How Many Repairs Makes A Report "subject To"

[Rich Hahn]

I recently did an interior review of s property.
There was a large addition to it 600sf+/-
Permits pulled 11/01

Current condition;
Exterior is just primed, no paint.
Missing misc trim on interior and exterior
1/2 main level missing carpet(sub floor)
The other 1/2 needs replacing.
Knee wall to basement handrail a temp fix, just 2x4's
Interior needs painting,
Steps to front porch are temporary
Gutters missing.
No landscaping
Interior trim is missing.
And other items.

Appraisal done "as is"
Appraisal states Good condition all the way through. A small blurb in Addendum talks about some unfinished items with $3,500 cost to cure and the paint hasnt been finished cuz of the cold weather...which year is my question.
$3,500 wont even cover the carpet, let alone everything else.

I regrid new 'below average' comps and do a big cut.

My question is were do you draw the line?.
Im awaiting the rebuttal they cant seem to get to me.
I see this original appraisal as missleading.

TIA

Rich

 

[Doug in NC]

If I can reasonably estimate repair costs that I feel comfortable with, I do so. If there is something like uneven floors, mold infestation, obvious roof leak problems, and/or major repairs, I call for an inspection by another professional. When there is real question as to the effect some structural problem has on value, I make sure that I am not going to be the one taking the wrap when correction costs are potentially high. CYA

 

[Tim The Enchanter]

Very misleading. I would do that appraisal subject to completion, or maybe with no value to the partly completed addition. Either way you gotta disclose and just saying "good" is the misleading bit.

You're reviewing, and I'm guessing the client wants it as is. If they want subject to that would likely be easier for you to do. Since it sounds like there's a lot of work to do at the subject. As is, How many buyers would be interested without a fat discount? How much would the place cost to bring up to standard?

Clients call if they want as is or subject to, right?

Sharpen your sword and hack away at Skippy.

 

[Patti Jury]

:rofl: :rofl: :rainfro: :rainfro: :rainfro: :rofl: :rainfro: :rainfro:

"Subject to?" Is that even on the form anymore?

:rainfro: :rainfro: :rofl:

 

[Tim The Enchanter]

"Subject to?" Is that even on the form anymore?

Yes.

 

[Rich Hahn]

Its my opinion(we all have one)
That market reaction for a below avg home is greater then cost.
We see below avg props sell below market and Excellent props sell above market.
So if it would cost 10K to cure the market may react @$30K.
Otherwise how/why would investors buy below Avg homes fix them up and sell them with a profit. Dont forget the 7% broker comission invlolved in the transaction.

Rich

 

[Jeff Horton]

Originally posted by Rich Hahn@Feb 24 2004, 09:52 PM
That market reaction for a below avg home is greater then cost.

In my market this is very true! Have seen it first hand a few times. A $1000 in repairs would cause a house to sit on the market and sell for 5K less or more than I thought it was worth.

Buyers have no imagination. They can't see past the problems.

Of course that is good for us. I want to start buying, repairing and reselling some of these.

 

[Tim The Enchanter]

That market reaction for a below avg home is greater then cost.
We see below avg props sell below market and Excellent props sell above market.

Here too. Except lately everything seems to sell at or above market (based on historical sales).

 

[Blue1]

Did they pull a permit? If not, those additions may be illegal. If they did, I'd make it subject to proof of final inspection AND that appraisal should have been made 'subject to' 100% completion.

 

[Don Orttenburger]

Is your "the cost to cure" an estimate before sale or after. In-other-words will the current owner do the work or will the market discount condition. One is wholesale and one is retail.