"ARV" and As-Is Value in 1004UAD, How to Properly Support Secondary Value Opinion?

[RACO]

Hi, I have a client who wants an "after repair value" (subject to) as the primary value with an As-Is value in an addendum. The subject is an existing SFR property. My question is, using a 1004 UAD form, how do I properly support the as-is value using an addendum page?

Per the client:
"we also need an "as-is" value. We do not need comparables for this and you can add it into an addendum. If the property is partially constructed or partially rehabbed at the time of inspection, you can deduce an as-is value by subtracting repairs and a reasonable builder profit from your ARV. If no work has been completed on the Subject, please use a few dated, as-is comps to come up with your as-is value. We do not need the comps listed out for the as-is value."

I told them first of all I cannot give an opinion of as-is value using the SCA without supporting it with comps, and second that I would need a higher fee. I also do not intend to subtract building repair costs + "reasonable builder profit" and call it market value. So bottom line, I feel I need to do 2 appraisals. My problem is, if I do this in 1 report, how do I report all the supporting data for the as-is value in the addendum? Am I required to basically duplicate grid contents in an addendum or is there a USPAP compliant way to briefly summarize it or a better way to obtain as-is value and support it? Something else?

Thanks

 

[jay trotta]

Appears you're (licensed) in need of a Supervisor to guide you thru the process.

Good Luck

 

[NJAPRAZE]

1) if you don't have experience with such orders... you should prob disclose to the client and explain what you are doing to achieve compentcy / the help you;re getting
2) there are 2 ways you can do this:

a) comps 1-3 are for ARV, while comps 4-6 (on separate grid page) are for AIV; provide commentary in addendum or additional comment section explaining about use/inclusion of these comps, adjustments made, etc.; make sure you also update Transmittal page to explain that assignment is for two ops of val - >ARV (shown above) and AIV (rfer to comps C4-C6 on page X); also - inlcude addt'l reconciliation section comments n addendum restating the two opins of value

b) if you use TOTAL - you might be able to use supple val addend form from another co -i.e. SingleSource, Protek etc ; wouldn't necessarily use... as you're essentially "Advertising" for another firm as their logo will remain on it and next time... client goes to them instead

hope this helps!

 

[RACO]

True on the disclosure of achieving competency, thanks for the reminder. I'm used to doing different assignments for different value opinions but if the client still wishes me to continue with the appraisal after my disclosure I will try your suggestions. Thanks for the reply.

 

[RACO]

Appears you're (licensed) in need of a Supervisor to guide you thru the process.

Good Luck

I had an excellent supervisor, unfortunately he recently passed away, so now I am doing my best to navigate this complicated business without any direct guidance. I do appreciate having appraisers with a broader range of experience who are willing to offer guidance to those who haven't "been around the block" as many times.

 

[sputnam]

You support a secondary value opinion in exactly the same ways that you support the primary opinion of value. What differs is that you might not need to report the same level of detail. Of course, you can include a second sales comparison analysis. You can also include additional comparable sales, some of which require adjustments for the repairs and some of which don't. You can also do those analyses and retain them in your work file and just include summary comments in your report. It depends on the needs of the Client and the Intended Use of the appraisal.

 

[jay trotta]

I had an excellent supervisor, unfortunately he recently passed away, so now I am doing my best to navigate this complicated business without any direct guidance. I do appreciate having appraisers with a broader range of experience who are willing to offer guidance to those who haven't "been around the block" as many times.

My suggestion, reach out to Dublin Ohio look him up on this forum, he may be willing to assist.

 

[J Grant]

The client asks you do not include comp sales in the appraisal report for the "as is" value, but pull them anyway to support your opinion and keep them in your work file, comment in report they are in the work file.

You sound like you are doing an excellent job of seeking help to mentor yourself- you are asking the right questions - some appraisers never even get to that stage- identify the questions to be asked.

 

[Basically Rectangular]

Hi, I have a client who wants an "after repair value" (subject to) as the primary value with an As-Is value in an addendum. The subject is an existing SFR property. My question is, using a 1004 UAD form, how do I properly support the as-is value using an addendum page?

Per the client:
"we also need an "as-is" value. We do not need comparables for this and you can add it into an addendum. If the property is partially constructed or partially rehabbed at the time of inspection, you can deduce an as-is value by subtracting repairs and a reasonable builder profit from your ARV. If no work has been completed on the Subject, please use a few dated, as-is comps to come up with your as-is value. We do not need the comps listed out for the as-is value."

I told them first of all I cannot give an opinion of as-is value using the SCA without supporting it with comps, and second that I would need a higher fee. I also do not intend to subtract building repair costs + "reasonable builder profit" and call it market value. So bottom line, I feel I need to do 2 appraisals. My problem is, if I do this in 1 report, how do I report all the supporting data for the as-is value in the addendum? Am I required to basically duplicate grid contents in an addendum or is there a USPAP compliant way to briefly summarize it or a better way to obtain as-is value and support it? Something else?

Thanks

After Repair value is based on a hypothetical condition that the repairs are complete, use comps 1-3 or 1-6. As-is value can be included, don't allow the client's lessened scope of work to influence your scope of work; get comps similar to the subject and they can be 4-6 or 7-9, etc depending on how many comps you use for the after repair.
As-Is/after repair 2 values on one assignment are common, just be sure to explain your work, as one page of the gridded comps will reflect a certain condition for your subject, while the other page will reflect the other condition, so explanatory comments are necessary. Often they'll sneak in an REO addendum to get you to provide two values! Note that if its an FHA 203K, and they also want an as-is, that should be a separate assignment. However for conventional I have seen many requests for 2 values. Of course ask for an increased fee!!!

 

[TerryRohrer]

True on the disclosure of achieving competency, thanks for the reminder. I'm used to doing different assignments for different value opinions but if the client still wishes me to continue with the appraisal after my disclosure I will try your suggestions. Thanks for the reply.

Sounds to me like you fully understand the problem and are asking opinions regarding compliance with USPAP under specific assignment conditions. I find the competency comments to be offbase, at best. You could create a second report and complete the "as is" value in that, then copy the grid to your addendum in the as repaired report, with appropriate commentary. Or, less, although the critical issue is to do the work and at a minimum have it in your workfile.