Form 2055 for proposed construction. Help please!

[Caterina Platt]

My best client often requests appraisals on the Form 2055 with interior exterior to help him remain competetive in closing costs. To compete with other yo yo's in my area who charge less, I have had to follow suit and charge less for these. Doesn't really bother me as the market comments are often my hardest task in the 1004. His volume, integrity, and willingness to use me pretty much exclusively for his loans has more than made up for the loss.

In August, he requested a 2055 for a proposed construction. As it stands, the form I completed has the boxes under the 'Improvements' section checked as Exterior and Other Plans and Specifications . The boxes in the 'Quantitative Analysis' section are checked of as subject to completion per plans and spec, and Interior/Exterior. The underwriter now wants me to change the box in the 'Improvement' section to read Interior/Exterior as well. The home isn't complete yet, the LO is just trying to clear his conditions ahead of time. In normal circumstances the 442, interior pics, etc. would answer these silly questions. H***, in normal circumstances we'd be dealing with the right form and all this nonsense wouldn't be taking place!

The way I interpret this is what sources were initially used (Improvements), and how was the value determined (Quantitative Analysis). The underwriter is now requesting that I change the other box to Interior/Exterior as well. In my mind, that is stating that I did an interior initially for data gathering for the characteristics of the property. I don't want to change it as I think this would be misleading. This dang form doesn't have as many areas to make it clear to the reader that we are talking about a hypothetical as the good 'ol 1004.

Am I interpreting this form incorrectly? I am nearing the end of a week of ridiculous requests and pushy status calls. Just wanna make sure I'm not digging my heels in and saying 'Enough'! at an inappropriate moment.

 

[Larry Lyke]

Caterina --

I too was requested to use a 2055 for Proposed Construction on a $550,000 house; therefore...

I would suspect that the UW is straightening out a faux pas in the original appraisal according to HER way of thinking.

You're NOT saying that the UW wants you to remove the "Plans and Specs" blurb, too, are you? So, I'd say, go ahead and comply. In my 2055, I had checked Interior and Exterior in the original appraisal report. I know, it's a little semantically dense to say there's no interior -- Well, of course, there is, if only in the pile of plans...

When the house is done the UW will be asking for a 442, I'm sure. Otherwise, she won't get the "completed" photos, will she? Not from you!

 

[Anonymous]

Caterina:

I have a problem putting anything in writing that I did not do. I would explain that I can not mark the box that I checked the interior, as of the effective date of the appraisal, becasue there was no interior to check. The on the Sat. Complete form, I would note that Iwalked through the interior at that time.

 

[jtrotta]

Perhaps; Interior/Exterior per plans & specs provided* - add it in somewhere & refer to it 8)

Larry's comment :!:

 

[Judy Whitehead (Florida)]

Caterina, even though the request is for a 2055, there is nothing to stop you from using the 1004 form and charging the same thing. If his only object is to save money, then unless you do a LOT of new construction, you would only ''lose money'' on a few. There should be no objection to using the different form if the only purpose is to save money. I have a real problem using a 2055 for a new construction, too (in fact, I never have) and I do a lot of new construction.

 

[Charlotte Dixon]

I would never use a 2055 for proposed new construction. I do plenty of 2055 interiors and I charge the same for those as I do a 1004. I only charge $25 less for a 2055 exterior than my 1004 fee. So....they want to save some closing cost money? Ask the surveyor if he'll charge less since he probably has the info in his data base. Ask the attorney to shave his fee a little. I've stood my ground with even my BEST clients. Sorry..........I think it stinks! Who's in control here? :x

 

[Pamela Crowley (Florida)]

Hooray Charlotte!!!

I do pretty much the same on fees. If I give a value it's a USPAP compliant appraisal. All due diligence is done and I deserve the full fee. Doesn't really matter what form they want it on.

I really hate 'Blind' appraisals.

 

[Larry Lyke]

I had the LO double-check with the UW that the Lender's request for a 2055 on Proposed Construction would meet their needs.

UPON that assurance, I proceeded and charged them $450 -- my regular fee for New Construction. I also did the loan progress payments and the Final 442.

I NEVER EVER demand to win an argument in order to lose the battle. Not my style.

IMPORTANTLY, what this issue points up is that there is a lot more flexibility in how we do things than we seem to allow ourselves to think.

Everybody who knows me in person and, perhaps on this Forum, knows that I WILL find a way to do something appraisal-wise. You won't laugh when you see me guest on Letterman -- the latter because they'll need fairly cheap guests after ABC dumps Ted for Dave!

Entertainment is more expensive to produce than the News. That's why we generate our News here for FREE! Hunh?

 

[Caterina Platt]

Charlotte,

New clients, once in a while clients, etc. all get my full fee quote. This client also pays full fee for URAR's when they come around. My fee for 2055's is still a bit above most others in the area from what I can tell, as much as $40-50. This client does not get a discount on these reports. Back about 2 years ago when this 2055 I/E nonsense began in my area I was still working for another appraiser. He checked around and we determined to remain competitive, we'd have to follow suit. I wasn't happy about it, but what do you do? Charge $100 more than all your competitors and whine when the phone doesn't ring? We can only charge what the market will bear.

My URAR fee is also $25-30 higher than the average. I don't balk when I quote this, as my reports will make it through underwriting and reviews. My market is difficult to appraise and often requires bukoo addendums and explanations. They get what they pay for. I'm proud of my work and I'm not necessarily inexpensive.

I'm with you, I won't be controlled by these guys. But at the same time, I can't be so proud of my work that I price myself out of the game either. New Mexico typically is a cheap state. Our wages for most jobs here stink when compared to the rest of the country. In the past, I've seen a few fees mentioned by folks here, and I really don't think we are low, or much lower than others in the appraisal industry. Surprised me.

 

[Richard Carlsen]

You can check Interior/Exterior for a proposed construction on a 2055 as the reported value is subject to completion. When completed, you do your interior and exterior inspection to check compliance with the plans and specs. You take the copy of the Cert of Occupancy and provide you client a Cert of Completion (plus invoice for at least $100). This is a simple appraisal report.

My problem with the 2055 is that the Cost Approach has so much validity in new construction that I really would not like to do a 2055 in a case where the builders price were not supported by the market.