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As-is Or Subject To

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MARKETVALUENOW

Sophomore Member
Joined
Dec 14, 2007
Professional Status
Licensed Appraiser
State
Michigan
Working on a purchase from a bank where the building inspector granted a temorary C of O with the following repuirements:

1) Install smoke detectors outside of bedrooms.
2) Install baseboard in south bedroom
3) Replace doors and locks in breezeway (which are currently functioning)
4) Paint and seal basement walls (Which appear to have no leaks)
5) Paint interior of dwelling
6) Install gutters

These items do not appear to affect the marketability and functional utility of the property. I have included similar sales in similar condition as comparables.

So the question is "as-is" or "subject to completion of the repairs"

Thanks for the time.
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
What is the purpose of your assignment? What has your client asked for?
 

MARKETVALUENOW

Sophomore Member
Joined
Dec 14, 2007
Professional Status
Licensed Appraiser
State
Michigan
This is a purchase transaction for mortgage financing purposes. The client has requested a 1004 URAR.

thanks for the quick response
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Working on a purchase from a bank where the building inspector granted a temorary C of O with the following repuirements:

1) Install smoke detectors outside of bedrooms.
2) Install baseboard in south bedroom
3) Replace doors and locks in breezeway (which are currently functioning)
4) Paint and seal basement walls (Which appear to have no leaks)
5) Paint interior of dwelling
6) Install gutters

These items do not appear to affect the marketability and functional utility of the property. I have included similar sales in similar condition as comparables.

So the question is "as-is" or "subject to completion of the repairs"

Thanks for the time.

What are the ramifications if the conditions of the temporary Certificate of Occupancy are not satisfied?
 

MARKETVALUENOW

Sophomore Member
Joined
Dec 14, 2007
Professional Status
Licensed Appraiser
State
Michigan
They ramifications are not specifically listed, but I would assume that the permanent C of O would not be granted.

I have left a message at the appropraite department with the municipality to verify this information and am waiting on a return call.

I guess my question is not as easy as I thought it was!!
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
The ramifications are that if you dont either do the appraisal "subject to" with need for an inspection OR "as is" with a deduction for cost to cure, you could be held liable to finish the work if the builder doesnt. Thats why I asked what your client asked for.
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
MarketValueNow,

You have also left out telling us about the element of SOW and problem identification regarding if this is classed as a Federally Related Transaction or not. Don't answer this one too fast everybody. Most all the secondary players were granted exemptions as being defined to be FRTs.

So MVN, is the bank keeping this loan in-house?

To all posters. Want good answers? Then post the problem identification, intended use, client by type at least, intended users, and complete SOW determination unless that is the issue. Being you need help determining the SOW. Don't do all of this, don't expect good answers.

Webbed.

P.S. Do comps in "similar condition" mean comps with equally outstanding temporary certificates of occupancy that can be revoked? And did you PROVE the buyers were informed of that and understood what that meant?
 
Last edited:

MARKETVALUENOW

Sophomore Member
Joined
Dec 14, 2007
Professional Status
Licensed Appraiser
State
Michigan
This is a federally related transaction. The bank is not keeping this loan in-house, from what I understand.

Hope that helps. Also, my SS # is 372-83-4768 and you can have my first born, expected sometime next year.

P.S. similar condition means similar condition. It is not related to outstanding C of O's only condition. Again NOT city restrictions. There could be several reasons why the city did not inspect other sales.

Thanks for all the help. Sounds like I am going to have to go with my gut on this one. And my gut is saying I am hungry right now. Time for lunch!!! Who's buying?
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
This is a federally related transaction. The bank is not keeping this loan in-house, from what I understand.

Hope that helps. Also, my SS # is 372-83-4768 and you can have my first born, expected sometime next year.

P.S. similar condition means similar condition. It is not related to outstanding C of O's only condition. Again NOT city restrictions. There could be several reasons why the city did not inspect other sales.

Thanks for all the help. Sounds like I am going to have to go with my gut on this one. And my gut is saying I am hungry right now. Time for lunch!!! Who's buying?


If it is a federally related transaction you have to give an "as is" value dont you? You could also make your appraisal subject to completion but youd still need to give an "as is" value .. ie value less cost to cure. While the remaining work seems relatively minimal together it could add up quickly.
 

MARKETVALUENOW

Sophomore Member
Joined
Dec 14, 2007
Professional Status
Licensed Appraiser
State
Michigan
Thanks for your help. I do appreciate it. I have never encountered this specific situation before and wanted to make sure I was on the right track. That is why I came to you for help.

Next time I am in New Mexico, I owe you lunch, but I can't imagine why I would be there.
 
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