Cost to cure adjustment or subject to?

[mp2277]

FHA assignment, 2 baths up half bath down. One bath up is stripped to studs and is undergoing renovation. It is basically an empty room with some rough in plumbing and wiring. Reasonable estimate to complete the job is 10k. Should I submit subject to completion or make a condition adjustment and submit as is. I think it is a grey area and am leaning to as is cost to cure. Thoughts? Thanks!

 

[alebrewer]

I would engage your client to assist in that decision. From an appraiser's perspective, it could be done either way, so long as the area that is 'undergoing renovation' does not present a structural or health/safety concern.

 

[J Grant]

FHA assignment, 2 baths up half bath down. One bath up is stripped to studs and is undergoing renovation. It is basically an empty room with some rough in plumbing and wiring. Reasonable estimate to complete the job is 10k. Should I submit subject to completion or make a condition adjustment and submit as is. I think it is a grey area and am leaning to as is cost to cure. Thoughts? Thanks!

Ask your client .

 

[mp2277]

Ask your client .

Everyone involved (including me) wants it as is, I just don't want to get in FHA trouble. They have a tendency to be arbitrary in their decisions. I got in a pissing match with them once and even one of their reps at the Home Center agreed with me but once you get one of those "sanction letters" there is no way to appeal.

 

[J Grant]

Everyone involved (including me) wants it as is, I just don't want to get in FHA trouble. They have a tendency to be arbitrary in their decisions. I got in a pissing match with them once and even one of their reps at the Home Center agreed with me but once you get one of those "sanction letters" there is no way to appeal.

Why would you get in "FHA trouble?

If a client wants it as is, then make it as is. Deduct for any loss of value you attribute to the bath being unfinished and estimate a cost to cure.

 

[alebrewer]

Why would you get in "FHA trouble?

Because if the initiated renovations have created a structural or health/safety issue, the appraiser HAS to make the appraisal 'subject to' remedy of said issue(s).

 

[J Grant]

Because if the initiated renovations have created a structural or health/safety issue, the appraiser HAS to make the appraisal 'subject to' remedy of said issue(s).

Then that is another issue- he did not mention anything about that.

Most half bath renovations don't create a structural o health safety issue but only the OP knows the specific property

 

[alebrewer]

Then that is another issue- he did not mention anything about that.

Most half bath renovations don't create a structural o health safety issue but only the OP knows the specific property

you asked a question and I answered it.

 

[togatour]

Is this a hall bath or a primary bath? If the hall bath is the one...then your as-is report may have a functional issue as you would have to pass through the primary bedroom to access the only bath. Also do you have similar comparable sales (probably not a comparable with only one full bath located inside a bedroom.

Just had a similar situation and after sending the lender details and photos.....subject to bath repairs being finished was what they wanted.

 

[J Grant]

Is this a hall bath or a primary bath? If the hall bath is the one...then your as-is report may have a functional issue as you would have to pass through the primary bedroom to access the only bath. Also do you have similar comparable sales (probably not a comparable with only one full bath located inside a bedroom.

Just had a similar situation and after sending the lender details and photos.....subject to bath repairs being finished was what they wanted.

Every assignment is different, and a client can decide to make the subject or make it as is.