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Change In Contract

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Ron Little

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Sophomore Member
Joined
Aug 19, 2003
Professional Status
Licensed Appraiser
State
California
Completed an appraisal on a property in which it was to be a lease option. Sale price $187K, I came in at $180K. They (the lender) wants me to change the appraisal to remove the lease option comment as they are no longer going that route.. and reduce the contract price to $180K. Is this permited in FHA?
 

BRCJR

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Joined
Sep 20, 2005
Professional Status
Licensed Appraiser
State
Virginia
Completed an appraisal on a property in which it was to be a lease option. Sale price $187K, I came in at $180K. They (the lender) wants me to change the appraisal to remove the lease option comment as they are no longer going that route.. and reduce the contract price to $180K. Is this permited in FHA?

I do not know what others may do, but for me, I change nothing in the original body of the report. I add the new contract in an addendum and explain what is happening.
 

Mike Phillips

Senior Member
Joined
Dec 16, 2004
Professional Status
Certified Residential Appraiser
State
Florida
Completed an appraisal on a property in which it was to be a lease option. Sale price $187K, I came in at $180K. They (the lender) wants me to change the appraisal to remove the lease option comment as they are no longer going that route.. and reduce the contract price to $180K. Is this permited in FHA?

Question to see if I understand you. The property was under a lease agreement that contained an option for the tenant to buy the home, correct? And it is the tenant (now also the buyer) who is seeking FHA financing, right?

Was a sales contract available to you at the time of the first appraisal? If I understand you correctly the sale price on the first contract was $187,000, right? A second contract has since been executed and the new sale price is $180,000, right?

OK, if that is the case, I agree with another poster. Make no changes to the original appraisal except to reference comments in the addendum regarding the sale price and explain the second contract in the addendum OR do a new appraisal. Of course, if you do a new appraisal you'd still have have to disclose the previous agreement.

The USPAP gurus might have a way around that but that is how I would do it and I'd do it cheap or for free (the second appraisal) to make it go away. Depends on how long since the original appraisal. I feel more comfortable doing it my way - might be overkill - I don't care.
 

RSW

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Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
The next thing they will want is for you to put the buyer down as the owner. Not!
 

Ron Little

Thread Starter
Sophomore Member
Joined
Aug 19, 2003
Professional Status
Licensed Appraiser
State
California
Mike,
You are correct in your assumptions. However, from what I understand we can not do a 2nd appraisal for FHA for the same property within such a short time frame as this (1 month ago).

Bill,
That is what I did too, but the underwriter will KTD ("kill the deal") unless I take the comment out.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
That is what I did too, but the underwriter will KTD ("kill the deal") unless I take the comment out.
If more appraisers refused to roll over every time the UW claims it will kill the deal, then these deals will get killed or not.

The burden is on the UW to make the call and accept liability. FHA can be your friend. :flowers:
 
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