Frustrated.... questions about Lenders/Realtors

[SierraMV]

I'm currently appraising a property that has a positive mold test (black mold). First, the realtor did not disclose this before the inspection and so I went in not masked, etc. I went back to my client and
asked how they wanted the appraisal completed, as the purchase price reflects the need for remediation. They of course said, subject-to remediation. Now the Realtor is calling asking what the
conditions are that the report is going to be subject to because I need a few days to complete. I know I can't say anything to them, but wouldn't the lender tell them what was coming down the pipe?
Do banks actually ever close on houses with mold that isn't remediated. This realtor has been around a while and I feel like this shouldn't be a surprise, but they think because the purchase price is so
low, it should be able to close as-is? Does anyone have any experience with this?

Thanks for any insight.

 

[Terrel L. Shields]

Is this a conforming or non-conforming loan? (i.e- conforming is secondary market, non-conforming is in-house loan.) The in house bank will want an as is value. Secondary market is likely going to want a subject to value. So go back to the lender/AMC and ask for directions. So who ID'd the mold? Are you a mold expert? Did they hire a home inspector, etc. Non-conforming lenders do frequently close on houses with mold or potential mold.

 

[SierraMV]

Is this a conforming or non-conforming loan? (i.e- conforming is secondary market, non-conforming is in-house loan.) The in house bank will want an as is value. Secondary market is likely going to want a subject to value. So go back to the lender/AMC and ask for directions. So who ID'd the mold? Are you a mold expert? Did they hire a home inspector, etc. Non-conforming lenders do frequently close on houses with mold or potential mold.

I went back to my client and the bank wants the appraisal subject-to. The mold test was completed by a reputable environmental health company that specialized in testing asbestos, lead, mold, etc.

 

[Terrel L. Shields]

I went back to my client and the bank wants the appraisal subject-to. The mold test was completed by a reputable environmental health company that specialized in testing asbestos, lead, mold, etc.

Then you are dead to nuts spot on correct. The Realtor's issue is with the lender not you and if they call, refer them to the lender and the testing company...Nacho problemo.

 

[J Grant]

I'm currently appraising a property that has a positive mold test (black mold). First, the realtor did not disclose this before the inspection and so I went in not masked, etc. I went back to my client and
asked how they wanted the appraisal completed, as the purchase price reflects the need for remediation. They of course said, subject-to remediation. Now the Realtor is calling asking what the
conditions are that the report is going to be subject to because I need a few days to complete. I know I can't say anything to them, but wouldn't the lender tell them what was coming down the pipe?
Do banks actually ever close on houses with mold that isn't remediated. This realtor has been around a while and I feel like this shouldn't be a surprise, but they think because the purchase price is so
low, it should be able to close as-is? Does anyone have any experience with this?

Thanks for any insight.

Don't; interact with the REaltor. we have no obligation ot them, to finish it subject to mold inspection or mold remediation, whichever you choose, -it is not your concern if it's a surprise if they close, etc - I can't figure out why appraisers get involved in this kind of thing or think they need to be involved.

 

[sputnam]

I'm currently appraising a property that has a positive mold test (black mold). First, the realtor did not disclose this before the inspection and so I went in not masked, etc. I went back to my client and
asked how they wanted the appraisal completed, as the purchase price reflects the need for remediation. They of course said, subject-to remediation. Now the Realtor is calling asking what the
conditions are that the report is going to be subject to because I need a few days to complete. I know I can't say anything to them, but wouldn't the lender tell them what was coming down the pipe?
Do banks actually ever close on houses with mold that isn't remediated. This realtor has been around a while and I feel like this shouldn't be a surprise, but they think because the purchase price is so
low, it should be able to close as-is? Does anyone have any experience with this?

Thanks for any insight.

The physical attibutes and issues of the property are not considered confidential. You can tell the Realtor. You can't talk to them about your assignment results... your opinions and conclusions.

After you've explained the situation to them, the Client can choose... 'as is' or 'subject to remediation of the mold'. If you are lucky, they will choose 'subject to'. That is an easier analysis... you just pretend the mold isn't there... except for comments about it.

