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Do you put cost to cure $ in the grid?

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New Orleans Guy

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I did a report on a house that needs TONS of work, and submitted it "subject to the repairs on the hypothetical that repairs are completed" with a list of repairs in the addendum and my guess as to what each one would cost to cure for a total of $80,000. I of course stated that I am not a licensed contractor and one should be consulted for a more accurate cost to cure.

Now the client (rhymes with "wantrix") wants me to add a cost to cure to the grid and do it as "Subject to based on the extraordinary assumption that the condition does not require repair" and add the cost to cure to the grid. I told them that I did not want to add a dollar amount to the grid since I don't believe it to be accurate, They said they want it anyway with a disclaimer that it is not accurate in the addendum so that, (I quote them) "that way you are off the hook". What would you do?

I am considering declining all requests from the N.O. area since I am constantly dealing with this type of crap.:fiddle:
 
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Marcia Langley

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I did a report on a house that needs TONS of work, and submitted it "subject to the repairs on the hypothetical that repairs are completed" with a list of repairs in the addendum and my guess as to what each one would cost to cure for a total of $80,000. I of course stated that I am not a licensed contractor and one should be consulted for a more accurate cost to cure.

Now the client (rhymes with "wantrix") wants me to add a cost to cure to the grid and do it as "Subject to based on the extraordinary assumption that the condition does not require repair" and add the cost to cure to the grid. I told them that I did not want to add a dollar amount to the grid since I don't believe it to be accurate, They said they want it anyway with a disclaimer that it is not accurate in the addendum so that, (I quote them) "that way you are off the hook". What would you do?

I am considering declining all requests from the N.O. area since I am constantly dealing with this type of crap.:fiddle:

No, this does not make sense.

With repairs your opinion is either "subject to the HC that the repairs have been completed" (like you said you already did) or "as is and compared to other lower value houses that also need repair" which would eliminate most of the need for grid adjustments. Your "cost to cure" is a list of repair costs, not a market value grid adjustment amount.

The market reaction most likely will be different than the estimated cost, probably more detrimental to value.

Two more things, if it's on a new Fannie form Fannie rules say that certain repairs must be made 'subject to repair', be sure you know what those are.

Also, be careful in estimating large amounts of repairs. Your disclaimer may not protect you.

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Also, there would not be an extraordinary assumption that the repairs would not be needed. You have already identified the repairs as being value affecting. so it would be "as is" or subject to repair which is the hypothetical condition you used in the first place.
 
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Mike Boyd

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Retired Appraiser
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I will often put the cost to cure in the CONDITION grid. I.E., if it needs new carpet, I might type in Av/carpet and then put a negative adjustment in which would amount to my estimate of carpet replacement. However, $80,000 is a very large amount to limit it to condition. What they have asked for, however, is not unreasonable in the manner which you expressed it. When adjusting for essential repairs, I always add an amount for the risk and inconvenience a buyer would be subjected to if he took the property as is. I will often DOUBLE the actual cost estimate for risk and inconvenience.
 

TJSum

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Maryland
It sounds like they are asking you for an "as is" value ??? Why would you put it into the grid if it were "subject to" ???
 

New Orleans Guy

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I cannot believe they wanted me to proceed on this thing. The cost to cure is like half the value. I honestly tried to "kill" this assignement. Lately they (Chase/Wells) want an appraisal no matter what is wrong with a cost to cure added to it. I am sick of showing up at a SFR that is really a double with missing walls and a bucket in the kitchen to do dishes in.
 

CANative

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Professional Status
Retired Appraiser
State
California
We need to start insisting that they clarify the intended use of the appraisal and get some more details. The Quantrix ordering system does not clearly define appraisal requirements but it has been my experience that if the report cannot be made "as is" with no conditions then the AMC/Client/Lender needs to be called before proceeding.
 

bart nathan

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I hope your getting more than 200.00 for this
 

New Orleans Guy

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Louisiana
I finally got a pair and e-mailed them back with my true feelings. This is what I wrote.

"I cannot put a cost to cure that large in the grid. It would be an intentionally misleading report, since I am positive that my cost to cure is going to be way off. This house really needs a construction loan in my opinion, but I know that is a lender decision."
 

New Orleans Guy

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Certified Residential Appraiser
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Louisiana
I hope your getting more than 200.00 for this

I am getting the premium $225. I feel like I need a shower now.
I guess I will have that Escalade work truck in no time.:laugh:
 

New Orleans Guy

Thread Starter
Junior Member
Joined
Feb 8, 2006
Professional Status
Certified Residential Appraiser
State
Louisiana
We need to start insisting that they clarify the intended use of the appraisal and get some more details. The Quantrix ordering system does not clearly define appraisal requirements but it has been my experience that if the report cannot be made "as is" with no conditions then the AMC/Client/Lender needs to be called before proceeding.

This one was done and now that want me to change it.m2:
 
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