's a new assignment anyway, gotta go measure it to make sure it's built to plans, new comps, etc. I'd offer a whole new appraisal at a lesser rate, but that's a business decision.

 

[Rich Hahn]

what happens when they want it owner occ rather then vacant?LOL

 

[Darrell Hignite]

Most lenders don't want an update before the house is completed, You were so right to ask for help. You got great advice too. I have done the same house three times in the past couple of years and every time, I do a new appraisal...

The question on Refi's comes up like this... I appraised the house six months ago for refi, they closed on the new loan and now they want an update of that appraisal....

Well, if they have enough money to refi every six months, a simple appraisal fee won't hurt them and chances are the comps are to old too. Besides if you don't do the appraisal, won't another appraiser charge the full fee????

Great call guys,
Happy appraising

 

[Mike Garrett RAA]

I will not change an old appraisal...period! It is what it was when I appraised it. Now, if you want a new appraisal I can do that for you, will you be paying me direct or should I collect from the home owner?