Change in GLA from Plans & Specs

[Webbed Feet]

Well the onus on meeting the requirements is that of the apprasier .. but it can be done which has been the thrust of this thread. The requirements of the appraisal hypothetical condition have been met and or exceeded.

P.E.

With respect here, there something big and nasty you've been missing. What it is, again, is an "Update" is a new assignment. A new real estate appraisal.

The problem here is not if the hypothetical conditions in the first original appraisal have been met or exceeded or not. If this client had stopped at just wanting a satisfactory completion certificate (442) an appraiser might well get away with simply saying the results exceed the original plans and specs. Sort of like saying putting on solid granite when they originally specified laminated counters is not adverse to the original appraisal opinions. But this is not where the client stopped. This client wants a brand new spanking real estate appraisal (and I don't care if we incorporate by reference or attachment an older appraisal or not. An update is in fact a brand new spanking real estate appraisal !!! ) with a new value conclusion not only based on only one single comparable for Pete's sake..... the client wants more, additional, hypothetical conditions used!

Bottom line, the factual improvements, as they really exist as of the new effective date of the update are not the house that was specified in the first appraisal. The moment this O.P. follows such dumb instructions like "don't give any value to the finished attic 900 SqFt of GLA" the O.P. just agreed to base an update (brand spanking new appraisal assignment) on a hypothetical condition.

Worse, I think an entire country of appraisers all have their brains falling out (just like I think Fannie's brains fell out on the 1004d) when those appraisers utterly fail to clarify that the intended use on the 1004d is directly attached to a purpose of selling a loan to a secondary player. A player that doesn't allow uncleared HC's when those appraisers now again proceed to use additional HC's in the process of doing the new Summary Appraisal Update Report.

Prohibiting something in an original prior appraisal, and then allowing that same thing that was prohibited in a so-called "Update" of that very same piece of real estate, for what is really the same purpose, just makes ever so much common sense! NOT! ... The property, in the new assignment, has to be appraised without any HC's or EAs not preprinted on the forms. It is still a Fannie related assignment.

Webbed.

 

[PropertyEconomics]

P.E.

With respect here, there something big and nasty you've been missing. What it is, again, is an "Update" is a new assignment. A new real estate appraisal.

The problem here is not if the hypothetical conditions in the first original appraisal have been met or exceeded or not. If this client had stopped at just wanting a satisfactory completion certificate (442) an appraiser might well get away with simply saying the results exceed the original plans and specs. Sort of like saying putting on solid granite when they originally specified laminated counters is not adverse to the original appraisal opinions. But this is not where the client stopped. This client wants a brand new spanking real estate appraisal (and I don't care if we incorporate by reference or attachment an older appraisal or not. An update is in fact a brand new spanking real estate appraisal !!! ) with a new value conclusion not only based on only one single comparable for Pete's sake..... the client wants more, additional, hypothetical conditions used!

Bottom line, the factual improvements, as they really exist as of the new effective date of the update are not the house that was specified in the first appraisal. The moment this O.P. follows such dumb instructions like "don't give any value to the finished attic 900 SqFt of GLA" the O.P. just agreed to base an update (brand spanking new appraisal assignment) on a hypothetical condition.

Worse, I think an entire country of appraisers all have their brains falling out (just like I think Fannie's brains fell out on the 1004d) when those appraisers utterly fail to clarify that the intended use on the 1004d is directly attached to a purpose of selling a loan to a secondary player. A player that doesn't allow uncleared HC's when those appraisers now again proceed to use additional HC's in the process of doing the new Summary Appraisal Update Report.

Prohibiting something in an original prior appraisal, and then allowing that same thing that was prohibited in a so-called "Update" of that very same piece of real estate, for what is really the same purpose, just makes ever so much common sense! NOT! ... The property, in the new assignment, has to be appraised without any HC's or EAs not preprinted on the forms. It is still a Fannie related assignment.

Webbed.

