Cost Approach Help - New Construction

[redcedr]

Doing an appraisal on home under construction "subject to completion". Has about 15k in site improvements (concrete driveway and sod). First the reviewer has me take the 15k out of the Site Improvements line as it states "As Is", and they're not complete. So, I added a line below that with "Site Improvements — Prospective: $15,000". Evidently, they don't like that either. Never been questioned on this in 20 years... Any help on how Fannie wants this done is appreciated...

 

[J Grant]

Doing an appraisal on home under construction "subject to completion". Has about 15k in site improvements (concrete driveway and sod). First the reviewer has me take the 15k out of the Site Improvements line as it states "As Is", and they're not complete. So, I added a line below that with "Site Improvements — Prospective: $15,000". Evidently, they don't like that either. Never been questioned on this in 20 years... Any help on how Fannie wants this done is appreciated...

The reviewer is a moron. Sometimes appraisers have to educate the folks on the other end.

 

[Dublin ohio]

The reviewer is a moron. Sometimes appraisers have to educate the folks on the other end.

That is an insult to morons

 

[ucbruin]

Just do as the reviewer requests....
Other than the reviewer and you....
No one gives a crap about the cost approach....

 

[Surf Cat]

The whole appraisal report....not just line items, needs to be prepared on an "as completed, subject-to" basis, not a hybrid of "as is" and "prospective" values.

I'm assuming that 15K is in the cost breakdown along with the plans and specs? That's what you put in the as is line of the cost approach..... you had it right the first time.

Remove the "$0 As Is" and "Prospective: $15,000" split language entirely.
Enter $15,000 directly on the Site Improvements line, since the whole report already reflects completed condition.
In the report comments, state that the driveway and sod are not yet installed but are included based on the builder's plans and specs/cost breakdown, consistent with the subject-to-completion designation. This is the way it should be done....

 

[George Hatch]

Write the comment on pg 3: "The property is valued in the Sales Comparison and Coast Approaches subject to completion per plans and specs."

You're valuing the property, not just the primary structure.

 

[Bob Ipock]

Water and sewer connections and fees, or well and septic costs are also site improvements.

 

[Zoe]

Write the comment on pg 3: "The property is valued in the Sales Comparison and Coast Approaches subject to completion per plans and specs."

You're valuing the property, not just the primary structure.

Yes and as of effective date of inspection. Like it is already completed on that day. Imagine already done on effective date. We are doing concurrent value opinion as of the date of inspection. "subject to" not "as is".

They could do an "as is" but that is different ballgame.

On many commercial assignments, the appraiser has to do both "as is" and "subject to" in one appraisal.

 

[George Hatch]

The long form explanation is "subject to completion per plans and specs as of today". It's an HC. Not an EA.

It isn't complete as of today so we're using the HC for the purposes of analyses and comparison.

 

[John Hassler]

I’ve always read “as is” value of site improvements to mean their depreciated value.