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cost approach on Condex (Twoplex??)

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Ted Markow

Junior Member
Joined
Nov 14, 2003
Professional Status
Licensed Appraiser
State
New Hampshire
LO forwarded me an email today from his lender syaing that they need the cost approach done on a condex I recently appraised. Also it was included that the cost approach was needed to verify that the hazard insurance was enough to cover a loss. To me this presents a few problems. 1. The 1073 does not provide for the cost approach and for obvious reasons. 2. The costs approach is intended to be a means of either demonstrating value or supporting one of the other approaches on a URAR not for determining adequate insurance levels. 3. Hazard insurance on a complex is on the entire building not a individual unit and the cost is bared equally byt the 2 owners. would i have to do it on the whole building and if so would I not need to inspect the other unit to do it properly? Hmmmmmm. Maybe it should be behind door #4 Nope!
 
To me this presents a few problems. 1. The 1073 does not provide for the cost approach and for obvious reasons.
If you choose to accept the new assignment, you can use regular paper.

The costs approach is intended to be a means of either demonstrating value or supporting one of the other approaches on a URAR not for determining adequate insurance levels
I don't think that is true. Replacement cost new is a very common basis of insurance coverage. Lender use the RCN from appraisal reports for insurance decisions every day.
 
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