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"as Is" Or "subject To"

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ratherbefishing

Freshman Member
Joined
Dec 6, 2013
Professional Status
Licensed Appraiser
State
Nevada
Have a pending appraisal on a property which incurred recent water damage from commode leak while owners out of town. Damaged flooring has been removed, but new tile and carpeting yet to be installed pending insurance settlement. Loan officer has instructed borrowers that appraiser will need to complete his report "as is" or their loan will not be approved. Anyone out there ever run into this before?
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Whack it for market reaction to missing finished flooring. In my experience if you do reflect actual market reaction that is typically 2-5 times actual costs, magically you will be asked to go back after they finish the repairs which constitutes a new assignment with a different SOW.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Have a pending appraisal on a property which incurred recent water damage from commode leak while owners out of town. Damaged flooring has been removed, but new tile and carpeting yet to be installed pending insurance settlement. Loan officer has instructed borrowers that appraiser will need to complete his report "as is" or their loan will not be approved. Anyone out there ever run into this before?

Not that case specifically but I do appraisals "As is" with items missing or unfinished. Estimate a cost to cure and then adjust a market reaction for the defect that may be more than cost to cure but has some relation to it, Whatever your value is ad adjusted it is. If it is below sale price or whatever, not your problem about their loan or deal.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
The appraisal report should be "subject to completion of repairs or remodeling". I have heartburn with making it "as-is" with a cost to cure and then making a condition adjustment...but that's just me.
 

alex gilbert

Member
Joined
Feb 21, 2003
Professional Status
Certified Residential Appraiser
State
California
I have heartburn with making it "as-is" with a cost to cure and then making a condition adjustment...but that's just me.

Why? I’m not trying to be argumentative, but doesn’t almost every property have an as-is value? Whether it’s missing a light switch or the entire roof, if it’s priced right someone will buy it, and we should be able to determine that “right price.” That may require a condition adjustment and that adjustment might be the repair cost, the repair cost + entrepreneurial profit, or something completely unrelated. But if the client wants the as-is value and it can be credibly derived, I wouldn’t see a problem.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
The appraisal report should be "subject to completion of repairs or remodeling". I have heartburn with making it "as-is" with a cost to cure and then making a condition adjustment...but that's just me.
Add $8 to your fee. That'll buy you a box of Zantac 150
 

jay trotta

Elite Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
Did the Insurance adjuster provide an estimate of repair ? Do they have a copy ? Include that in your report, do a hypothetical condition and the Lender can make a decision.
 

JTip

Elite Member
Joined
Oct 12, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
Damaged flooring has been removed, but new tile and carpeting yet to be installed pending insurance settlement.

Apparently the homeowner HAS an invoice since the contractor already started rippin' and a tearin'; ask for a copy. As is with a cost to cure (see attached invoice).

Easy money.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
So, how do you determine a cost to cure? I'm not in the business of providing an estimate of that nature. I can usually tell you the market perception of a cost to cure but not the actual costs.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Call a few flooring contractors. 5-10 minutes tops. Once a year follow up to keep up to date etc.
 
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