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cost to cure question...

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Ramona

Thread Starter
Sophomore Member
Joined
Feb 3, 2002
Professional Status
Licensed Appraiser
State
Maryland
This might sound a bit on the trivial side, but it's bugging me. I have an attached home refi conventional assignment, in generally average condition. All of the carpeting was excessively soiled (to the point where you would be horrified at the thought of walking barefoot on it), but nothing looked like a stain that would probably not steam clean out. Walls were filthy as well, but paint didn't appear damaged. Do you guys generally include a professional cleaning cost to cure for this situation, or is that a bit more nit-picky than we should be getting? I don't want to be a jerk, but also don't want to neglect something that I should be mentioning.
 

Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
I encounter floor covering like that occasionally...... usually in rental properties or newer REO's. I simply state "The carpet was visibly soiled and stained and in need of cleaning, but appeared to be in average condition." I estimate a cost to cure, normally $200-400 depending on the SF of the soiled area and make an adjustment. I also keep in mind what "Average" is for the immediate area. I've done the same thing for walls when it appears that a bottle of Fantastik will clean it up....of course, that's also a cost to cure.....Bucks doesn't do windows or walls.....only appraisals. :)
 

Ken in Arkansas

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I agree with Bobby, typically the cost to have the carpet cleaned (cost to cure) is the appropriate adjustment, and it is treated as deferred maintenance. The definition of "deferred maintenance" that I have always operated under is "repair or replacement items that the typical purchaser would repair or cure immediately upon acquiring the property". Keep in mind however that perception is everything. If the overall physical condition of the property is so bad that everywhere the typical purchaser would look he sees something that needs repair or replacement, the cost to cure may graduate from cleaning the carpet to replacement of the carpet. Handle it as the typical purchaser in your market would handle it.
 

jtrotta

Senior Member
Joined
Jan 16, 2002
When I was in the insurance industry, we had a local cleaning service that would do (smoke damage-from fires or furnace puff backs) and they were truly wonderfull; they had chemical sponges that could clean up any wall or ceiling like new. Don't know if you have any company's out your way like that, but we could call and get a "ball park-estimate" just for general info. purposes.

Good Luck

8)
 

brunge

Sophomore Member
Joined
Aug 24, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Your description sounds a little vague (you wouldn’t walk on it with bare feet, but it will probably come clean? It sounds very bad).

I consider repairs, or cost to cure, from the perspective of “readily marketable condition”. That is, how does the condition of the subject dwelling compare to a typical dwelling in the area that is being marketed for sale. As a rule, if the carpet is as bad as you described, it needs to be replaced @ $12-$20+ a square yard depending on the quality of the dwelling it’s going into. Painting is not inexpensive either. Paint does not have to be peeling to need a fresh coat.

If 95% of the dwellings in a particular complex are in poor shape, that doesn’t mean poor equals average. Average condition is what a typical purchaser would expect to see when they preview a dwelling that is for sale throughout the entire subject market area. My experience is that sellers generally spiff up the houses before they sell.
 

airphoto

Senior Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Pennsylvania
Good answer, Brian ..

One Caveat: If your condition is 'less than normally marketable condition' and you enter a cost to cure, you'll now have new carpet and freshly painted walls .. which prolly places the property into the "Average (+)" condition when compared to 'normally marketable condition.'
 

brunge

Sophomore Member
Joined
Aug 24, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Hey airphoto,
You would not want to require repairs and make an adjustment for the repairs as if they were not completed.

If you specifically require the repairs to be done, the dwelling would be in good-average condition (depending on the condition of the rest of the dwelling). If you simply describe the condition and do not make a specific requirement than the condition would be stated as poor, fair, or below average, etc...
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Ramona, .... My guess is that these residents have had this "condition" for a long time. Never once in the last several ( when did they move in ? ) years have they ever made one step toward cleaning up the place.....and now, .... they are willing to have an appraiser come in and observe the home ? You have probably been told that the clean up of carpet and walls is something they are "going to do with the re-fi money". I highly doubt it ! Often it may just be one item or two which throws everything for a loop and rest of property is o.k. If you can comfortably call it average, that's fine, and just be very sure you make explicit verbal comment to the factors of carpet filth and dirty walls, even if that means you get a couple of interior photos. "As is" and plenty of commentary will do, and this will propbably be one of those reports where you MUST speak to every list and/or selling agent and find out if any of your comparables had similar conditions and use them in the grid. If the other comps were similar, then all might be "average" for the neighborhood. If they were clean and neat with nice carpet and walls then they also might just be average and your subject may be "below average" and speak about possible cost-to-clean walls and replace carpet and this could be a few $thou. on the Condition line and explain why.
 

airphoto

Senior Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Pennsylvania
Brian ..

We're still in agreement. Keep in mind that "we" do not require repairs! You're correct .. the terminology is "as is" or "subject to!" Subject to the cleaning/repairs the property is probably in 'Average (+)' condition .. but may or may not be a dollar-for-dollar adjustment when compared to the cost of the carpeting, painting, etc.
 

Jim Joseph

Freshman Member
Joined
Jun 11, 2002
I think that some of the comments are a little out of line in suggesting on how people should be living. I mean if that is their life style, then they are entitled to live with dirt. Some of the comments I read have put me in hot water with one of the three top national financial institutions and on probation for six months. Just state what you see, give an opinion on average market rate to cure or repair if need be and let the people live their lives. I am sometimes very, very put off and offended at the conditions I encounter but then I can see the house thruogh the mess. I may even tell the occupants (as if they didn't know I was coming) that there may be a cost to cure on the restoration/clean-up on the appraisal. Make the call. You are licensed.
Good day,
Jim Joseph
 
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