Webbed .. my apologies I didnt read a post saying to ignore the 900 square feet. I am in full and complete agreement with you. My understanding was the assignment called for the appraiser to state the value was not less than that originally reported in the first appraisal. I am in agreement its a new assignment and have been from the beginning.
If one wants to throw additional HCs into the mix then I am also of the mind set it cant be done ... period ... for the purpose of fannie lending. I dont know if its a fannie assignment or not, that also has not been made clear, Im under the assumption that it is .. but we dont really know unless the OP shares what their original scope of work was ... which I will bet you money doesnt address fannie. Care to take the bet?

 

[Webbed Feet]

P.E.

LOL! You are right... I don't know for sure if the mortgage was Fannie bound. So I won't take your bet. And I sure know that far, far, too many appraisers fail to get SOW details clarified like they should beforehand. But tell me, would you place a bet that nothing negative out of the client would happen if the O.P. put all over that 1004d that the Summary Update Appraisal Report could NOT be used for any secondary mortgage market financing?



Webbed.

 

[PropertyEconomics]

P.E.

LOL! You are right... I don't know for sure if the mortgage was Fannie bound. So I won't take your bet. And I sure know that far, far, too many appraisers fail to get SOW details clarified like they should beforehand. But tell me, would you place a bet that nothing negative out of the client would happen if the O.P. put all over that 1004d that the Summary Update Appraisal Report could NOT be used for any secondary mortgage market financing?



Webbed.

Hmmm Bet with Webbed ... Purhcase a ZONE .... Im gonna have to think about which is the biggest gamble. Can I get back to you on that one? :laugh:

 

[Webbed Feet]

P.E.

Sure.. take the weekend. I know that is a tough one.

Webbed.

 

[cathy0405]

Cathy0405,

What in the world are you posting about? What is the exact form number on the bottom right hand side of this form? There are no longer any current "Recertification" forms the way you are wording your posts to indicate. I think you need to post what you think a "recertification" is.

Webbed.

Form CRT FNC - WinTotal

This is probably a dated form, but the lender stated "a final with recertifiction". I think the 1004D is the acceptable form she is asking for.

 

[Webbed Feet]

Form CRT FNC - WinTotal

This is probably a dated form, but the lender stated "a final with recertifiction". I think the 1004D is the acceptable form she is asking for.

Ms. Cathy,

I could not move forward with instructions like those. Specifically because the vast majority of the clients have no idea what a "recertification" is to them, or to a real estate appraiser. So before I could proceed I would have to immediately ask this person back in writing what she thought a recertification was or to identify the specific Fannie or Freddie form number she thought she was requesting.

The moment anyone in lending asks for a "recertification" the appraiser has an unidentified SOW on their hands until the matter is clarified. In my experience, almost always, they are asking for a new real estate appraisal and do not understand that they are. I would bet you in your case that she does not understand that for you to opine a value, using a more recent effective date, is not something you can do based on only one more closed sale. Nor does she understand that is what is called an "Update" these days, that an update is NOT an extension of a prior real estate appraisal, that her request is for a new appraisal assignment. I hope you know that top portion on the 1004d is exactly what I just described, a new real estate appraisal that is not an extension of the prior appraisal. And that the 1004d does NOT comply with USPAP if you provide only it.

But I could wrong. You have to find out what she meant by "recertification." How much do we want to bet she can't explain it to you?

Webbed.

P.S. I really don't mean to sound condescending, but I have to ask. You are aware a "not less than" value conclusion (what is meant by the 1004d not declined statement) constitutes a new real estate appraisal per USPAP? A real estate appraisal that must comply with all USPAP standards, only that form misses the mark by a whole bunch?

 

[cathy0405]

Per (in quotes)
Director of Research and Technical Issues
The Appraisal Foundation

"If your original appraisal was performed “subject to” completion per plans and specifications and you’ve received a request asking you to go out and verify that the improvements were completed per plans and specifications but they were not, providing a report stating they were would be misleading and in violation of USPAP."
We all agree to that.

