New home under construction, changes, please raise the value

[Tim Hicks (Texas)]

I know I am not the only one getting this request. How do you handle it? Should you just make changes to the appraisal for free? I just received a e-mail from a former client that wanted me to just raise the value on my pre-construction appraisal report (no details, no new sales price disclosed). When I told them I needed a detailed list of changes and that it may need an appraisal update for $200, they went ballistic. She felt that I should not charge anything over the original agreed fee. My responding e-mail simply stated that it may need an appraisal update, but I have no idea without knowing the changes. This lender always takes an argumentative and attacking stance which is why I don't do business with them any more. I get this request for raising the value all the time on new home construction and many times it is for items that rarely affect the value. How do you guys handle this request? Silly me, I expect to get paid when they make changes that my esp did not forsee. Gee, you would think I would not have any clients left with my attitude, but I seem to have plenty of work.

 

[Caterina Platt]

My reply might be something to the effect of 'When this customer has a complete set of blueprints and plans and then wants to change them midstream, we all expect there to be a charge, correct?' Hopefully the LO will mumble something to the effect of, 'Uh, ya I suppose.' (knowing full and well where you are leading.......) 'To update and change the appraisal, we are following a similar process. Please submit to me a list of the proposed changes and a new purchase agreement and we will see if this changes the appraisal or the value. '

Good thing you fired them. I hope you've been paid already!

 

[rtubbs]

Tim, I do a good number of appraisals based on plans & specs. I'll have to say that I've never been asked to raise the value during the construction phase. If the borrowers make changes that increase the value, I usually am asked to reappraise the property after it's complete-which I do as a refi and charge a reduced fee (sometimes).

I'm in the process of working on one as we speak. However, it took them over a year to build and the UW wants a new appraisal anyhow. I'm doing that one for a full fee.

As you are, I would be reluctant to change a value during construction-without at least an update. Hold fast to your principles.

 

[larryhaskell]

Tim

Based on the way you stated your questions, I think you answered them yourself. If there are significant changes (i.e. additional upgrades) there should be an update to the purchase agreement with every item detailed. If those upgrades were to make the present comparable sales inappropriate and you would have to search for new sales, I believe you are now doing an update. You certainlt have a right to charge for your time. I charge additional $$$ based on a combination of the quality of the client and time spent. I typically charge a minimum of $50.00 per hour and up. Good luck.

 

[Tim Hicks (Texas)]

Don't you just love it when the lender tries to tell you that you are difficult and the only appraiser they deal with that expects things to done the correct way. I fired this lender because they told me I tried to make too many gray areas, black and white. Gray areas like: previous sales contracts, previous history, previous listings, actual costs to cure (because I used an investors actual cost to cure from his mouth ona re-hab with $20,000 in profit for him) and repairs that are going to be done, but shouldn't be addressed as needed in the appraisal. Actually, I knew when I received their e-MAI any response over "here's your new free appraisal" would bring about complaints and gripes.


P.S. When did "facts" become "gray areas"? I missed the memo.

 

[Farm Gal]

Yup:

Sounds like fire the client time!
Go celebrate your freedom from abuse with the beverage of your choice!

 

[Tim The Enchanter]

Nothing longer than a few paragraphs (on occasion) for free!

 

[Terrel L. Shields]

I get idiot requests from UW's alright, and they want it for free, but they learned a long time ago, I will NEVER sign off on a Plans and Specs which has changed.

My favorite two was the time the UW wanted a list of other properties that used spring water instead of a well or municipal supply because I truthfully stated the property water source was a spring.

Another was the UW that asked I change an address because she had talked to the Post Office and they said they would not deliver mail to 12xxx Tosta Verde Lane, only to 12xxx Tosta Verde. So I sent her the 911 map with "Tosta Verde Lane" printed on it with the following note. I respectfully must refuse your request to alter the address from that found on the attached official county 911 map as to do so might be misleading in violation of USPAP.

 

[bobburnitt]

Tim,

Is it one of the banks in Johnson County? Just nearly every one of the banks that I have worked for over there expects that kind of crap.

I was working for a shop in Cleburne that had a bank in Burleson that we did some work for. They were all the time asking for "Recertification of Value" on new constructions. One of the Loan 'officers' told us that they would no longer pay for Re-Certs. She said they were "nothing more than a letter, and that she expected us to provide them as needed to keep their business". I told her that "we" did not work for free, and that a recertification of value is an appraisal report with all of the duties and responsibilities of any other appraisal report, therefore, she would not be getting them for free. She called the owner of the shop, and he wussed out, and gave in. I told him to get someone else in the shop to do any and all of their work, because I would not do it. I don't like Recerts anyway. To quote Ken Kaiser, the former chair of the ASB " RE-Cert what in the Hell is that?" Now that I have my own shop, I don't do them for anyone. I do new appraisals, no "re-certs".

In Johnson County it is nearly as cutthroat as it is in Ellis County. There are a couple of number hitters in the Cleburne area that pander to whatever the locals want, rules of the game be damned. If you are going to compete with them, you are going to have to be as sleazy as they are. I don't want to be in this business that bad. Screw 'em.

I have worked for nearly every lender over there and so many of them think that an appraisal is nothing more than a piece of paper that a so-called appraiser can simply fill out any way they want it. If you don't do it, you are an uncooperative S.O.B. because they have people that do it for them all the time. I know how they are.

BB in Texas

 

[Terrel L. Shields]

I don't do them either, and subsequently get very few mortgage appraisals at that. I had to chew on one of my subcontractors the other day about accepting an assignment from a mortgage co while I was out of the office and she happened to be there. I said, you do it, and you mess with 'em. I am not, except to state clearly in the comments that I won't update, recert, etc. anything to do with this property after the report is submitted.

ter