Clandestine - Drug Property

[Davy]

After several weeks, the client has emailed me requesting me to continue with the appraisal under the extraordinary assumption that the property has had adequate remediation, and there are no issues for health concerns present. While that sounds fine and good, it still leaves me with the reputation of the property as a drug production property, whether it was marijuana or meth production. The STIGMA is still an issue that I don't know how to address.

My question - and I really appreciate input here, should I continue with this assignment? I don't feel qualified, nor do I have the data necessary to determine fair market value of a such a property. They are convinced I should go forward as a regular single family residence (it's really a camp with no good water or sewer), and the whole scope of work has changed, yet they are adamant that I accepted the assignment so I need to finish it. We have been going back and forth since the initial July inspection.

Since you didn't state whether or not this was an AMC or a lender, or whoever, I'll weigh in from a lender's perspective: you may be the only appraiser they have to complete an appraisal in that area (or you are the best appraiser they have in that area and think you are able to handle the assignment). Or they consider you a chump and only hope you will fall into taking the assignment. From a lender's perspective, I would think the former is true.

Anyway, what strikes me as odd is their seemingly ignorant request to appraise the property under an extraordinary assumption when this is clearly a hypothetical condition situation--there is a distinct difference and they need to know why this cannot be legally appraised another way. Most lenders won't take an appraisal for their default department under anything other than "as is." They can't have a "subject to" box checked because it screws up their UW process, but that isn't your problem, it's theirs. I personally would take the assignment ONLY if they were willing to accept an appraisal written under a hypothetical condition ("subject to") in this case, but if not, I would tell them I cannot complete the assignment due to the factors affecting the subject property. Let's face it, you identified the reasons appraising this property is a problem: remediation costs for possible chemical contamination, "stigma", maybe your safety(?), yadda yadda. If you do strike an agreement with them, make sure you charge accordingly and keep it under an hypothetical condition. Otherwise, keep refusing and tell them over and over why the appraisal cannot be made "as is." That's my $0.02 anyway.

 

[J Grant]

Of course the property can be appraised as is. The fact that the OP may not feel competent to do so, or may not want to, is another matter. A lender owned REO is almost always appraised AS IS.

EA has to have a reasonable basis for belief. If client is saying remediation has been done, then ask to see proof of it. If not, turn it down. How can you make an EA that remediation has been done with no basis to believe it was done?

If they did the remediation and can show you a report or letter, then that end is taken care of, still have stigma left to deal with. Which the OP will either feel competent to address, or not.