Change in GLA from Plans & Specs

[David Dietz]

Cathy,
Just out of curiosity what county in FL is this home located? Is the market in a state of decline?

 

[Richard Carlsen]

Whether a different appraiser or the original appraiser performs the C.C. inspection - the 1004D C.C. section, AND IN THE CASE OF THIS THREAD, the subsequent ROV section, require the current improvements are the improvements contracted for, described, and valued in the orig report.:icon_idea:
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In this case, I would submit that the current improvements only have to be substantially similar. In this case, the structure has not been changed; only the interior finish along with a market acceptable addition of a workshop.

A comment on the additional interior finish and the additional workshop is all that is necessary along with a dozen photos will do the job nicely, thank you. (And be fully acceptable to FNMA.)

 

[PropertyEconomics]

Richard I believe you continue to have it correct.

It would be rediculous to believe that EXACT would ever be used because nearly every single home is modified during construction from plans and specs. This home was merely modified with the additional finished area being realized. If the term EXACT were to appear in the verbage, nearly ever single appraisal from plans and specs would require a second appraisal "as complete" and we know that not to be the case. Arguments will continue here among all who are honest and ethical and we can all agree it is a new assignment given the circumstances we will just disagree on how it MUST be reported. I believe that to lie with the individual appraiser and as long as they are not misleading in their reporting they are in compliance with USPAP.

 

[Richard Carlsen]

Thanks PE

That's twice in the present decade I've been right.

This is, I believe, another example of the appraiser reading and parsing his own thoughts into something that is not a big deal.

Why? Two reasons:

#1) It is a reaction to that old license bugaboo, law suits and state investigations/enforcement. This has of course been demonstrated over and over to be nothing more than crying wolf.

#2) It also tends to attempt to make the appraiser appear to the client and perhaps those posting on certain BB's, (the names of which won't be disclosed) to be more knowledgeable than the average appraiser. A sort of self-aggrandizement if you will. Rather than concentrating on fulfilling the needs of the client as requested, this position seems to concentrate on setting forth reporting requirements that simply do not exist.

 

[RSW]

In this case, I would submit that the current improvements only have to be substantially similar. In this case, the structure has not been changed; only the interior finish along with a market acceptable addition of a workshop.

A comment on the additional interior finish and the additional workshop is all that is necessary along with a dozen photos will do the job nicely, thank you. (And be fully acceptable to FNMA.)

Small changes like vinyl to tile in the kitchen may be ok. But, when there is a 900 sf. ft. difference in the GLA and a large workshop has been added: That is another story.

I believe we all will have to agree to disagree on this one and should put this to rest.

There is not need to beat a dead horse.

 

[PropertyEconomics]

Small changes like vinyl to tile in the kitchen may be ok. But, when there is a 900 sf. ft. difference in the GLA and a large workshop has been added: That is another story.

I believe we all will have to agree to disagree on this one and should put this to rest.

There is not need to beat a dead horse.

The only thing we are in disagreement on is reporting ... we all agree on most of the other issues.

 

[Richard Carlsen]

With an additional 900 SF in the GLA plus an extra workshop building, the appraiser could, based on normal analysis, state that the value is greater than that based on plans and specs.

The assignment does not call for a new value number. It calls for a value of at least that of the original appraisal or greater. That can be done with a statement of the additional finish and building and certification that value is at least that of the original appraisal.

It does not call for a new value. The statement that the value is at least that of the original appraisal is the value for this report as an update.

That is all the client needs and wants to know. After looking at the beautiful photos of the additional new rooms and workshop, the client might want to pinpoint the value by calling for a new assignment but it not they can well live with the statement of the report as ordered.

 

[Jalexi]

Quick question:

If the original apparaisal was done in January of '08 why wouldn't the borrower want a new appraisal done?

 

[PropertyEconomics]

Quick question:

If the original apparaisal was done in January of '08 why wouldn't the borrower want a new appraisal done?

Probably because they dont need one is my guess. I dont know their lending requirements regarding the date of appraisal for new construction. It certainly could have been a question that the OP could have asked them. ie ... Since this appraisal is now 8 months old do you need a new report as complete or will the final inspection be enouh?

 

[Jalexi]

Probably because they dont need one is my guess. I dont know their lending requirements regarding the date of appraisal for new construction. It certainly could have been a question that the OP could have asked them. ie ... Since this appraisal is now 8 months old do you need a new report as complete or will the final inspection be enouh?

I'm pretty sure if I was sitting in Fla with the real estate market in the shape it's in I'd pony up another $375 to have a more current estimate of value.