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Necessary to Categorize Cosmetic versus Critical Issues?

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ZZGAMAZZ

Elite Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
I think I asked these questions before and the Forum responses varied:

1) If the subject property includes cosmetic issues as well as those that, individually, fail to meet MPS, should one categorize them accordingly, or simply generate a list and let the D.E.U. determine which much be resolved?

2) If the issues that require follow-up inspection (CB3 and/or CB4) are described/detailed in the "Condition of the Property," do you reiterate the list of items in the Final Reconciliation, or just check-the-box?
 

Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
I list them separately. I check the subject to box and in the final analysis list the items that must be corrected.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
I break down the cosmetic items and required repair items seperately in the comments section. I then refer to the required repairs in the comments section of the reconcilation section of the report. The lender will want you to provide a cost to cure for the required repairs but not for the cosmetic items.
 

ZZGAMAZZ

Elite Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
RSW: Okey now I'm even more confused and admittedly it might show my lack of understanding of the FHA SOW. If the report is conducted and the opinion of value determined "subject to" the repairs having been made, doesn't the C2C cause a double-dip effect?
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
RSW: Okey now I'm even more confused and admittedly it might show my lack of understanding of the FHA SOW. If the report is conducted and the opinion of value determined "subject to" the repairs having been made, doesn't the C2C cause a double-dip effect?

The C2C is for the lender to know about how much it will take to bring the subject up to the mininum standard. The C2C is not adjusted for in the SA.
 

Greg Bell

Senior Member
Joined
Jul 7, 2006
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Louisiana
You do not need to provide cost to cure for MPR repairs.Cosmetic repairs are separate and some lenders want a cost to cure.Cosmetic items may be on the first page of the URAR and MPR items should be on an addendum.separating the two can be challenging.Whats is a safety hazard????soiled carpet , no MPR , raised and torn carpet are MPR , Trip hazard..
Have fun..
 

ZZGAMAZZ

Elite Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
GB: Digressing only somewhat and concerning the SOW: Do you typically determine in advance whether the lending client wishes you to address cosmetic C2C. If so do you actually write that in the SOW within the report, or in the section of the report where the C2C is provided; or it assumed that you're providing the C2C because the client wants it? (This might appear to be pedantic questions but I'm trying to get a better grasp of the literal aspects of the SOW.)
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
You do not need to provide cost to cure for MPR repairs.Cosmetic repairs are separate and some lenders want a cost to cure.Cosmetic items may be on the first page of the URAR and MPR items should be on an addendum.separating the two can be challenging.Whats is a safety hazard????soiled carpet , no MPR , raised and torn carpet are MPR , Trip hazard..
Have fun..

I believe you have it backwards. You need to C2C the required repairs and not the cosmetic.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
In the performance of an FHA appraisal, the appraiser must denote any deficiency in the appropriate section(s) (site issues in the site section, improvement issues in the improvements section) of the appraisal report. The appraiser is to note those repairs necessary to make the property comply with FHA’s Minimum Property Requirements (MPR) or Minimum Property Standards (MPS) together with the estimated cost to cure. The lender will determine which repairs for existing properties must be made for the property to be eligible for FHA-insured financing.

Cosmetic repairs are not required; however, they are to be considered in the overall condition rating and valuation of the property. Examples of cosmetic repairs would include surface treatments, beautification
or adornment not required for the preservation of the property. For example, generally, worn floorfinishes or carpeting, holes in window screens, or a small crack in a windowpane are examples of deferred maintenance that do not rise to the level of a required repair but must be reported by the appraiser.


Mark this box
“subject to repairs
or alterations”
when the appraisal involves existing housing, or new construction more than 90%
complete with only buyer preference items remaining (floor coverings,
appliances, landscaping packages (soil must be stabilized to prevent erosion)),
requiring repairs or alterations to:​
•​
Protect the health and safety of the occupants

•​
Protect the security of the property

•​
Correct physical deficiencies or conditions affecting structural integrity

•​
Complete buyer preference items for new homes, or to

•​
Complete repairs/improvements noted in work order or contractor estimates
for the Streamline K

•​
Meet FHA Minimum Property Requirements
The appraiser must indicate the extent of repairs and note this in the appropriate section of the appraisal,
or in the “additional comments” section, or in an addendum, under the heading of “Reconciliation –

Required Repairs” listing the repairs noted together with an estimated cost to cure.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Rex,

I agree with you completely.
 
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