New condition property with damaged flooring "as is."

[alebrewer]

Answer w/o real world real estate experience

True - I've never purchased a home, or had to pay for repairs. That is an inane assertion unless you personally know me - which you don't.

Thinking like a Potential Buyer; $10,000 discount; $240,000 PP (just because I can't see what's under the damaged flooring, perhaps sub flooring repair, now it becomes a "Time/Cost and rip out & repair" item or items ??)

I don't disagree with this, IF the status of the subflooring is unknown. That was not a condition in the OP, though. Per the OP: "Tile flooring in two places was damaged and in the process of being replaced at the time of my inspection." You guys are REALLY making this too hard. You'd really discount a PP by $10k for damaged tile flooring in two places - that was in the process of being repaired? Could be wrong, but I kind of doubt the seller would see things the same way...

 

[J Grant]

Hi,
I completed a condo conversion recently. A row house in Washington, DC that was converted into four condos, and thoroughly renovated. The property is in similar condition to new construction, except for one thing. Tile flooring in two places was damaged and in the process of being replaced at the time of my inspection. I completed the report subject to the repair, and provided an estimated cost to cure. However, the client has come back and requested that the report be done as-is because the damaged flooring is not a health and safety concern. They suggest making a straight adjustment across the board in the sum of my estimated cost to cure. I believe that this would not be a supported adjustment. It presumes that cost is equivalent to value, which is not the case. The actual impact of marketing a property that has been thoroughly renovated and is in new condition, but has damaged flooring cannot be proven by the open market, because it would take extraordinary circumstances for anyone to attempt to market a property in good condition without repairing the damaged flooring. And thus, no such comparable properties exist to extract a supported adjustment.
How would you handle this request?

The OP created this mess, clean it up! You made it subject to repair, so either the lender has to agree to follow it out to the 1004D, or remove the subject to repaired condition- and explain why, then the question is should an adjustment be made since repairs were already in progress. Was the tile repair completion in the sales contract?

BTW I have never had a client request removing a subject to repair or completion- then again i see lenders and clients becoming very aggressive this past year ...

The above question is contradictory - the appraiser says it would take "extraordinary circumstances for anyone to market a property in good condition without repairing the damaged flooring", but they were in the process of repairing the damaged flooring on the inspection date.

 

[alebrewer]

BTW I have never had a client request removing a subject to repair or completion- then again i see lenders and clients becoming very aggressive this past year ...

This is fairly common - most notably when the appraiser makes an appraisal 'subject to' items that would not rise to the level of safe/sound/secure (or safety/structural if you like that better). Example might be requiring a handrail for a porch with only one step (I've personally been involved in this particular situation).

 

[J Grant]

This is fairly common - most notably when the appraiser makes an appraisal 'subject to' items that would not rise to the level of safe/sound/secure (or safety/structural if you like that better). Example might be requiring a handrail for a porch with only one step (I've personally been involved in this particular situation).

agree, it can happen... for legit reasons too!

 

[jay trotta]

True - I've never purchased a home, or had to pay for repairs. That is an inane assertion unless you personally know me - which you don't.


I don't disagree with this, IF the status of the subflooring is unknown. That was not a condition in the OP, though. Per the OP: "Tile flooring in two places was damaged and in the process of being replaced at the time of my inspection." You guys are REALLY making this too hard. You'd really discount a PP by $10k for damaged tile flooring in two places - that was in the process of being repaired? Could be wrong, but I kind of doubt the seller would see things the same way...

Back when I was Selling property had a guy base an offer on replacing a shag carpet in the Condo; he was offering $20k less than the asking.
Got an estimate from a carpet company; $5,000 to replace it all. He wanted $10k minimum or no deal.........never can predict what or how a potential Buyer see's a problem.
The Question is what exists Under the damaged area's ?? (IE: altering the view here a bit; did a property where the Owner buried a 50 gal. drum of oil in the ground - can it be determined there is no seepage from a visual observation ?? - I know extreme, but you get the point...I would assume).
The only one who cares about the Seller is the Agent representing them.

 

[J Grant]

Back when I was Selling property had a guy base an offer on replacing a shag carpet in the Condo; he was offering $20k less than the asking.
Got an estimate from a carpet company; $5,000 to replace it all. He wanted $10k minimum or no deal.........never can predict what or how a potential Buyer see's a problem.
The Question is what exists Under the damaged area's ?? (IE: altering the view here a bit; did a property where the Owner buried a 50 gal. drum of oil in the ground - can it be determined there is no seepage from a visual observation ?? - I know extreme, but you get the point...I would assume).
The only one who cares about the Seller is the Agent representing them.

They already have a sales contract price, which included the buyer knowing repairs were being made . I bet the SC has a clause that tile floor repair be finished. So there was no affect on price, the OP created a mess and/or his client did....the SC price is already done, now the OP has a client asking to remove a subject to condition, has nothing much to do with value , he already valued it as if repairs were done and they are in fact being done.

 

[DTB]

True - I've never purchased a home, or had to pay for repairs. That is an inane assertion unless you personally know me - which you don't.

Your answer did not reflect real world market reactions, therefore...

I can only go by what you post.

 

[alebrewer]

Your answer did not reflect real world market reactions, therefore...

I can only go by what you post.

and what, specifically were, the real world market reactions to the OP's post, praytell? I'm guessing you've done some kind of market analysis for the OP?

 

[DTB]

and what, specifically were, the real world market reactions to the OP's post, praytell? I'm guessing you've done some kind of market analysis for the OP?

Post 79 had my "adjustment". it is based on buying and selling hundreds of properties over a 40 year period and appraising several thousand more.

I don't think human nature is much different in the OP's location.

That's why it's called real world experience and not market research.

Good luck to you if you think most people are leaving 1,000s on the table, just for fun.

 

[alebrewer]

Post 79 had my "adjustment". it is based on buying and selling hundreds of properties over a 40 year period and appraising several thousand more.

I don't think human nature is much different in the OP's location.

That's why it's called real world experience and not market research.

Good luck to you if you think most people are leaving 1,000s on the table, just for fun.

so you'd adjust your MV down by $9k for this: " Tile flooring in two places was damaged and in the process of being replaced at the time of my inspection."? (a) I sincerely would love to be a GC in your market, and (b) good luck finding market support for that kind of adjustment...