"The request for a final inspection and “recertification” is a new assignment, and as indicated in Advisory Opinion 3, Update of a Prior Appraisal, should be treated as such. In this case, your updated appraisal should accurately reflect the status of the improvements as of your effective date of value." We also all agree to that.

"USPAP does not address the use of any specific appraisal form(s), so I can’t tell you which form to use for your assignment. Remember that this is a new assignment, and as indicated in AO-3, you have three options of how to communicate your assignment results." This is the dilemma we are having in this thread.

"Being asked to provide an additional comparable sale might mean the scope of work for this new assignment is different than the scope of work from your prior assignment. " This is my real problem. Because SF has changed and workshop added, I must reflect such changes in the Sales Comparison Approach for the "additional comparable" required by the lender. I feel three closed comparable sales based on the subject's current improvements are necessary to be in compliance with USPAP, not just one. If I complete a 1004D stating "conditions or requirements as stated in the original appraisal report has been satisfied with the additions of the 900 SF unfinished bonus room being finished to living area and a workshop added", include pictures and a new sketch, and a Sales Comparison grid reflecting the changes with 3 closed sales (all within one year of the new effective date, preferably 6 months), would this be acceptable for the new assignment and in compliance with USPAP?

 

[RSW]

Webbed .. my apologies I didnt read a post saying to ignore the 900 square feet. I am in full and complete agreement with you. My understanding was the assignment called for the appraiser to state the value was not less than that originally reported in the first appraisal. I am in agreement its a new assignment and have been from the beginning.
If one wants to throw additional HCs into the mix then I am also of the mind set it cant be done ... period ... for the purpose of fannie lending. I dont know if its a fannie assignment or not, that also has not been made clear, Im under the assumption that it is .. but we dont really know unless the OP shares what their original scope of work was ... which I will bet you money doesnt address fannie. Care to take the bet?

PE,

Mike and I have been trying to get that across to you all through this thread. It's funny that you just now see the light.

Welcome to our point of view.

 

[Webbed Feet]

<...... snip......>
"Being asked to provide an additional comparable sale might mean the scope of work for this new assignment is different than the scope of work from your prior assignment. " This is my real problem. Because SF has changed and workshop added, I must reflect such changes in the Sales Comparison Approach for the "additional comparable" required by the lender. I feel three closed comparable sales based on the subject's current improvements are necessary to be in compliance with USPAP, not just one. If I complete a 1004D stating "conditions or requirements as stated in the original appraisal report has been satisfied with the additions of the 900 SF unfinished bonus room being finished to living area and a workshop added", include pictures and a new sketch, and a Sales Comparison grid reflecting the changes with 3 closed sales (all within one year of the new effective date, preferably 6 months), would this be acceptable for the new assignment and in compliance with USPAP?

Ms. Cathy,

For clarities sake, the prior conditions were not satisfied because the attic was finished instead of unfinished, or the shed was added. The prior conditions were satisfied but however, then even more was done up and above the required conditions that caused the improvement to not be the irmprovement that you based your prior HC on. Careful on the wording.

Given the "Update" is a new assignment, there are no requirements regarding your reporting method in order to answer if the not declined statement is true or false. But I would think doing that by trying to hodge podge together a USPAP compliant report on this one using the 1004d form would be more work than just using a fresh 1004 would be. Not only that, all sorts of little things can trip you up if you are not 100% USPAP aware. Like for instance the certifications on the 1004d do not meet USPAP minimums for a new assignment. It's up to you and your level of confidence in working with a form that is an abortion to start out with. But everything, even your H&BU statement now have to be reaffirmed over again. Your entire market comments have to be correct for your market now... not the one in the past. New time adjustments... the entire shebang.

Personally, I think the typical appraisers odds of trying to adapt that 1004d for this situation would end up with USPAP violations all over the place due to all the possible oversights involved. But it's your call.

Webbed.