• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Listening to loan officer

Status
Not open for further replies.

MarkRichmond

Thread Starter
Freshman Member
Joined
Jan 16, 2002
Hi,

I just sent in an appraisal on a house that is 95 years old. There were some big cracks in the plaster surrounding the chimney upstairs which I disclosed along with a picture of the affected area. It is my guess that the cracks were from water damage many years ago but I am not an expert so I just disclosed what I observed and refered them to the picture.

The loan officer calls me up and says that "we have a problem" She tells me that I should just put in the report that the cracks are cosmetic and that the cost to cure is under $500.

What would you say to this? What would you put in the report? I'll write how I handled it later.

P.S. For anyone who might be interested in seeing the picture email me and I will shoot you the picture.


Mark
 

Ray Ohler

Sophomore Member
Joined
Jan 15, 2002
Mark, this is one of those questions that is virtually impossible to give a "straight and direct" answer to. Not seeing the extent of the cracks, its hard to visualize just what they may be (cosmetic or major and/or structural). I can only say that if I was doing an inspection and noticed cracks (hairline or only slightly separated) I may make a mention that they APPEARED cosmetic in nature with the disclaimer that I am not an expert and analysis was beyond the scope of the appraisal. Then again, if the cracks were pronounced (large, say 1/4 inch or more and uneven) I MIGHT make a suggestion for repair or a structural engineering report. However, like I said, it is hard not actually seeing the whole problem and the surrounding area. You are the one who has to make the call and hopefully you will never hear about it again.
 

Dave Smith

Senior Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Wisconsin
Mark:

I would simply report what I observed and invite anyone that cared about the possible problems associated with the cracks to have them inspected by a qualified contractor or home inspector. Thay way the inspector says there is a problem or there isn't a problem. As the reporter of the cracks you didn't create a problem. You simply told about the possibility of a problem.

I would not change the wording simply to satisfy the LO. Its your license or certificate on the wall and its your A___ on the line, not the LO's. If you feel you were objective in reporting then stick to your guns.
 

Robert Muir

Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Utah
Just this morning, I had a call from a lender who was upset about some cosmetic items also. It seems that I had put the words average/fair & fair somewhere in the appraisal and it would not pass underwriting. The house has new siding, new roof cover, new windows, and new exterior doors, but the interior is still in rough shape, carpet needs replacing (4 dogs, 7 teenaged puppies), water damage from past roof leaks, water damage in bathroom walls from unventilated steam. All in all the interior needs some work, but I explained this and that a combination of the good items on the outside and the fair items on the inside put the estimated overall condition as “Average”.
Still no good, because the word “fair” cannot be in an appraisal report. I told the lender to call me after they review Fannie Mae’s guidelines on appraisal reports. Haven’t heard from them yet!! I told her I have to report what is there or not there and in what condition it is. She wanted me to gloss over it and make it just cosmetic and remove the word fair.
I have used the cosmetic approach before, but only if it falls within my parameters of cosmetic and does not affect the marketability of the property in a large way. I would think that $500.00 would be an adequate cutoff point. My rule of thumb is what would I be willing to pay for if it comes back on me.
In my opinion cosmetic is something that the general homeowner can easily repair themselves (such as painting) and not something that would require a contractor and lots of work. If in doubt require an expert's opinion on the foundation system to determine if there is some settling or if there is possible repairs that would be required.

Bob
 

Dan Leggett

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Mississippi
No problem. Inform her she can attach her comments, signed & using her letterhead, to the appraisal and sign at the bottom right of the appraisal form.
 

Charlotte Dixon

Senior Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Delaware
Mark, I would have handled it exactly as you did. If anything looks suspicious I mention it. I don't say "it appears to be cosmetic" I just report what I see and don't say what it "appears" to be. Then I recommend an inspection by a licensed contractor/engineer to determine the seriousness of what I noted. Many older homes I see have that brick chimney in the attic leaning. I've been told that's typical in older houses....could be, could not be. I always call for an inspection and the Loan Officers are always angry. Tough cookies!
 

Ray Ohler

Sophomore Member
Joined
Jan 15, 2002
going to. Mark, like I said before, the problem lies in posting questions on a forum which are, at the very least, difficult, if not impossible to adequately address and/or answer and because when you read things SOMETIMES they are misunderstood for various reasons. YOU saw the crack. YOU have to deal with your client. YOU have to make the call. Know what? The heck with it. If an "appraiser" does not have enough common sense to tell whether something is "cosmetic" (such as a HAIRLINE crack in a PORTION of a chimney) then that "appraiser" should not BE an appraiser and/or get some "basic" knowledge. I wrote this before; I had a "building inspector" (for lack of a better word) once ask me what that thing in the corner of the basement was. It was an OLD water heater. It is the INDIVIDUAL that has to make the call sometimes. If someone is going to kill a deal, be it a refi or a sale (because everyone is so nerved-up these days), over what APPEARS to be a cosmetic problem, (hey, maybe not, maybe if I SAW it, I might call for an inspection) then they are going to be doing work for new clients every other week. I also don't do that much mortgage work so I just call it as I SEE it with "appropriate" comments and never get a question. Appraisers who I know do virtually 100% mortgage work, well, what can I say. Some are GOOD, some NOT SO GOOD and some should be pumping gas in New Jersey (I think they still pump it there) or walking Front Street in "hot pants" and a "tube" top (I myself would NOT look good in the latter). The last comment(s), before someone takes them the wrong way, were NOT directed at ANYONE in particular. I've been known to "jump the gun" myself once in a while (last time I THINK was in 1971). :oops: Anyone know if they make anything STRONGER than Thoridizine?
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks