• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Heat broken,

Status
Not open for further replies.

Lanny A Freng

Thread Starter
Sophomore Member
Joined
Nov 28, 2006
Professional Status
Certified Residential Appraiser
State
Minnesota
As is sale. forclosure I believe. Conventional financing. Heater just went out. I got a call from a realtor, said appraiser they have now wont appraise the house with the heat not in working order.

FHA obvious problem... conventional could it still be appraised with a condition adjustment for the broken boiler? maybe do a subject to appraisal?? couldnt they hold funds in escrow till it is fixed and then release or maybe the bank that owns it wouldnt want to deal with this approach.

Anyone run into this problem in the past and what did you do?
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
Lanny,

That would really be up to the lender. I don't understand why the realtor is calling you.

If the lender is willing to make an "as is" loan on the property then you can appraise it. But it would not conform to Freddie/Fannie/FHA guidelines and the lender will understand that.

Tell the realtor to have the lender call you so you can find out what his needs are.

--

On the off chance that you meant that the seller or the borrower wanted their own non-lending appraisal, that is also doable. Don't use a lending form for that and make sure that you tell them it will not be acceptable to normal lending banks.

---

Frankly, I worry that the realtor is shopping for an appraiser who will agree to lie about the furnace in his report.

The productive thing for the realtor to do is to shop for a lender who will lend on it as is. He's wasting his time calling appraisers.
 
Last edited:

Lanny A Freng

Thread Starter
Sophomore Member
Joined
Nov 28, 2006
Professional Status
Certified Residential Appraiser
State
Minnesota
The realtor called me because I have a friend at the title company that they are closing it at and she referred him to me to find out why he wouldnt appraise the property.

I told him I couldnt answer him as to why that other appraiser wouldnt do an appraisal but it can be done, it just may need to be done in a different way than the appraiser would typically appraise it.

I did tell him to have the LO call me so I can discuss it with him. I am sure the lender will have some requirements/guidelines and I need to speak to the LO to work that out.
 
Joined
Jun 3, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
Has the property been winterized? Have the water pipes been drained? The heating system failure could result in frost damage that will go way beyond the cost of a new boiler -- this definitely needs to be a subject to repairs report, and subject to all of the utilities being turned on.

The top priority should be for the owner to get a boiler repair company out there ASAP -- while they still have an asset to sell.
 

Lobo Fan

Elite Member
Joined
Nov 28, 2004
Professional Status
Certified Residential Appraiser
State
New Mexico
You can do it with a cost to cure to get it back to habitable. If the lender will loan or not is outside the scope of the appraisal. If there are real bids to repair/replace the defects, so much the better.

You can appraise it in any condition. What is done with the loan is not up to the appraiser. It is what it is.
 

MNRural

Member
Joined
Oct 11, 2006
Professional Status
Certified General Appraiser
State
Minnesota
I used to get the calls from LOs all the time. The heat and plumbing are shut off - do you need to call that as a work order? What they are really asking is are you going to say something about this on the appraisal or hide this fact?

I tell them that is a good question to run by their underwriter (whether they require these items to be on and functioning).

I tell the LO - just let me know - I can appraise it as-is (with a cost to cure and extraordinary assumptions) or as-completed, depending on what the lender will require.

In not so many words - no, I'm not going to ignore the fact that the furnace doesnt work and I have no idea if the plumbing works.
 

Lanny A Freng

Thread Starter
Sophomore Member
Joined
Nov 28, 2006
Professional Status
Certified Residential Appraiser
State
Minnesota
not sure on winterization. I have a list of questions to ask him when he calls. Yeah, it will be disclosed. He wasnt poking at the idea of hiding, just couldnt understand why it couldnt be appraised as is.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
I'm still betting it's because the lender would not loan when the appraisal said 'none' on the grid for the heat source. The lender then told the borrower that the appraiser could not appraise it 'as is'. What the lender meant was they would not loan on it 'as is'.
 

Mary Tiernan

Senior Member
Joined
Dec 16, 2003
Professional Status
Retired Appraiser
State
Michigan
If the property is appraied as is, why does it not conform to Fannie/Freddie guidelines?

Where does Fannie say they will not accept as is properties or properties in need of repair????
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
Mary,

It depends on the type of repair. Fannie wants the property to be livable before they will loan on it. If there is no heat source it is not livable. For a Fannie loan the appraisal would have to call for a furnace repair (the HC on check box 3).

Fannie is OK with appraisals calling for repairs but some lenders are not. If the lender were to insist on an 'as is' appraisal they could get that but Fannie would not buy it.

And the appraisal would not meet Fannie guidelines.
 
Last edited:
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks