Form 442 Request?

[Julia Young]

I posted my original question in the wrong forum so I am re-posting.
(Still a newbie)
New lender asked for "as is" appraisal on HUD house. They originally told me I would not need to note repairs but they would need a rent schedule which I provided. The house was in poor condition with numerous problems, most of which I noted as deferred maintenance listing the condition as fair. They faxed me the following note after I delivered the appraisal.
Quote:
1. Appraisal to provide: All interior materials to be in average condition.
2. Heating/Cooling to be in Average condition.
Form 442 w/photos for all deferred maintenance to be completed.
Supply cost to cure.
Condition of subject to be in average condition.

In my appraisal the H & A was listed "unknown" stating the utilities were not on at the time of my visit. The work appears not to be done at this time as they have asked me to provide the cost to cure or repair. The only appraisals of this type I have done were with the input of a contractor. It seems a risky venture to estimate 'cure' with the built-in liability, for a non-contractor, especially with some of the pre-1978 houses. Although I do new construction based on contractor's specs, I have done little HUD work. Should I do the final & photos after the work is completed, then let them provide the cost to cure. If what they were really wanting to begin with was a before and after appraisal, how do you handle or prevent this type problem. As we say in the sunny south, what do 'ya'll do? Any feedback is welcome.
Julia

 

[Mountain Man]

Opps, I posted under your other listing. Check it out.
Mell.

 

[Larry Lyke]

Julia --

Not having the benefit of Mell's reply, ...

Before you can accomplish this assignment you'll have to have a meeting of minds with the Client by asking them what they want.

Don't be afraid of the Client. Often times they don't KNOW what they want! Other than to get rid of the Appraiser AND collect a commission check. That's the reason so much LOs punt. Some of them punt ALL THE TIME!

Regardless of what the assignment entails, the 442 w/(any) photos will come after the work is done.

If you aren't working with a contractor or have insufficient experience to determine the amount of work and estimate the cost of that work, it might be a good idea to decline this assignment or hire another experience Appraiser to help you.

It's like most things 'appraisal,' they ain't hard, but sometimes the first time is pretty frustrating.

 

[Julia Young]

I have yet to find the number 442 on my finals, reos, compliance or anything for that matter. I even checked HUD forms and it didn't list as a form 442. I called the client and they don't know what they need. They must be new brokers. I would have declined this on the front end but I specifically asked if all they wanted was an 'as is' appraisal without the cost to cure, as I had just finished another HUD where the investor had given me the contractor's estimate of repair. We worked with the estimate and I adjusted a little and required a final. Still I didn't feel comfortable with the process. I saw the potential of being used to boost the loan with perhaps half the repairs actually getting done.
Now the client tells me it is an investor purchaser but apparently they didn't know on the front end what they needed and just ordered a conventional appraisal. Now the UW comes back wanting the whole package. They still don't have utilities or an estimate but since I did the original appraisal, they want me to call the UW and take care of everything and/or show it as average condition.

 

[Jo Ann Meyer Stratton]

Julie:
See my posting under your other post. You would not do the 442 until after all the repairs are completed satisfactorly. You would only report on the 442, the items that are complete that would fall within your expertise as an appraiser. If some of the repairs would require a licensed contractor or plumber or electrician, etc--they should provide the info to the client. You would only be able to report that yes water did come out of the faucet when you turned the tap on for example. The plumber would have to certifiy to the client that the repairs were done in compliance with whatever building code applies for that area; his/her license would be on the line if they didn't.

A sentence I use in my reports when the client wants a "cost to cure" (which would not be on the 442, but in the addendum to your original report since it is prepared before the 442 is done) in the original appraisal report follows:

"The following estimated costs to repair has been provided at client's request. The appraiser is not an expert in the field of building construction and actual costs may vary from those provided. Repair costs and opinion reported herein are subject to future revision based on new repair estimates and evaluations by a licensed building contractor."

The client is asking for a two step process--two visits to the property, one before any repairs (write up the URAR), a second visit after they are complete and all requirements by the local government authorities are met, if the government agency issues a Certificate of Occupancy in this situation, do not go back the second time until that government agency does so. So you will be preparing two reports, your URAR is the before and the 442 is the after. Although since the client did not provide original clear instructions (their supplemental standards), it sounds like three trips for you, unless you have enough notes to write up a separate addendum for the items that need repair. And each report for each trip has a fee! And a more involved initial URAR has a higher fee than a standard URAR.

 

[Julia Young]

Thanks for the paragraph. I will use it. I couldn't find the 442 on Alamode but maybe I just haven't looked close enough at the fine print. There are several Compliance agreements, etc. I did make notes on my first trip because of the forethought that I might have to list repairs. I believe they want me to make the URAR as if the subject is already repaired. In which case I would subject the appraisal on the completion of the items I list. I could require an inspection of the H & A They request I place the subject in Average condition. They are looking for an "after" value with a cost to cure evaluation and a final, subject to the completion of the repairs. From everything I have read here and listened to there, it seems reasonable. Actually I am still doing two URARs, it seems. I will charge them for additional work but the problem is I don't like the risk of estimating cost. It makes me uncomfortable. I really appreciate your help, Jo Anne.

 

[Caterina Platt]

Julia,

I made the same mistake initially seaching my alamode forms for the 442. It is called the Satisfactory Completion Certificate, or Form
CRT.

 

[Julia Young]

I found it, with pix and everything. Wow is that small print. Think I might need new glasses!
Julia

 

[Debra]

Hello!

I'm getting ready to do my first 442 without help from my x-sponser. This client requested an "as-is" appraisal and now wants a 442 because I adjusted because the property needed a new roof and now they have one. I guess I'll have to white out some of the information on the 442 and add a lot of comments? I'm also assuming that I need to state the new '"as-repaired" final value estimated because they do not want me to revise the original appraisal? They want a picture of the new roof...should I rent an airplane? Just kidding...

 

[Caterina Platt]

Debra,

What you are being asked to do is to verify the new roof was installed to satisfy the lender that their required repair was completed- not your required. Check the 'other' box where the options on the form are 'subject to repairs', 'completion per plans and specs' , and 'other'. (I don't have the exact wording in front of me) and in the lines provided, type what took place. Lender required installation of new roof, above referenced appraisal was completed 'as is'. This inspection is being completed at lender request to insure work was completed.

Then down below type your comments such as " New shingle roof installed and appearing to be done in professional and workmanlike manner. Pictures are attached." Be brief and to the point without stating things that cause further liability like 'installed per state/local codes' unless you know for a fact it was done to these codes.....

Attach a photo addendum and your invoice for the final inspection, viola. You're done.