Chasing Insurance Info. - GB

[jay trotta]

During a recent search for some insurance on one of the investment properties, it became veery interesting - the dwelling is huge (5080 SF) and this one fellow noted that a minimum he would use for replacement cost was around $600,000 - no seeum quote. Said he looked up the data "on line"

So, Greg, alot of your questions lately involve the CA and I found this soo interesting I thought I would pass it along to you. Q-is there really a need today (in the land of technology) to supply any Lender with what is no longer required ?? Remember the dwelling is the Insurable factor, not the land.

 

[c w d]

Yes, it defers some of their cost of doing business onto us. So, the cost approach is necessary.

 

[jay trotta]

cwd
how many cases can you note where Lenders have gone after appraiser's just in regards to the CA ???

 

[Restrain]

If the lender decides it's appropriate, then it's appropriate.

 

[Mike Boyd]

Might be interesting to also look up the info on line and see what type of methodology they use. Maybe it is a link that you could include in your report INSTEAD of doing the cost approach when the client whines about it.

 

[Couch Potato]

cwd
how many cases can you note where Lenders have gone after appraiser's just in regards to the CA ???

At least one made the news a while back in Florida. The judgement against the appraiser was substantial. :new_all_coholic:

 

[jay trotta]

Tater
got a link ?

 

[timd354]

If the lender decides it's appropriate, then it's appropriate.

The lenders, in most cases, do not want a cost approach for valuation purposes. They want it to use to determine if the hazard insurance coverage is sufficient....they are just too lazy and/or too stupid to lay that responsibility on the insurance company, which is where it belongs. If the lender wants to hire me to prepare an estimate of the replacement cost for the purposes of determining insurable value, I would be glad to do so, but most people who order the appraisals are too ignorant to even know what that means and too cheap to pay any additional fee to have me prepare such an estimate. The cost approach is not at all credible at all for valuation puroposes for older properties and/or for properties in areas with no available building lots. I appraise many 100+ year old rowhouses, semi-detached and detached properties in Baltimore and Washington, DC, and in neighborhoods where there are no available building lots...the lenders request that I do the cost approach on these properties all of the time, supposedly for valuation purposes....what a complete and utter joke that is. Its a complete sham and is just another way to try to hang more liability on the appraiser.