New Construction, No Landscaping

[deturner]

Did a search and didn't find anything on this topic.

I did a recently completed new construction house that had no landscaping (no grass, shrubs, etc.) and only a big muddy yard. The improvements are complete. I've done these in the past and they were always able to get the grass thrown out prior to me sending in the report. However, this one probably will not put out the grass due to the cold weather and will wait until early spring.

What is the suggestion as to how to handle this and get the appraisal to them now without a continency to reinspect. I've thought about doing the appraisal "as is" with the estimated cost to put out the grass deducted from the opinion of value. Only problem is it will put it below the sales price.

Can this be done as a hypothetical with comments included that describe the current status, reason for not putting out grass and estimated cost to put out the grass? Thus sending the report "as is". Lender will not wait til spring for a "subject to" and a final inspection.

What other options do I have?

Dave in NC

 

[Joker]

I am assuming the seller is not seeding and planting. Therefore, the grass and landscaping do not have an impact on value or the sales price would be reduced. If the seller is seeding and planting, suggest that the price be reduced to reflect the cost to cure and it can be a private transaction between the buyer and the seller in the spring and adjust the value accordingly.
Depending on the price range, in my market, the lawn and landscape have no measurable contribution and adjustments are not common. That may be the same in your case. Report the lack of lawn and landscape and make such a declaritive statement and move on.

 

[CANative]

A lender called me the other day asking if I would ignore the "landscaping" on a property in Hopland.

The landscaping was 30 acres of Zinfandel's. LOL. B*st*rd.

 

[Robert Anderson]

USPAP provides that a hypothetical condition can only be used when:

* use of the hypothetical condition is clearly required for legal purposes, for purposes of reasonable analysis, or for purposes of comparison;

* use of the hypothetical condition results in a credible analysis; and

* the appraiser complies with the disclosure requirements set forth in USPAP for hypothetical conditions.

So, IMHO, a hypothetical condition is not really applicable in the situation you describe.

In my mind, you have two options. The first is to make the appraisal subject to the needed landscaping work. I understand why this might not be possible due to the winter weather. The second option is to reflect in your market value conclusion the impact on value of no landscaping. If I understand correctly, you do not want to do this because your value conclusion will come in below the sale price.

I don't think you have any other options.

 

[Randy Beigh]

deturner

I think you should call the lender/builder/agent and find out what was included in the sale. If landscaping is part of the deal, then just make the appraisal subject to completion per plans and specs. The lender will do a hold back for the spring completion. Shouldn't be a problem, but you need to know the situation.

It is common in this area for the front yard to be landscaped, but not the backyard. That is left to the homeowners.

My only question is, is the top soil down and ready for planting or is not ready for grass?

 

[Tom Foster]

Living landscape. Many lenders don’t like to put much weight on living things for collateral on a loan. If the house goes into foreclosure and no one is around to water those plans and grass, they die.

This is one more reason to pay attention and to scrutinize all the facts in front of you no matter how tired your work makes you. Your future potential can be found in the same world. Hope and its despair in the appraisal business does not form a whole, but rather a limit.

Tom

 

[Steve Owen]

If the situation you are describing is for sale of the property with completed yard work, which is the most typical situation, then the best way to do it is "subject to" with a cost to complete for topsoil (if needed) seeding, and straw (or turf if that's the type of yard to be done). If the sale did not include the yard work, but the buyer was to put in his own, then how to do it depends on the client. Most secondary lenders still want it "subject to" with a final. The reason for this is simple, if it is not done that way, then the yard may never be put in; I've seen quite a few of these over the years. You go back two years later and it is rock and soil with a little bit of weeds and crab grass. It does impact value in my market; most houses sell with a lawn and those that do not sell for about as much less as it would take to put one in.

Most lenders will escrow for the yard work. The subtext here is that the builder may be pushing the mb to try and get you to do something you should not do. The reason for that is that the builder does not want the escrow. But, if the escrow is not held, then there is no hook to make the builder do what he is supposed to do.

My advice is to contact the client and see exactly what they want you to do. I've done these both ways (but most are "subject to"). If they want it "as is" then you have to research the market and come to an opinon of how much less it would sell for without a lawn. (Hint: the cost of putting one in is a good starting point.)

 

[Thomas Fiehler]

Find out from the builder if the sales price includes landscaping, sod, etc. If so, then you should hold enough money for the completion of the items. Around here, the lender will escro 150% of our recommended hold. We are building a new house and it will be finished around 1st of March. The lender will hold for sod and shrubs. If you don't hold money you could be liable for the completion of those items. I ALWAYS hold money if items are not complete. I sure don't want to buy landscaping for another homeowner. B)

 

[Walter Kirk]

This happens every winter. The builders can't complete the landscaping because of the weather. If the landscaping is included in the sale you can include the builder's cost as a cost to cure, if it isn't included in the builder's contract you can estimate the cost by using M&S

 

[Thomas Fiehler]

Walter-If the landscaping is not included in the contract, why do you need to estimate for it? You could just appraise it without landscaping, adjusting for this in the market approach and have a finished report. Just curious! B)