• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

New Home....well not NEW but.......

Status
Not open for further replies.

Blue1

Thread Starter
Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Have an assignment......Home has never been lived in and is approx. 1 year old! Built as a spec home. Has a well and septic. Will FHA require a builder's cert? Well test? Septic clearance? I think so.....What's your opinion? I'm obviously a little confused. Does FHA treat an existing new home the same as proposed construction?
 

AC King

Sophomore Member
Joined
Jan 20, 2002
It is an existing home not proposed construction. You will not need plans and specs since you have a product to appraise already inplace. Do the typical appraisal with regular VC requirements.

The cost approach is still required by FHA if the home is less than 13 months old.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Be careful of the builder's trick used today.

The home is not complete until the CO is issued for a FHA/HUD appraisal. If the CO has been issued, then it is existing so follow AC's advice and do all the VC and HBS stuff like a typical FHA plus include the MS 1007, if under 13 months old. Also, list the month and year completed in the Age box on Page One of the URAR.

But if no CO, then you need the entire new home package, Builder Cert, Plans and specs, DOM's, etc. You don't need the VC sheets or HBS in that scenario. Appraise it "subject to completion" but state in the report that the unit is complete with the exception of the CO which is then made a condition of the report. Also, list it as "Under Construction" on Page One of the URAR.

Builders have quickly learned to get around HUD's VC Sheets and HBS by not having the unit inspected for a CO. And it's technically a new home until the CO is issued by the municipality.

Ben
 

Blue1

Thread Starter
Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Thanks to you all. I really appreciate the advice especially to Ben. I am going to ask for the CO first thing next week.

Bruce M
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Blue1,


Ah,,, don't PO your client especially if they do lots of new construction. The loan processors do not like the HBS or the VC Sheets to contend with and will avoid them at all costs. Why do you think the builder doesn't get the CO? He's been told by the mortgage company. most times, not to do so.

I've seen them leave stupid things to complete such as interior doors, a final plumbing hook-up, etc. Anything for the unit not to be considered complete. I had one last week that removed the two small handrails in a split stairwell to the basement-the metal brackets were installed on the walls but the wood hand rails were laying on the kitchen floor. They know and you know they can't get a CO without handrails so they stick it right in your face. They are smart-to their advantage, of course.

If you ask for the CO and you get it for your file, you must use the HBS and VC Sheets. The lender then has to submit the HBS to the buyer five days before closing, which they hate, or barring that, if closing is within five days of when the buyer sees the HBS, they must type up and get a signed, waiver letter from the borrower. They really hate that.

Did you notice any final inspection stickers on the electrical service box? That would give you a clue if it was inspected already. Barring that evidence, I would assume that it is still under construction and condition the report for the lender to ask the builder for a copy of the CO. You're not a messenger boy that's supposed to run around looking for a CO. Don't waste your time looking for a CO and completing the HBS and VC sheets. Condition the report for the CO. It's a shell game. Play it well to your advantage.

Ben
 

Blue1

Thread Starter
Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Ben, thanks again for the advice but this is not a typical contractor it's an owner-builder (land owner) and there is a well and septic. Lender is afraid that they can't get a termite clearance if it's new construction. Doesn't think the ground was treated before construction. Now I'm totally confused.................
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Blue1,

There's a specific mortgagee letter on the HUD site regarding new construction and termite certifications. The link is not working for the ML's right now but it maybe up tomorrow. I will try to find it for you. Regarding the lender, I don't think HUD will be thrilled with chemical pre-treating/poisoning when there's a well involved.

Wait until I can find the specific ML you can point them to. Or you can go ahead and do it as existing if the CO has been issued or wait until the CO is issued and VC it to death.

Ben
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks