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Lender Switcharoo

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Larry Davis

Freshman Member
Mar 20, 2002
I did a subject to completion per plan & specs appraisal for a lender and investor. The investor initiated the appraisal order. He bought it as a foreclosure for $280,000. After substantial upgrades, the appraisal supported a value of $470,000 with plenty of comparables in the neighborhood. Now, suddenly, I have been told that the appraisal won't work subject to completion per plans & specs because the investor will have to make the necessary repairs first. He doesn't want to do this. I told them the normal way is to do a construction permanent loan with draws. Then they said they cannot do this either and want to do an "as is" appraisal as a refinance. Now I find out that they are only putting $12,000 into the home. They want a refinance appraisal, but I have actual knowledge that they intend to immediately sell the home. I believe this implies that the home is owner occupied, although the box is checked vacant. I'm kind of getting sick and tired of this kind of routine. 8 out 10 appraisals I'm fighting some kind of pressure to ignore something.

Mountain Man

Elite Member
Jan 15, 2002
Professional Status
Certified General Appraiser
They are trying to pound a square peg into a round hole. He wants a Fannie/Freddie loan...... for his investment deal. Won't work, and they are trying to get you to put your livelyhood on the line. Might loose a client, but I'd stick to my guns. But then again, is this client worth keeping???

The investor needs to work with a local bank, for an in-house loan, then market it like any other spec. home.

P.S. don't forget to report the recent sales history, even as a foreclosure. ;)
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