Contract for a new roof after closing

[timindp]

Completed an FHA purchase on a townhome. I appraised it "as is". Agent is wondering why I didn't give any value of the home potentially having a new roof. Buyer has a contract for a new roof to be installed after closing. Though I appraised the home as is, since I felt that roof contracts can be broken for any reason. I thought about Hypothetical condition, then i decided against that since the roof is being replaced after closing and there is no guarantee that the contract for the roof will stay in place. Then my hypothetical condition would be false. Am I wrong?

 

[sputnam]

Completed an FHA purchase on a townhome. I appraised it "as is". Agent is wondering why I didn't give any value of the home potentially having a new roof. Buyer has a contract for a new roof to be installed after closing. Though I appraised the home as is, since I felt that roof contracts can be broken for any reason. I thought about Hypothetical condition, then i decided against that since the roof is being replaced after closing and there is no guarantee that the contract for the roof will stay in place. Then my hypothetical condition would be false. Am I wrong?

You were correct. What is going to happen later isn't relevant to an as-is current market value appraisal.

 

[J Grant]

Completed an FHA purchase on a townhome. I appraised it "as is". Agent is wondering why I didn't give any value of the home potentially having a new roof. Buyer has a contract for a new roof to be installed after closing. Though I appraised the home as is, since I felt that roof contracts can be broken for any reason. I thought about Hypothetical condition, then i decided against that since the roof is being replaced after closing and there is no guarantee that the contract for the roof will stay in place. Then my hypothetical condition would be false. Am I wrong?

No HC, the Real estate agent is clueless.. What happens after closing does not affect the appraisal. If our client agrees the appraisal should be made subject to X condition and that typically gets fulfilled prior to a closing.

IDK wh an appraiser would consider making an HC for something that would take place after closing...

 

[Tom4value]

Completed an FHA purchase on a townhome. I appraised it "as is". Agent is wondering why I didn't give any value of the home potentially having a new roof. Buyer has a contract for a new roof to be installed after closing. Though I appraised the home as is, since I felt that roof contracts can be broken for any reason. I thought about Hypothetical condition, then i decided against that since the roof is being replaced after closing and there is no guarantee that the contract for the roof will stay in place. Then my hypothetical condition would be false. Am I wrong?

Hum, talk to the lender. The problem I see is that FHA requires that you attest that the roof has at least 2 years of life left. That is tough to do if you know that they already have a contract to replace it. Therefore, “as-is” would be a problem. On the other hand, “subject to” is probably a problem for the lender if it is being done after closing.

 

[Dublin ohio]

Completed an FHA purchase on a townhome. I appraised it "as is". Agent is wondering why I didn't give any value of the home potentially having a new roof. Buyer has a contract for a new roof to be installed after closing. Though I appraised the home as is, since I felt that roof contracts can be broken for any reason. I thought about Hypothetical condition, then i decided against that since the roof is being replaced after closing and there is no guarantee that the contract for the roof will stay in place. Then my hypothetical condition would be false. Am I wrong?

If the new roof is a condition of the contract. It shows up in you contract analysis and move on.