House with no heat on 2nd floor

[Sadie]

prove that with paired data. Any in house lender would not think twice about it. It is only an issue with secondary market....and small banks make about 50% of all loans you know.

You know there are homes that sell with no heat. Its hard, but you can do paired sales.

 

[TerryRohrer]

Just do the cost to cure and go on. Give them an "as is" number.

Yeah, show me the sales that support such an impact. We all "believe" that is the case but no one has ever seen it. So it becomes a unicorn mythical adjustment to punish cost to cure worse. Find me the paired sales demonstrating that you can tie down an additional deduction for some minor item. Show me some paired sales (s like in more than one) where a couple thousand for a couple of mini-splits can be extracted from dissimilar houses. Gee you can buy mini's for under 1k.

So once again I ask the question I ask so many times. WHO IS THE LENDER? Is it secondary market like FHA? Fannie Mae? or is it simply an in-house bank? Almost all appraisals for non-secondary market require an "as is" value even if you do the "subject to" value. So you should check with the lender and see. 100% of bank work I do is small community banks. And they invariably want "AS IS"- in fact, the IAG (Interagency Guidelines) require it. When they tell you "conventional" they need to explicitly tell you what kind of report they want - one for FHA? Fannie mae? or "in house".... and none of my in-house lenders require UAD or Fannie forms, and I never used them when I did form reports. And all my bank reports now are narrative.... in house banks don't care for the most part.

Sure, and developers and builders do their thing with the expectation that they will only get their money back, and no more!

 

[Terrel L. Shields]

You know there are homes that sell with no heat. Its hard, but you can do paired sales.

There are lots of older home that sell and that sold that have no heat and no air conditioning. They may have to put a wood stove in or a gas stove but big deal- a few hundred bucks. I appraised a house last week that only has a flue and the buyer will install the heat. They wanted an "as is" value. It is so common to hardly mention.

Two window ACs - and a space heater cost very little. But for FHA, they want a working heater. But FHA finances what? 13%.... Most of the older homes in not good condition go financing with non-secondary market. Maybe a bridge loan until they can update whatever but still just ordinary loan.

 

[Sadie]

There are lots of older home that sell and that sold that have no heat and no air conditioning. They may have to put a wood stove in or a gas stove but big deal- a few hundred bucks. I appraised a house last week that only has a flue and the buyer will install the heat. They wanted an "as is" value. It is so common to hardly mention.

Two window ACs - and a space heater cost very little. But for FHA, they want a working heater. But FHA finances what? 13%.... Most of the older homes in not good condition go financing with non-secondary market. Maybe a bridge loan until they can update whatever but still just ordinary loan.

No no heat at all, and some with no reliable power. Just gotta look for them

 

[Terrel L. Shields]

Just gotta look for them

Jus gotta find 'em. Like I said, most times here that's not possible, and if you do, who is to say that the $40,000 shanty will really pair with the $300,000 house without heat? I mean if you can find paired sales goferit. But how often have I looked and not found same.

The house I mention above is in poor condition. Floors need padding and carpet except back bedrooms which needs hardwood buffed and refinished. The kitchen is a mess. So try and extract a "discount" for not having a functioning heat system? And it has central air but that isn't working either. Replacing the entire system would run around $5500 (just priced one for my house) so whatchagonnado?

 

[Elliott]

Kylah added, "While no heat is the main issue, I failed to mention this same home has a full bathroom that is non-functional due to being torn apart for renovation. The owners are living in and renovating as they go. They do have 1 functioning full bath. If I change the appraisal to “as is”, do I put 1 or 2 baths on the grid?"

So I was going to opine on heat to a second story attic, but then you added 'no heat' and then you added 'one bath non-functional.'

I would describe the issues and require they be subject to completion. Your client is not the HO.