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As-is Or Subject To

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AD0607

Freshman Member
Joined
Jan 7, 2014
Professional Status
Licensed Appraiser
State
Wisconsin
I received a revision request on an appraisal I completed in which the home appeared to have mold in the basement. I marked the appraisal subject to an inspection. The revision request wants me to make the appraisal as is with an extraordinary assumption. Would this be considered misleading? Or allowed under FNMA or USPAP? I've never had this request in the past as all of my other clients had the inspection done.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Making an EA contrary to what you observed (mold) could be misleading , and it is an AS IS valuation for GSE lending....On what basis could you make an EA that no mold is present, since you saw mold? ( I assume you saw it) An EA has to have a credible basis ..
See what others say.
 

AD0607

Freshman Member
Joined
Jan 7, 2014
Professional Status
Licensed Appraiser
State
Wisconsin
Making an EA contrary to what you observed (mold) could be misleading , and it is an AS IS valuation for GSE lending....On what basis could you make an EA that no mold is present, since you saw mold? ( I assume you saw it) An EA has to have a credible basis ..
See what others say.

Thanks for the reply. I think if I changed it at all it would have to be a hypothetical condition since I did see mold, or what I think is mold since I'm not an expert. But since the extent of the mold is unknown I feel like a required inspection is the best way to go.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
This appraisal report is subject to the following scope of work, intended use, intended user, definition of market value, statement of assumptions and limiting conditions, and certifications. Modifications, additions, or deletions to the intended use, intended user, definition of market value, or assumptions and limiting conditions are not permitted. The appraiser may expand the scope of work to include any additional research or analysis necessary based on the complexity of this appraisal assignment. Modifications or deletions to the certifications are also not permitted. However, additional certifications that do not constitute material alterations to this appraisal report, such as those required by law or those related to the appraiser’s continuing education or membership in an appraisal organization, are permitted.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
An HC is worse

If you saw mold you saw it, you called for an inspection, they are trying to get you to conceal a possible health/safety issue (mold)

Did you see black growth or green algea type coating?
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
I received a revision request on an appraisal I completed in which the home appeared to have mold in the basement. I marked the appraisal subject to an inspection. The revision request wants me to make the appraisal as is with an extraordinary assumption. Would this be considered misleading? Or allowed under FNMA or USPAP? I've never had this request in the past as all of my other clients had the inspection done.

If you read the check box for inspection, it states the following:

subject to the following required inspection based on the extraordinary assumption that the condition or deficiency does not require alteration or repair:

Was the home inspection done? What was the findings? If it was not mold or anything requiring repair or alteration, the underwriter can clear the subject to with that inspection report report themselves or if they want to pay you for a 1004D and you attach the inspection report to that form, you can satisfy the subject to with the 1004D.

The problem becomes if the inspection requires repair or mold remediation.

If the appraiser is not qualified to evaluate the alterations or repairs needed, the appraisal must identify and describe the deficiencies and the property must be appraised subject to a satisfactory inspection by a qualified professional. The appraisal may have to be revised based upon the results of the inspection. If so, the report must indicate the impact, if any, on the final opinion of value. The lender must review the revised appraisal report to confirm that no physical deficiencies or conditions that would affect the safety, soundness, or structural integrity of the property are indicated. A certification of completion is required to confirm the necessary alterations or repairs have been completed prior to delivery of the loan.
 

AD0607

Freshman Member
Joined
Jan 7, 2014
Professional Status
Licensed Appraiser
State
Wisconsin
An HC is worse

If you saw mold you saw it, you called for an inspection, they are trying to get you to conceal a possible health/safety issue (mold)

Did you see black growth or green algea type coating?


It was the green type
 

AD0607

Freshman Member
Joined
Jan 7, 2014
Professional Status
Licensed Appraiser
State
Wisconsin
If you read the check box for inspection, it states the following:

subject to the following required inspection based on the extraordinary assumption that the condition or deficiency does not require alteration or repair:

Was the home inspection done? What was the findings? If it was not mold or anything requiring repair or alteration, the underwriter can clear the subject to with that inspection report report themselves or if they want to pay you for a 1004D and you attach the inspection report to that form, you can satisfy the subject to with the 1004D.

The problem becomes if the inspection requires repair or mold remediation.

If the appraiser is not qualified to evaluate the alterations or repairs needed, the appraisal must identify and describe the deficiencies and the property must be appraised subject to a satisfactory inspection by a qualified professional. The appraisal may have to be revised based upon the results of the inspection. If so, the report must indicate the impact, if any, on the final opinion of value. The lender must review the revised appraisal report to confirm that no physical deficiencies or conditions that would affect the safety, soundness, or structural integrity of the property are indicated. A certification of completion is required to confirm the necessary alterations or repairs have been completed prior to delivery of the loan.


Thank you! This is exactly what I needed to see.
 

Tony V

Elite Member
Joined
Mar 29, 2005
Professional Status
Certified Residential Appraiser
State
New York
I got this from the Divine Ms Pam and the forum members back in the mid 2000's. Still holds true today...I printed it out and itis still hanging on my wall..


HYPOTHETICAL CONDITION:
That which is contrary to what exists but is supposed for the purpose of analysis.
Comment: Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.

EXTRAORDINARY ASSUMPTION:
An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser's opinions or conclusions.
Comment: Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.
 

DWiley

Elite Member
Joined
Apr 4, 2007
Professional Status
Certified Residential Appraiser
State
Tennessee
What is the intended use of the appraisal? Without knowing that, no one can give you solid guidance on this. If it is a GSE origination loan, then you cannot do what the client asks, because you cannot add such an assumption. If for some other intended use, you may be able to comply with the request. MAY.
 
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