 

[Tom D]

is the mold local in one area, is it on a spot. depending on how much is a concern. we have had a lot of rain which with basements i some some mold where water came in. but overall, if a small problem, easily fixed. a bigger encompassing volume is a very bad lawsuit to get into and lose. i have no issue telling realtors repair items when they ask. with mold, i ask them if they want to get sued by the new unhappy buyer. i am protecting them and myself from a bad lawsuit. there is mold in every house, it becomes a problem with the dampness, and how long the dampness continued. i would also be concerned about why it got there, and is the cause being fixed with the removal. if as is, i am putting in bold letters, in several places, there is mold as per the mold inspection.
the happy buyer today, is the angry owner tomorrow. unless it's going to be a gut, rehab, relist brand new interior.
i always have realtors thank me when i explain FHA rules, or a fixable issue that is needed. some of you don't understand that you run a business.

 

[SierraMV]

is the mold local in one area, is it on a spot. depending on how much is a concern. we have had a lot of rain which with basements i some some mold where water came in. but overall, if a small problem, easily fixed. a bigger encompassing volume is a very bad lawsuit to get into and lose. i have no issue telling realtors repair items when they ask. with mold, i ask them if they want to get sued by the new unhappy buyer. i am protecting them and myself from a bad lawsuit. there is mold in every house, it becomes a problem with the dampness, and how long the dampness continued. i would also be concerned about why it got there, and is the cause being fixed with the removal. if as is, i am putting in bold letters, in several places, there is mold as per the mold inspection.
the happy buyer today, is the angry owner tomorrow. unless it's going to be a gut, rehab, relist brand new interior.
i always have realtors thank me when i explain FHA rules, or a fixable issue that is needed. some of you don't understand that you run a business.

Thank you, the mold is pretty extensive. A leaky dishwasher has saturated the finished basement area, brining down parts of the ceiling, it appears they had an inspector looking at walls, and there is mold all over the 2x4's that have been exposed. There is currently an active leak in the roof and the upstairs bathroom has black mold on the ceiling and peeling paint, etc.

I do live in a smaller community, and I've worked with these realtors before. You are correct about running a business. My mentor wouldn't even respond to realtor messages about basic
things. I politely sent her back an email and stated that due to confidentiality issues, she would need to get the subject-to conditions from the lender. Which she did, so they could get a jump
start on repairs.

 

[Raven59]

"as the purchase price reflects the need for remediation" So you are indicating the "as is" reflects a discount for the mold. I assume doing it "subject to" would result in a different, non-discounted price. If I were the agent representing the seller, the "subject to repair" price would be different due to the expenditures necessary to fix the issue. It would affect my client's position. This is a scope of work and a client underwriting decision. I doubt the lender will say much until their underwriter or like can make a decision...thus they need a completed report first.

 

[J Grant]

Thank you, the mold is pretty extensive. A leaky dishwasher has saturated the finished basement area, brining down parts of the ceiling, it appears they had an inspector looking at walls, and there is mold all over the 2x4's that have been exposed. There is currently an active leak in the roof and the upstairs bathroom has black mold on the ceiling and peeling paint, etc.

I do live in a smaller community, and I've worked with these realtors before. You are correct about running a business. My mentor wouldn't even respond to realtor messages about basic
things. I politely sent her back an email and stated that due to confidentiality issues, she would need to get the subject-to conditions from the lender. Which she did, so they could get a jump
start on repairs.

Your mentor knew what they were doing and did not respond to the messages for good reason, and you went around him or her.

It is not up to the realtor to decide about a subject to condition on an appraisal or get a heads up about it. -

What if the borrower decides to cancel after seeing the mold problem or the seller decides not to do the repairs? What if they "get a jump" on the repairs by hiring a not-qualified handyman to cosmetically remove the mold evidence instead of a professional mitigation of it?

The right parties get the appraisal very fast these days, so giving them a "heads up" is pointless and, in addition, is something perhaps the lender does not want done as well.

Yes, we are running a business, and our client is the lender. There is a protocol to follow, and giving a RE agent advance warning about a subject to condition is not included. We are not in a popularity contest with Realtors (I used to be one, btw and have nothing against them ). We don't have to be rude, we can return an email or leave a message that says sorry, but I can not discuss the appraisal, and they can contact the leader with any questions they might have.