FHA Nightmare Appraisal with many repairs

[The Market Doctor]

I have an FHA appraisal on a mutli unit dwelling.
The main house has clear settlement issues. Calling for an engineer to inspect.
Also large detached garage is falling apart. Cant decide to call to be razed or repaired. Seems to have been sitting in very poor condition for an extended period. Lots of other repairs like peeling paint, damaged window frames and trip hazards.
Old oil tank thrown in yard. Appears basement unit (unit 2 of duplex) has no heat source as well. Getting nervous. Should I withdraw from assignment? Already have hours into it.
Value is looking to come in 50-100 k below. Realtor has buyer and seller. Everything seems fishy about it.
Getting nervous. Should I withdraw from assignment? Already have hours into it.
Getting nervous. Should I withdraw from assignment? Already have hours into it.

 

[J Grant]

I have an FHA appraisal on a mutli unit dwelling.
The main house has clear settlement issues. Calling for an engineer to inspect.
Also large detached garage is falling apart. Cant decide to call to be razed or repaired. Seems to have been sitting in very poor condition for an extended period. Lots of other repairs like peeling paint, damaged window frames and trip hazards.
Old oil tank thrown in yard. Appears basement unit (unit 2 of duplex) has no heat source as well. Getting nervous. Should I withdraw from assignment? Already have hours into it.
Value is looking to come in 50-100 k below. Realtor has buyer and seller. Everything seems fishy about it.
Getting nervous. Should I withdraw from assignment? Already have hours into it.
Getting nervous. Should I withdraw from assignment? Already have hours into it.

Just finish the report,- - if lender clients can't rely on us in all circumstances/with the tough ones, their argument to get rid of appraisers has merit.

This sounds like a C 5 or C 6, if a C 6 HBU might be to raze it, or the repairs so severe not worth doing If a C 5 supposed to appraise it as repaired to C 4 condition ( per most clients, however check your client engagement letter ). It is certainly subject to inspections and repairs and likely the deal will die... as far as fishy, if we suspect the parties collude on a fishy deal does not matter to the appraisal, we just appraise the property. - disclose what we know of the deal, the buyer and seller are represented by the RE agent in this case. Do not accuse them of "fishy" since you have no proof on it

 

[Tom D]

if you are truly this nervous, it means you are not sure about your ability to do it correctly. in that case i would say to decide the overall condition, prolly c5 at min, call lender and give it back.
never do an appraisal that will surely be looked at, very closely, because of the condition & possible over pricing. i don't care who you are, you don't really want a very close review that will find any mistakes you could have made. and with multi family there are more areas to prove that you didn't qualify your adjustment. even professionals will run away if it saves their life, or license. i have at times, and so have others, given back a potential hand grenade with the pin pulled out.

 

[J Grant]

if you are truly this nervous, it means you are not sure about your ability to do it correctly. in that case i would say to decide the overall condition, prolly c5 at min, call lender and give it back.
never do an appraisal that will surely be looked at, very closely, because of the condition & possible over pricing. i don't care who you are, you don't really want a very close review that will find any mistakes you could have made. and with multi family there are more areas to prove that you didn't qualify your adjustment. even professionals will run away if it saves their life, or license. i have at times, and so have others, given back a potential hand grenade with the pin pulled out.

Even though I advised to stick with it, your viewpoint has merit too ! The few times I returned an order for above I did not charge for my time since it was my decision.

 

[Tom D]

Even though I advised to stick with it, your viewpoint has merit too ! The few times I returned an order for above I did not charge for my time since it was my decision.

and this is why you are writing good advice here. you took your foot out of the bear trap, before it closed on it. alive and well on this blog now.

 

[Amy Perkins]

I have an FHA appraisal on a mutli unit dwelling.
The main house has clear settlement issues. Calling for an engineer to inspect.
Also large detached garage is falling apart. Cant decide to call to be razed or repaired. Seems to have been sitting in very poor condition for an extended period. Lots of other repairs like peeling paint, damaged window frames and trip hazards.
Old oil tank thrown in yard. Appears basement unit (unit 2 of duplex) has no heat source as well. Getting nervous. Should I withdraw from assignment? Already have hours into it.
Value is looking to come in 50-100 k below. Realtor has buyer and seller. Everything seems fishy about it.
Getting nervous. Should I withdraw from assignment? Already have hours into it.
Getting nervous. Should I withdraw from assignment? Already have hours into it.

Many Clients ask you to call and notify them when the condition is an issue, read your engagement letter. Just call them and tell them the situation, they will likely cancel the order and pay you for the work you have done so far.

 

[glenn walker]

It happens-HARD STOP- I normally will try and do the report to where it can be brought up to a C-4 BUT in this case you really have a property that should not even go FHA and what you have is a buyer who is saying he is going to occupy one unit and he wants a low down loan. The Realtor knows the game and him and his clients goal is to try and pound a square peg into a round hole. So in order to stop it in its tracks you have to make it impossible for them to try and get you to says its a C-4.

1- Finish the report a Hard C-5 or C-6 "subject to" as many items that you noted were problematic.

2- Check are there "any adverse site conditions or external factors ( easements, encroachments, environmental conditions, land uses etc ) CHECK -The YES BOX -Then write appraiser observed an-older Large Oil tank on the property and and you do not know if fluids from said tank have or have not leached into the soil. And use the word possible environmental problem a few times.

3- At bottom of Page-1 under "describe the condition of the property ( including needed repairs , deterioration and renovations, remodeling etc ) Here is where you go full blower- The property suffers from physical deterioration some which is " curable and others that may be "incurable " the large detached garage appears to be ready to be torn down and is not structurally sound enough condition to use to store vehicles in it. The property also has damaged wood, peeling paint , bare wood etc. There are damaged window frames and next ( Check-the Infestation " Box-Yes " and recommend the lender obtain a termite inspection and clearance. Then go to the Health & Safety issues and lay them out. Also explain there is no permanent heat source in the 2 units located in the basement . Finally Is there "Evidence of settlement-Check YES BOX " And recommend lender obtain an-inspection by a general contractor or civil engineer.

4- Does the property meet FHA MPR ? No in its current condition the property does not meet FHA Minimum Property Requirements or ( MPR ) due to its poor physical condition and due to numerous health & safety Issues noted in the report. Then report that future sale and marketability may be limited unless the property is brought up to MPRs. Now this bad-boy hits the FHA DE-Underwriters desk and its DOA.

 

[sputnam]

If the work is beyond your experience and capabilities.... withdraw and be honest about why. If you simply don't want to work hard or don't want to spend the extra time needed...then complete the assignment and decline assignments in the future. Are you a professional real estate appraiser? or not?