Lumber Adjustment

[mintmajesty]

Hey folks! Have you all heard of this lately? New construction, appraisal completed October 2021, 90% complete. 1004D ordered first week of November. Appraisal legitimately appraised for purchase price.

Fast forward to last week, the builder emailed me a copy of the lumber invoice. $17k more than what was in the original plans and specs. The builder had the gall to ask if I would amend the appraisal because there was some concern about the loan.

have you all experienced this and how did you handle?

 

[Terrel L. Shields]

New assignment. Costs have gone up but the market is the market. And the market evidence will tell the value. The builder is not the CLIENT - don't allow them to say anything to you and notify the client of the ex parte contact.

 

[mintmajesty]

New assignment. Costs have gone up but the market is the market. And the market evidence will tell the value. The builder is not the CLIENT - don't allow them to say anything to you and notify the client of the ex parte contact.

See, that’s what I said! I actually called the lender that evening to ask them if they needed anything (because of the call from the builder) and the lender had no idea of the request. I was lucky that it was a lender who doesn’t go through AMCs or else it would have been hell to explain to some frontline AMC staff.

I told the lender it would be a new assignment and they seemed understanding, but like i said, they didn’t have any records of the builders request/document.

 

[shrubberyvaluation]

Hey folks! Have you all heard of this lately? New construction, appraisal completed October 2021, 90% complete. 1004D ordered first week of November. Appraisal legitimately appraised for purchase price.

Fast forward to last week, the builder emailed me a copy of the lumber invoice. $17k more than what was in the original plans and specs. The builder had the gall to ask if I would amend the appraisal because there was some concern about the loan.

have you all experienced this and how did you handle?

cost does not equal value, done.

 

[residentialguy]

cost does not equal value, done.

Not always, but it can.

 

[sputnam]

The builder has no standing to ask you to revise anything... unless they are also the Client. Refer them back to the Client. When the Client contacts you, explain the sources you used to develop the cost approach and you calmly asked... why didn't the builder provide me with information regarding the increase in his lumber costs before I completed the appraisal. IF you want to, you can certainly revise your building cost data.. making sure that it the costs as of the effective date of the appraisal. Whether you revise or not is up to you. If I felt like I'd made an error, I would do it. Otherwise, probably not... at least not for free.

 

[KONA]

Remember who your client is !!

 

[TerryRohrer]

I would not respond to the builder and I would not offer to complete a new assignment. If you start doing this, soon you will be parsing moves in lumber futures in your appraisals, rendering them indefensible. Just repeat that you stand by your appraisal as originally submitted.

 

[sputnam]

I would not respond to the builder and I would not offer to complete a new assignment. If you start doing this, soon you will be parsing moves in lumber futures in your appraisals, rendering them indefensible. Just repeat that you stand by your appraisal as originally submitted.

And... if you refuse to consider it, you lose a Client. If the Builder does significant business with that Lender... they will kick you to the curb without any remorse at all.

 

[Tom D]

you did the right thing. direct lenders do make it easier, but you can always refer anyone to the buyer's agent, or buyer, who can refer it to the lender.
i suppose the air statement wouldn't let you be influenced by the builder. however, the perception could be looked like you were.