C5 Condition Appraised "as-is", Now They Want Me To Rate C4 "subject To".

[TMG]

Seller and agent informed me sale was "as-is" they would be making no repairs. Order instructions say only C6 are required to be made "subject to", so am within order guidelines to appraise it C5 / as-is.

Now....lender is balking on the C5 condition loan, and seller is scrambling to make all the repairs I called out.

They want me to go back into the 23 day old appraisal, and revise it to C4 / subject to repairs.

It was a lot of work bracketing the C5 subject, and it will be no easy task to revise the report to C4. And I would have a new C4 value.

QUESTION: Can I even obligated/required to do this? I think it should be a new assignment.

Thank you in advance for any experience and advice.

 

[HF Mudd]

In cases such as this I've learned over the years to confirm whether or not to proceed with an "as is" vs. "subject to" appraisal IN WRITING after inspection and prior to writing the report. It makes it much easier to ask for them to order a new appraisal (with the appropriate new fee) when they've changed their minds about what they want.

That said, IMNSHO their request changes the conditions of the assignment after the fact, resulting in a new assignment. How much to charge for that new assignment is a business decision.

 

[Meandering]

new report,
new fee,
new date of value.

As is, as of the original date, it was C5 with no one agreeing to make repairs, therefore an EA for C4 was not credible.
23 days later, repairs are being made, the EA is credible that they will be completed raising the completed condition to C4 or higher. New comps are required, new analysis of new comps is required.

They won't like it, but THEY are supposed to know what USPAP rules we are supposed to live by.

.

 

[CANative]

Forget the condition rating for a moment. Did any of the property conditions rise to the level of a required repair (leaking roof, foundation problem, etc)?

 

[RSW]

The letter of engagement stated only C6 is subject to. Your appraisal was an AS IS with a C5 condition rating per the letter of engagement. You now have a business decision to make. You can do a new appraisal with a C4 condition rating subject to repairs using a HC not an EA. You will most likely need to research for C4 Comps or better and will need to complete a new 1004mc. Time is money. Don't do it for free.

 

[Proactive]

Sure. For the right price.

 

[Tom D]

i'm confused. did you ask for items to be repaired, or just described deferred maintenance. c5 is pretty well beat up and worn. if you did not ask for repairs then the lender wants the condition value to be a c4. this is a new assignment (keep that request as proof). you need to use new comps, new photos, new 1004, new more better value. the only thing you can re use is the drawing, neighborhood info, etc. how much do you like this client? i wouldn't charge a full fee although you have to do a majority of new work. if you did ask for enough repairs, then the condition should have been c4. then you eat the appraisal for that mistake.

 

[TMG]

Forget the condition rating for a moment. Did any of the property conditions rise to the level of a required repair (leaking roof, foundation problem, etc)?

No structural issues noted. It was an unfinished remodel, all of the interior doors & jambs missing, all baseboard missing, bathroom & kitchen flooring missing, green pool.
I did an EA and made an itemized list "estimating" a total of $50k would bring the subject up to C4 and appraised it as-is.

When the seller & agent tell me they will be making no repairs, the thought of making the appraisal "subject to" never crossed my mind.

In hindsight, and moving forward, I should have stopped right there and called in with the "as is" - "no repairs" dilemma.

 

[TMG]

i'm confused. did you ask for items to be repaired, or just described deferred maintenance. c5 is pretty well beat up and worn. if you did not ask for repairs then the lender wants the condition value to be a c4. this is a new assignment (keep that request as proof). you need to use new comps, new photos, new 1004, new more better value. the only thing you can re use is the drawing, neighborhood info, etc. how much do you like this client? i wouldn't charge a full fee although you have to do a majority of new work. if you did ask for enough repairs, then the condition should have been c4. then you eat the appraisal for that mistake.

Did not ask for repairs - just made a list so they'd know, and the $50k list is what I subtracted from all of the C4 comps. I had two C5 comps that did not require the $50k adj.

 

[J Grant]

If it was a remodel, the issue was not repairs, it was completion. If it is a remodel, when completed would it be a C2 or C3, not a C4?