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Does This C5 Rating Sound Right?

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GMG

Freshman Member
Joined
Apr 26, 2017
Professional Status
General Public
State
Florida
I have a house under contract with the intention of renting it out. The current owner had been renting this house, but had to evict the last tenants. As sometimes occurs there is some damage that needs to be repaired. The contract I have for the house is an "AS-IS" contract. I had the house inspected prior to having the bank appraise it (I was more interested to see if I had missed needed repairs than that the value would not be above what I was paying). The inspection went as I expected, and the issues/repairs needed were in line with what I saw myself.

After that process I paid for the lender to order the appraisal. Here is where things may be going badly for me. The appraiser indicates the following:

"Subject To:
This report is based on the hypothetical condition that the subjects unfinished constructionsd items are complete in a workmanship like manor. The use of hypotheical condition may affect assignment resutls.

Items to be finish include:

Baseboard throughout the home
Replace Missing Flooring
Finish installation of double doors to bedroom
Repair Damaged/Unfinished Drywall
Replace missing closet doors
Install Electrical face plates adn A/C vents

The subject is currently in C5 condition by definition. Once completed the subject will be in C3 condition."

I have read the definitions provided for C3/C4/C5 and I'm trying to understand the C5 rating. Some of the subject to repairs seem petty (electrical face plates and A/C vents - all in a pile - present and accounted for; Baseboard was pulled out of the 3 bedrooms for painting and replacement - cosmetic repairs; Replace missing Closet doors - all are in the house just not hanging in the expected place).

Is the fact that 6 floor tiles (matching extra tiles are in the house and just need to be put in place), a 2x3' sheet rock repair needs to be complete, and sheet rock and trim needs to be installed around double doors to an extra room enough to drop the condition from a C3 to a C5? That seems like a big drop, and the C5 has the loan in jeopardy.

Thoughts?
 

JTip

Elite Member
Joined
Oct 12, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
I think the appraiser forgot about C4 rating (or mistyped).
 
D

Deleted member 134708

Guest
If they did it subject to. It needs to be reported as C3.

If they did as-is then C5 (using their opinion) I would have done C4.

Another appraiser taking it upon themselves to do subject to when no one asked for subject to.

It should of been done as-is, C4 with cost to cure items.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Missing electrical face plates is a safety issue. Would you want a infant family member crawling around and sticking their hands in the electrical boxes or falling in A/C vents?
 

JTip

Elite Member
Joined
Oct 12, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
Does the house you are purchasing REALLY fit this criteria, even after the noted repairs?

The improvements are well-maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well-maintained.


Note: The improvement is in its first-cycle of replacing short-lived building components (appliances, floor coverings, HVAC, etc.) and is being well– maintained. Its estimated effective age is less than its actual age. It also may reflect a property in which the majority of short-lived building components have been replaced but not to the level of a complete renovation.


If I put C3 on a house, it darn well better be well maintained, emphasis on WELL.
 

glenn walker

Elite Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
California
C-4 Subject to the repairs.
 

GMG

Freshman Member
Joined
Apr 26, 2017
Professional Status
General Public
State
Florida
Does the house you are purchasing REALLY fit this criteria, even after the noted repairs?



If I put C3 on a house, it darn well better be well maintained, emphasis on WELL.


To be honest, I don't agree about the C3 after just the repairs mentioned in the subject to section. There are other cosmetic issues that will be addressed that, once done, will bring it to a higher C4 to maybe a low C3. But as it is now, I'm not sure about the C5, hence my post.
 

GMG

Freshman Member
Joined
Apr 26, 2017
Professional Status
General Public
State
Florida
Missing electrical face plates is a safety issue. Would you want a infant family member crawling around and sticking their hands in the electrical boxes or falling in A/C vents?

I agree with these being safety issues. However I think you missed the part of my original post where I indicated "electrical face plates and A/C vents - all in a pile - present and accounted for". They just need to be screwed back on the walls.

Also, this is a Florida house where it is sitting on a slab, and the A/C vents are in the walls and not quite the same safety hazard as if they were in the floor as is found in some northern houses.

Either way, would that push the condition down to a C5?
 
D

Deleted member 130081

Guest
I have a house under contract with the intention of renting it out. The current owner had been renting this house, but had to evict the last tenants. As sometimes occurs there is some damage that needs to be repaired. The contract I have for the house is an "AS-IS" contract. I had the house inspected prior to having the bank appraise it (I was more interested to see if I had missed needed repairs than that the value would not be above what I was paying). The inspection went as I expected, and the issues/repairs needed were in line with what I saw myself.

After that process I paid for the lender to order the appraisal. Here is where things may be going badly for me. The appraiser indicates the following:

"Subject To:
This report is based on the hypothetical condition that the subjects unfinished constructionsd items are complete in a workmanship like manor. The use of hypotheical condition may affect assignment resutls.

Items to be finish include:

Baseboard throughout the home
Replace Missing Flooring
Finish installation of double doors to bedroom
Repair Damaged/Unfinished Drywall
Replace missing closet doors
Install Electrical face plates adn A/C vents

The subject is currently in C5 condition by definition. Once completed the subject will be in C3 condition."

I have read the definitions provided for C3/C4/C5 and I'm trying to understand the C5 rating. Some of the subject to repairs seem petty (electrical face plates and A/C vents - all in a pile - present and accounted for; Baseboard was pulled out of the 3 bedrooms for painting and replacement - cosmetic repairs; Replace missing Closet doors - all are in the house just not hanging in the expected place).

Is the fact that 6 floor tiles (matching extra tiles are in the house and just need to be put in place), a 2x3' sheet rock repair needs to be complete, and sheet rock and trim needs to be installed around double doors to an extra room enough to drop the condition from a C3 to a C5? That seems like a big drop, and the C5 has the loan in jeopardy.

Thoughts?

I don't think C5 is unreasonable, per the UAD definition. That house is C5 in my market, where buyers would perceive the livability as diminished. I think some appraisers would also rate C4, few would rate C3 or C6. Some lenders require homes be brought to a certain condition before they will lend on them, which could explain why the appraiser made it subject-to when your contract is as-is.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
I agree with these being safety issues. However I think you missed the part of my original post where I indicated "electrical face plates and A/C vents - all in a pile - present and accounted for". They just need to be screwed back on the walls.

Also, this is a Florida house where it is sitting on a slab, and the A/C vents are in the walls and not quite the same safety hazard as if they were in the floor as is found in some northern houses.

Either way, would that push the condition down to a C5?

So why didn't someone spend 10 minutes before the appraiser got there and replace them?
 
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