Seeing that this falls under the topic of FNMA/FHLMC, I'd refer to their guidelines. FNMA guidelines will require a subject to value if the failure to have completed the area would have affected the livability or soundness of the structure. If the home has no other baths, then livability is obviously an issue. Otherwise, you should proceed in the way you feel is most comfortable so long as you don't mislead anyone and so long as it is very clear what it is you are doing.
I would recommend:
1. Include photos of the incomplete area
2. Not include fixtures which are onsite, but not installed. these have a way of walking away and are not a part of the RE. Some states, plumbing cannot be done by a homeowner, so to assume that the homeowner could or would do may be a potential issue.
FNMA Guides: XI, 405.08: Property Condition (11/01/05)
We permit an appraisal to be based upon the “as is” condition of the property as long as any minor conditions, such as deferred maintenance, do not affect the livability, soundness, or structural integrity of the property, and the appraiser’s opinion of value reflects the existence of these conditions. Minor conditions and deferred maintenance include worn floor finishes or carpet, minor plumbing leaks, holes in window screens, or cracked window glass. Minor conditions and deferred maintenance are typically due to normal wear and tear from the aging process and the occupancy of the property. While such conditions generally do not rise to the level of a “required repair,” they must be reported.
The appraiser must identify physical deficiencies that could affect the soundness, structural integrity, or livability of the property as part of the appraiser’s description of the physical condition of the property. These may include cracks or settlement in the foundation, water seepage, active roof leaks, curled or cupped roof shingles, inadequate electrical service or plumbing fixtures, etc. When such deficiencies exist or improvements are incomplete, the property must be appraised subject to completion of the specific alterations or repairs. In situations where a condition may need repair but the appraiser may not be qualified to make that decision, the appraiser must appraise the property subject to a satisfactory inspection by a qualified professional. In such cases, the lender must have the property inspected and any material conditions repaired before it delivers the mortgage to us. The appraiser may be asked to revise his or her appraisal based upon the results of the inspection, in which case the appraiser would incorporate the results of the inspection and measure the impact, if any on the appraiser’s final opinion of value.
