Cost to cure

[E E]

Can someone explain how exactly we can get cost to cure on an appliance not working in a home, when we arent sure what about the appliance is broken, and also why a cost to cure has to be given if the appraisal is subject-to the appliance being fixed and under the hypothetical condition that the appliance is fixed?

 

[Mark K]

...and also why a cost to cure has to be given if the appraisal is subject-to the appliance being fixed and under the hypothetical condition that the appliance is fixed?

That's doesn't make sense....it should be one or the other.

"The appraised value is subject-to repair or replacement of the appliance."

or

"The value is based on the HC that the appliance is working properly".

Not both.

Can someone explain how exactly we can get cost to cure on an appliance not working in a home, when we arent sure what about the appliance is broken,

Wait for a repair estimate or include an estimate of the cost to replace the appliance. Have the client chose which option they want.

 

[George Hatch]

Subject-to some repair or other remediation is virtually always a hypothetical. We know the stove is inoperable, but if it wasn't then this is what the value would be.

An assumption would be if we had reason to believe that the stove was operable but we couldn't be sure because we couldn't test it. That's not the situation being described in the OP.

As for the cost to cure, the most it can be is the cost of replacing the unit. "Estimated cost to cure or replace this Q3 stove is less than $1200. This is not enough to significantly affect the value or marketability of the subject in this price range."

 

[E E]

I apologize, thank you for catching my mistake. Thank you for the answer also

 

[Tom4value]

Can someone explain how exactly we can get cost to cure on an appliance not working in a home, when we arent sure what about the appliance is broken, and also why a cost to cure has to be given if the appraisal is subject-to the appliance being fixed and under the hypothetical condition that the appliance is fixed?

FHA requires the appraisal subject to the appliance being fixed or replaced. They also want a cost to cure. I agree, dumb. I guess it is so they know what is involved but the value is based on "as-repaired".

For CTC, I don't bother with determining a cost for a kitchen appliance or even a hot water heater being repaired. I provide the cost to replace. Marshall & Swift provides the actual cost and factors in any cost for installation.

 

[sputnam]

Can someone explain how exactly we can get cost to cure on an appliance not working in a home, when we arent sure what about the appliance is broken, and also why a cost to cure has to be given if the appraisal is subject-to the appliance being fixed and under the hypothetical condition that the appliance is fixed?

google it. There will be plenty of estimates. It's good to be correct... but the requirement is that you support your opinions... not that your opinions always be spot on. It's also good to report cost to cure as a range.

 

[J Grant]

Cost to cure for a client is just a way for them to guage a worst case scenario /and or does the cost align in a reasonable range to the adjustment or impact on value ?

The cost to repair or replace a single typical appliances is usually too minor to impact value ( comment on it ) If an appliance is broken we can not estimate the cost to repair it, or if an owner would choose to simply replace it instead. So use common sense and estimate a low range ( typical service call plus labor ,) and the high range which would be replace with a new appliance ( whatever that is for the appliance easy to find appliances for sale online stores ).

A well informed buyer would typically not spend more to fix an appliance vs replacing it new, and many folks faced with a repair estimate over X$ opt to replace if the appliance is older.

 

[Carnivore]

Can someone explain how exactly we can get cost to cure on an appliance not working in a home, when we arent sure what about the appliance is broken, and also why a cost to cure has to be given if the appraisal is subject-to the appliance being fixed and under the hypothetical condition that the appliance is fixed?

You ask the Question and your post is in FHA/HUD VA Section of this forum

Cost of the Range is easy to determine on line at places like Home Depot or Lowes Home Improvements. Their cost usually include Delivery and installation

Why does a Cost to cure have to be included? The UW/FHA has to be sure there are sufficient funds available to mediate/repair the MPR/MPS

Subjects Properties are required to have a functional Kitchen

The Answers to any questions pertaining to any FHA assignment can be found in FHA 40000.1 MPR/MPS

https://www.HUD.gov/sites/dfiles/SFH/documents/Handbook 4000 1 Redline for 20230118.pdf

Minimum Property Requirements and Minimum Property Standards (04/18/2023) ..... 588 page 588

In your report list out all the repairs and estimated Cost

The Report market value is subject to any mpr or mps

It is very possible the lender will ask you to revisit the property and verify the MPR/MPS have been completed. You will send in a 1004D stating so

OTOH sometimes they don't send you a request. Often times the FHA UW will waive it

Curious? Is this your first FHA Assignment? Also, Were the Utilities turned on the Day of Inspection? That is a requirement the last time I checked, but its been awhile (months) since I have completed an FHA assignment so maybe they changed something