Hypothetical Condition?

[Zoe]

Then you can make 200 one-sentence long posts about it.

NO this is real property rights as of effective date of appraisal.

You are queen of explaining these things.

There is no way you can't do HC and/or EA as of effective date for your client that is taking a mortgage on this property.

If you don't? You are asking for trouble.

Client can keep loan in house if they want to for a year. That is above your pay grade.

 

[J Grant]

NO this is real property rights as of effective date of appraisal.

You are queen of explaining these things.

There is no way you can't do HC and/or EA as of effective date for your client that is taking a mortgage on this property.

Many people do not agree with that wrt a HC or EA on this topic, read the posts -

 

[jay trotta]

Who makes the stipulation that a rehab from the property owner can't be sold for a year? I've never heard of that...

That is interesting, never heard of it before, but apparently someone's thought process was thinking "warranty" but it would appear to be misplaced in my opinion. It is not New Construction (perhaps State Law warranty-am not familiar with the State) but here a Buyer would have some sort of recourse. DIY rehab sounds like stretch, when it could be made (written) within a Sales Contract, and therefore, represent the similarity of a 12-month warranty.
Just a thought or two

 

[Terrel L. Shields]

An HC would be appropriate if you are developing market value. It is known that the owner can't sell for one year but, you are pretending that they could.

Anyone could still contract for sale today, with the stipulation that title not pass for 365 days. In doing so, the simple solution is to adjust by the time value of money. No HC.

 

[J Grant]

Anyone could still contract for sale today, with the stipulation that title not pass for 365 days. In doing so, the simple solution is to adjust by the time value of money. No HC.

That is not meet the MV definition that is used on lender appraisals - the assumption in the MV definition is that the title passes as of the (effective date ) which is the specified date of the appraisal.
It could be done the way you describe, but a GSE lender would probably never fund th loan or accept the appraisal done that way.

DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming
the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and
the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both
parties are well informed or well advised, and each acting in what he or she considers his or her own best interest; (3) a
reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U. S. dollars or in terms
of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale.

 

[Terrel L. Shields]

That is not meet the MV definition that is used on lender appraisals - the assumption in the MV definition is that the title passes as of the (effective date ) which is the specified date of the appraisal.
It could be done the way you describe, but a GSE lender would probably never fund th loan or accept the appraisal done that way.

I would beg to differ. Any number of lenders would make that deal...FNMA and FHA do not own the whole lending market. Private parties, etc. fund sales too. I've bought owner financed property before. Maybe @BRCJR has run into a similar situation. And how would that - appraisal-wise - be different from a sale of property with a homeowner retaining a life estate?

 

[CPreebz]

I wonder if it is enforceable.
I would not worry about it - the cert and conditions on the URAR ( below) covered you it - the assumption is already stated in the certs that the title is good and marketable as of the eff date - the eff date is for valuation purposes, and property could have a lien or cloud on the title but we are not hired to render title opinions -disclose it and you have fulfilled your responsibility, imo.

STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS: The appraiser’s certification in this report is
subject to the following assumptions and limiting conditions:
1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title
to it, except for information that he or she became aware of during the research involved in performing this appraisal. The
appraiser assumes that the title is good and marketable and will not render any opinions about the title.

Makes perfect sense thank you!

 

[Tom D]

I still don't understand. Who is the client, the owner, a lender, a restricted appraisal. There is no sale, correct, or it is a sale.

Is it a refi by the builder/owner who has to sit on it a year.

Isn't there a checkbox on the form for a prospective value, 1 year from now. In which case it's normal sale.

Or the client wants the value today, for what purpose.

 

[CPreebz]

I still don't understand. Who is the client, the owner, a lender, a restricted appraisal. There is no sale, correct, or it is a sale.

Is it a refi by the builder/owner who has to sit on it a year.

Isn't there a checkbox on the form for a prospective value, 1 year from now. In which case it's normal sale.

Or the client wants the value today, for what purpose.

Client is the lender. It is new construction that was just completed and now doing a refinance transaction. So yes the lender/client is looking for a value as of the effective date.

 

[Tom D]

Ok. Me thinks you worry too much. Like said, you mention it. The builder is going to rent it out, so income to carry it is not a problem for a year. Did the builder say he would sell it after the year.