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Lender is asking to change report type to "as is"

Bill75

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Certified Residential Appraiser
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Texas
"The Appraiser observed both a large crack along a drywall seam in the ceiling and possibly a stressed load-bearing column below. The appraiser cannot determine if this was caused by foundation settlement, poor drywall instillation, or the additional unpermitted bedroom. The Appraiser suspects this could be related to the additional weight of an unpermitted bedroom addition and recommends this be inspected by a certified engineer."

I wrote the report "subject to inspection."

Their response...

****FOR ALL HOME EQUITY APPRAISALS report must be AS IS, regardless of safety issues, unfinished renovations and condition. If this order is marked Home Equity − please only submit "AS IS" Please remember to change your signature date if making any changes to your report.

Would I need to do a cost-to-cure, and how would I go about it if this is beyond my SOW now. Or what are my options.

Thanks
 

Lee in L.A.

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Certified Residential Appraiser
State
California
Sounds like a pickle. I hate pickles.
How about, fee goes up by $zzz to pay for that report you wanted, + $100 for your pita.

You can stand me up at the gates of Hell but I won't back down. :peace:
 

J Grant

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Certified Residential Appraiser
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Florida
"The Appraiser observed both a large crack along a drywall seam in the ceiling and possibly a stressed load-bearing column below. The appraiser cannot determine if this was caused by foundation settlement, poor drywall instillation, or the additional unpermitted bedroom. The Appraiser suspects this could be related to the additional weight of an unpermitted bedroom addition and recommends this be inspected by a certified engineer."

I wrote the report "subject to inspection."

Their response...

****FOR ALL HOME EQUITY APPRAISALS report must be AS IS, regardless of safety issues, unfinished renovations and condition. If this order is marked Home Equity − please only submit "AS IS" Please remember to change your signature date if making any changes to your report.

Would I need to do a cost-to-cure, and how would I go about it if this is beyond my SOW now. Or what are my options.

Thanks
what?-some lenders seem desperate now to lend on anything - I suppose it is their money and their policy -but if you are uncomfortable perhaps refuse and let this client go...

disclose what you observe, that if defective beyond what is visible could be a health or safety issue but client wants appraised as is...and recommend an inspection ., I would not volunteer cost to cure who knows what it might be , could be minor or major...more like what is the affect on value, is it C 5 or what condition is the overall house in and how serious a defect does this look like... not understanding how an permitted bedroom add weight - is it upstairs?
 

Lee in L.A.

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State
California
What has been seen cannot be unseen. I would not be too happy with them right now. :cautious:
 

Terrel L. Shields

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May 2, 2002
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Certified General Appraiser
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Arkansas
Would I need to do a cost-to-cure,
No. You need to do it "as is" and recommend an inspection. If you do a "C2C" then that is to be subtracted from the final value of the cost approach, not include in the report otherwise. But I would be hunting comps with a similar defect without permits and simply do it "as is". I would apply any estimate of repairs to any comp not containing an unpermitted addition. Clearly state the results of an engineering inspection might affect the value and evoke an extraordinary assumption. Unless you are an engineer and can determine and quantify the damage (if any) then you need to stop trying to assess the problem and address liability by limiting yours...with the extraordinary assumption.
 

Bill75

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Certified Residential Appraiser
State
Texas
what?-some lenders seem desperate now to lend on anything - I suppose it is their money and their policy -but if you are uncomfortable perhaps refuse and let this client go...

disclose what you observe, that if defective beyond what is visible could be a health or safety issue but client wants appraised as is...and recommend an inspection ., I would not volunteer cost to cure who knows what it might be , could be minor or major...more like what is the affect on value, is it C 5 or what condition is the overall house in and how serious a defect does this look like... not understanding how an permitted bedroom add weight - is it upstairs?

Yeah the unpermitted bedroom is upstairs, basically where the additional living area (Bonus room) was, they walled it in as a bedroom, so I think there is significant weight on that corner and the column is unable to support it and is now bowing/cracked drywall, putting stress on the ceiling drywall which is why there is also cracking. House was built in 2006. Exactly, that's what I'm thinking, "how this might affect value".
 

Bill75

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Dec 18, 2015
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Certified Residential Appraiser
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Texas
No. You need to do it "as is" and recommend an inspection. If you do a "C2C" then that is to be subtracted from the final value of the cost approach, not include in the report otherwise. But I would be hunting comps with a similar defect without permits and simply do it "as is". I would apply any estimate of repairs to any comp not containing an unpermitted addition. Clearly state the results of an engineering inspection might affect the value and evoke an extraordinary assumption. Unless you are an engineer and can determine and quantify the damage (if any) then you need to stop trying to assess the problem and address liability by limiting yours...with the extraordinary assumption.
The thing is, no such comps exist, the neighborhood is too new. Mid 2000's. No person in their right mind would do this unpermitted, especially on a second floor with two a/c vents being located in the new room @ 140 sf designed for 300 sf living area making is functionally obsolescent.

I'm not an engineer and if I were to do a C2C, I would need to seek out an engineer's expertise, which would not be cheap.
 
Last edited:

Michigan CG

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Michigan
It is 10 PM and I am tired so ..........
1. It is possible that this could be a scope of work issue. The scope of work can change throughout an assignment and you must be able to give credible results. Therefore the situation changed upon discovery of the situation.
2. They could be in violation of asking you to provide something that might not be credible or undue influence.
 

Elliott

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Apr 23, 2002
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Certified General Appraiser
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Oregon
Live and learn. I did an appraisal, called it C5, because it didn't have carpeting (only subfloor), typical, dirty REO. The lender said, well you can't call it unmarketable, you have to cure it and call it C4. FNMA noticed the lender was pressuring me and made them buy back the loan a year later. The lender put me on a watch list, accusing me of being misleading because they had to buy back the loan from Fannie. For this lender, I now make requirements of everything, doesn't matter if its purchase, refi, or home equity. Lenders are only interested in covering their own butt and will throw the appraiser under the bus.
 

Carnivore

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North Carolina
I'm not an engineer and if I were to do a C2C, I would need to seek out an engineer's expertise, which would not be cheap.
In another thread/post someone said the AMC Phone Monkey Dot Com was telling the appraiser to get a title report and will pay you on Tuesday.

This is the same thing, they want you to get an engineers report on your dime and they will pay you on Tuesday.

Something is going on here.... I would always say NO! to those request and would put this AMC on Pay Watch because it seems like some of them are under financial strain.

You are not a Financier of their operations.

Again watch your receivables!!!
 
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