• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Appraised value of cabin not finished

Status
Not open for further replies.

upnorthdad

Thread Starter
Freshman Member
Joined
Dec 27, 2008
Professional Status
General Public
State
Wisconsin
Hi, I had my cabin appraised by a licensed appraiser because I need to buy 1/2 my wife out of the cabin because of divorce. I am not in agreement on how he came up with the final number. My cabin is about 90% finished, all mechanicals are complete etc. things that need finishing are some siding, interior doors and trim, all flooring material, closets need poles and shelves and other misc. trim throughout. Also the screened in porch is just a roof now, nothing is finished on the inside and there is no screening anyware. How he came up with the final number is he appraised it as being 100% finished and then subtracted the amount of money to finish it. My question is I thought a cabin/home was not worth 90% of the total value if it is only done at 90% because of the hassle factor and also the fact I can't refinance it because it is not done... I'm assuming if I sold it in the condition it is in that others couldn't get financing as well. BTY, all the life safety issues are finished, railings, smoke detectors etc. Any help would be greatly appreciated.
Thanks Dave
 

Steer

Junior Member
Joined
Dec 12, 2007
Professional Status
Licensed Appraiser
State
Maine
Dave,

First of all, I wish you well in your process. Divorce is a difficult thing to go through, especially if you have children together.

It sounds to me that the appraiser perfromed the job correctly. I have done many appraisals for divorce, and almost always the client (generally the attorney) wants an as-is value.

We typically provide what is called a cost to cure for unfinished items in the house. Sometimes it may differ slightly from the home owner's opinion. Most often we use a cost guide like Marshall and Swift for the breakdown of individual components. This would reflect as a reduction on the comparable sales used by the appraiser.

Lets say that it would cost $3,000 to finish the house. That $3,000 would be subtracted from the comparable sales and shown as a cost to cure.

With all due respect, most of the time I have noticed that one of the home owners in the divorce process wants a high appraisal and one wants a low appraisal. Our job is to be an unbaised reporting source for our client.

Another consideration on current values is that in many states and towns we are finding rather large decreases in value, repossessed properties that adversely effect neighborhoods, and little equity especially with newer construction. Many homes are staying on the market for a longer than usual time, and buyers are very cautious.

It is very hard to comment further on your situation based on what little I information that I have.

Could your give us some additional information?
 
Last edited:

The Warrior Monk

Moderator
Staff member
Moderator
Joined
Mar 30, 2005
Professional Status
Certified General Appraiser
State
New York
I can't speak to your specific case, but I can give some general comments.
  • Often, a property is worth less the the completed market value minus the unfinished items. Most new homeowner's don't want to buy a home and have to complete it. The "as is" value is often the "as complete" value, minus cost to complete, minus some discount due to time and aggravation. This is readily evident if you're ever seen a handman's special sell. The more work that needs to be done, bypically the larger the discount.
  • Financing - Can the property be sold with financing? In my area (which may not be true of yours), a Certificate of Occupancy is required before most lenders will finance the property via conventional lending. No conventional financing means either high rates via private financing, or a cash deal. My comments regarding this assume improving the property with a cabin is the highest and best use of the property. If not, other financing may be readily available (example: property is 100 acres in size and highest and best use is to subdivide into 50 building lots...land loan might be available).
 

upnorthdad

Thread Starter
Freshman Member
Joined
Dec 27, 2008
Professional Status
General Public
State
Wisconsin
more info.

Wow,, thanks so much for the knowledge you guys have in this business, I really appreciate it. I am an architect by trade but I'm in the commercial side of building so I know a little about the process. I understand that in a divorce it can be difficult for your profession. I just want whats far and for me its a little hard because I will be paying her more than I have in the place for 1/2 cause I did so much work myself plus the fact that my dad gave me some of the money to get it started. But I want to keep the place for sure since my kids help me build it and they helped alot so it's pretty special to us... My STBX never went up much at all so the kids really think of it as our place. I will have the occupancy permit real soon just a few minor things before I have the work done for that. One thing I forgot is there is a unfinished spot for a wood stove but I don't have the wood stove yet. Otherwise the unfinished items are what I decribed. The only other thing is the 3 comparibles that he has on the appraisel were on the market for about 1 year before they sold, plus the fact I know with are the work inside and outside (there is no lawn or landscaping at all) that I could not sell it this summer for what he has it appraised,..... that is just my gut feeling..
Thanks again, Dave
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
Hi, I had my cabin appraised by a licensed appraiser because I need to buy 1/2 my wife out of the cabin because of divorce. I am not in agreement on how he came up with the final number.

<.....snip....>

How he came up with the final number is he appraised it as being 100% finished and then subtracted the amount of money to finish it.

<..... snip........>

My question is I thought a cabin/home was not worth 90% of the total value if it is only done at 90% because of the hassle factor and also the fact I can't refinance it because it is not done... I'm assuming if I sold it in the condition it is in that others couldn't get financing as well.

<.....snip......>Any help would be greatly appreciated.
Thanks Dave

If you were the specific client, and your wife is not informed of the appraisal having taken place, fire this appraiser and get one that knows what they are doing. What this appraiser did was just subtract what is called a "cost to cure" off of the appraiser's opinion of market value that was opined "as if" the cabin were complete. I know you already know this, but what you didn't know is pulling that little stunt does NOT represent what the market reaction to the uncompleted issues would be. So in short, as you describe things, you are correct and this appraiser was not competent for the assignment.

On the other hand, you are correct that appraisers rarely make friends during a divorce purposes intended use. No matter what one side or the other gets p.i.s.s.e.d. off at the appraiser every time. You might nicely request the appraiser to explain and support exactly how only subtracting off cost to cure completion numbers represents market reaction to an uncompleted property with no occupancy permit and that cannot be conventionally financed as of the effective date of the analyses. You might forewarn the appraiser that in the event he/she cannot provide an acceptable answer to that then their report is going to go out for review with the state appraisal board. Or..... perhaps the appraiser should seek another competent appraiser for some cooperative education about that topic so that your appraiser has a chance to correct their work before getting so reviewed.

Point in fact: The onus was on your appraiser to inform you regarding their competency level BEFORE the appraiser accepted the assignment. And if during the course of the assignment the appraiser found they lacked competency, the appraiser was duty bound to so inform you and tell you how they were going to obtain competency or to withdraw from the assignment.

P.S. Once you get rid of half of your wife..... what do you intend to do with the other half? .... ;)
 
Last edited:
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks