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In-ground Pool 50% Installed, But Lender Wants "as-is" Appraisal

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Doug in NC

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Never run into something exactly like this before. Pool is estimated to cost $65K once complete, but it is little over 1/2 complete at time of inspection. I would have preferred to have done the report subject to completion, but that's not what the lender wants (due to constraints of time I guess). I'm thinking I'll need to do a cost to cure by having a tractor fill in the already dug out pool hole and covering with grass seed. Homeowner estimates another $30K will be done before it is completed, so filling and landscaping is definitely the cheaper option.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
$65k isn't that out of line in my market.

The question is, how much will the pool contribute in value once it is completed? That will determine (IMO) if the adjustment is a backhoe & landscape cost or the cost (plus EI) of completing the pool.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Never run into something exactly like this before. Pool is estimated to cost $65K once complete, but it is little over 1/2 complete at time of inspection. I would have preferred to have done the report subject to completion, but that's not what the lender wants (due to constraints of time I guess). I'm thinking I'll need to do a cost to cure by having a tractor fill in the already dug out pool hole and covering with grass seed. Homeowner estimates another $30K will be done before it is completed, so filling and landscaping is definitely the cheaper option.


?? Imo cost to cure is not to fill in the half built pool, the cost to cure would be to FINISH the pool. The existing value of more than half done is value is hole dug, permits granted, any plumbing in place or concrete poured (whatever is there).

The contributory value in adjusting may be a bit more than cost to finish, ....this is how I would do the report, as is with a negative adjustment for cost plus annoyance factor and cash out of pocket to finish the pool for a buyer. You can use houses with pools and houses without pools to Bracket half built pool
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Never run into something exactly like this before. Pool is estimated to cost $65K once complete, but it is little over 1/2 complete at time of inspection. I would have preferred to have done the report subject to completion, but that's not what the lender wants (due to constraints of time I guess). I'm thinking I'll need to do a cost to cure by having a tractor fill in the already dug out pool hole and covering with grass seed. Homeowner estimates another $30K will be done before it is completed, so filling and landscaping is definitely the cheaper option.

What exists now ( how much is half finished)
while fill and landscape is the cheaper option, completing the pool may add more contributory value.

Why is estimate 65k...fancy tile and patio, aka would typical buyer finish it at that cost or go cheaper? Depends on price range of house and expectation of buyers for quality
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
filling and landscaping is definitely the cheaper option.
Its not about the "cheaper" option

Imo cost to cure is not to fill in the half built pool, the cost to cure would be to FINISH the pool. The existing value of more than half done is value is hole dug, permits granted, any plumbing in place or concrete poured (whatever is there).
You have no way of knowing which option is the best alternative as there is insufficient information provided to answer the question.

You can use houses with pools and houses without pools to Bracket half built pool
This would present an upper and lower limit but you left out the costs associated with getting to either alternative which are necessary to properly answer the question at hand.

What exists now ( how much is half finished)
while fill and landscape is the cheaper option, completing the pool may add more contributory value.
Now this is more in line with what needs to be evaluated
 
D

Deleted member 134708

Guest
I would just do an as-is appraisal. No cost to cure anything. If it sold a minute before your time of arrival. What would it Have sold for?

Sold for = MV in this scenario
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Never run into something exactly like this before. Pool is estimated to cost $65K once complete, but it is little over 1/2 complete at time of inspection. I would have preferred to have done the report subject to completion, but that's not what the lender wants (due to constraints of time I guess). I'm thinking I'll need to do a cost to cure by having a tractor fill in the already dug out pool hole and covering with grass seed. Homeowner estimates another $30K will be done before it is completed, so filling and landscaping is definitely the cheaper option.

Did the lender ask you for a cost to cure?

The lender wants an AS IS appraisal...would it sell for as of inspection date, with a half finished or slightly more than half finished pool?

Unless the lender asked you for a cost to cure, the assignment is not about a cost to cure, the assignment is about valuing it as is.

If the lender asked you for a cost to cure, the cost to cure is usually seen as the cost to complete something or repair something..,..in this case the cost to finish the pool. A cost to cure is not the same as an adjustment for market value. Though it is possible a potential buyer might choose to fill in the hole and have no pool, there is no way to know this. The assignment is to value it as a half finished pool. Cost to cure is a client service to give them some idea of what it might take to finish the pool...though it is useful for our analysis as well as an adjustment comparison because a typically motivated buyer well informed will have a rough idea of what it would cost them to finish the pool and would make an offer accordingly ( or shun the e house if the half finished pool hurts market ability...that is the hard part of an assignment like this and you need to talk to agents and get feedback...might depend on how popular/in demand pools are in area )
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
would be something if the bb required anyone asking a question/struggling with a problem to supply complete set of photos, plans and specs and precise details before any of us answer ...since that is not the case, we do work off partial information in an effort to help an OP address a problem... one assumes an OP as an appraiser realizes ultimately it is up to them it's their appraisal nobody here sees the property first hand.
 
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