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"as is" value comments

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sueinprescott

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Feb 10, 2003
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Licensed Appraiser
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Arizona
I can't find where in USPAP that says you need to include an "as is" value for new construction in the addenda. Does anyone have info on this? I just commented the "as is" is xx,zzz per recent lot sales in sub'd and supporting documentation is in file as required by USPAP? Please advise.
 
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walt kirk

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You can't find it because it isn't there. Finding the as-is value of ongoing construction is not within the normal scope of services.
 

Mike Garrett RAA

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Colorado
Some lenders have been requiring it...but it is really dumb!
 

Mountain Man

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Certified General Appraiser
State
Georgia
Some lenders have been requiring it...but it is really dumb!
What :!: :?: :x :roll:
Sounds like a job for AVM Man! :lol:
 

sueinprescott

Sophomore Member
Joined
Feb 10, 2003
Professional Status
Licensed Appraiser
State
Arizona
I was talking with a fellow appraiser today and she said that it was required per USPAP? I'm going to talk to her again :? maybe a lender told her to do that too? it is pretty dumb though...especially once they've already started...like with foundation/stem wall :silly:
 

Mike Garrett RAA

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Colorado
Most appraisers are not qualified to offer such an "as is" value....it's tough enough just to estimate how far along the improvement is.
 

Terrel L. Shields

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Arkansas
There has been some verbage about as is value in bank law not in USPAP. I report as is value unless it simply is not practical and here is why.

I am being sued and had I been asked to appraise the sale as proposed (subject to repairs) I would likely have reported a value of $258,000 ± because the buyers were going to be required to do a substantial amount of updates and the bank ended up lending them that much, which was about $26,000 in retro repairs more than the sales price....see the problem?

The plaintiffs claim my as is value is inflated. How much better case they could make if they could state the appraised value was $232,000 but I appraised it for $258,000?? That 'as is' or subject to caveat is meaningless until you go into depositions and fully explain it. Luckily I only did the as is in the first place. THus by reporting both values, the plaintiffs would have to report both values and explain the difference. Remember in court the plaintiffs are only going to quote those facts that put you in the least favorable light. Report new const. as is value as the lot value and be done with it.

ter
 

Ben Vukicevich SRA

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Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Sue,

It's in USPAP....way, way down in Statement 10.


D. USING HYPOTHETICAL CONDITIONS



1. Failing to disclose known facts concerning the property being appraised

2. Failing to indicate the “as is” value of the property as of the date of the report and how the “as is” value differs from the value conclusion under a hypothetical condition


It's for federally related transactions which leaves out loans for FNMA/FHLMC/FHA and VA-they're not considered federally-related transactions. So you don't have to comply with Statement 10 for them..but if you're doing it for the local depository institution (bank) better call and check. There's also an out for them if they underwrite the loan to FNMA/FHLMC guidelines, even if they don't sell it to them, so that you're still free from the dreaded "as-is" value requirement of Statement 10.

Ben
 

Richard Carlsen

Elite Member
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Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan


New construction loans are not, to my knowledge, traded on the secondary market, and therefore would not be subject to the "as is" requirement.

What you may be talking about is what some new construction lenders have requested that we do when we do a draw inspection. they want us to state how much money, based on the draw, may be released to the builder. We refuse to do this. We provide a report with a percentage of completion based on our visit to the site and let their bean counters figure it out.

If you has to do a value "as is" each time you did a draw, that would constitute a new appraisal each and every time you did a draw inspection since you would have a new date. USPAP considers a change of date to be a new assignment.
 
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