Denoting monetary value on driveway?

[kittydubya]

Morning all!

Had a question regarding specific requests on appraisals. Is it possible to request our appraisal to denote a monetary value on a specific item?

For context, we are building a new contruction home and our builder is worried if we get an asphalt driveway it will drive the cost up and the house won't appraise at that value. He recommends a gravel driveway. We do not want a gravel driveway because it doesn't fit in with the neighborhood. Our realtor looked at comps in the area and disagrees with our builder. She believes the house will appraise at the value with the driveway.

The builder asked us to include a generic statement in our contract stating something to the effect of us waiving out right to void if the house does not appraise at the value with the asphalt driveway.

Our lender recommended against this and said we needed to be more specific in this statement. Meaning "if the house doesn't appraise specifically because the driveway then we agree to pay the difference out of pocket...but if the house doesn't appraise for any other reason we reserve our rights". That way if the house doesn't appraise for any other reason (i.e. builders fault) then we still have options to back out/negotiate.

I tell all of that to ask: Our realtor says denoting a value to the driveway is not an option on the appraisal forms she's seen. Is this something we can specifically request our appraiser to do?

(Edited to add: It may also be helpful to denote that our lender is requiring a pre-contract appraisal (based on schematics and specs of builders intended build) as well as a final appraisal after the structure is built. So this question may be more relevant/applicable to the pre-contract appraisal)

Thank you!

 

[J Grant]

No you can not request it, or put it this way, you can request anything you want but the appraiser can not do it . What you are talking about above is what belongs in the sales contract.

 

[kittydubya]

No you can not request it, or put it this way, you can request anything you want but the appraiser can not do it . What you are talking about above is what belongs in the sales contract.

Thanks for this reply! I wanted to reword my question a bit differently because I interpreted your response to be about the verbiage in the sales contract versus specific to my appraisal question.

Will the appraisal (or can it) distinguish why the overall appraisal equaled a certain amount. Meaning will there be any way for us to know that it appraised low or high "because of" a particular driveway choice?

 

[J Grant]

Isolation a driveway contribution is too specific for an appraisal and an appraiser can not accept an assignment based on a predetermined value amount or other instruction about value-not for lending purposes at least

 

[kittydubya]

No you can not request it, or put it this way, you can request anything you want but the appraiser can not do it . What you are talking about above is what belongs in the sales contract.

It may also be helpful to denote that our lender is requiring a pre-contract appraisal (based on schematics and specs of builders intended build) as well as a final appraisal after the structure is built. So this question may be more relevant/applicable to the pre-contract appraisal

 

[kittydubya]

Isolation a driveway contribution is too specific for an appraisal and an appraiser can not accept an assignment based on a predetermined value amount or other instruction about value-not for lending purposes at least

Makes sense! Thank you! This will help inform my conversations with the lender and our builder. I appreciate your time

 

[Mark K]

If paved driveways are typical in the neighborhood and your house has gravel, its more likely that your value will be negatively affected compared to the comps.

I'd be suspicious of a builder that tells you that the house might not appraise because you want to include an amenity that is typical for the area. BTW, in many neighborhoods, a paved drive is required by covenants.

 

[Tawfik Ahdab]

The other replies you received were more than adequate but I’m going to add one thing.

In appraisal, there is an economic principle that has great prominence in our thoughts. It’s called the principle of contribution.

This principle holds that the value of a individual component or improvement Is measured in terms of its contribution to the whole, and not to the cost of the individual component.

 

[Lee Lansford]

Is there something extremely extraordinary regarding the total area of the proposed driveway? Just wondering. In general, where paved driveways are the norm and buyers expect to have such, a gravel driveway will suffer in comparison.

 

[Terrel L. Shields]

Driveways are not something appraisers consider normally, but if they do, they would (imnsho) typically lump it with the site improvements as a line item adjustment, otherwise invisible to the market. So if the contract construction bid drives the price beyond the price of other comparable houses, your builder is likely correct. So you might consider having them do the gravel and just build the driveway out of cash later.