New MH on owner's site

[mp2277]

It is my opinion that the contract section is left blank because it technically is not a sale. It is new construction. For years I have submitted the reports without the contract section filled out and noted the terms of the agreement in an addenda. On recent report the reviewer is insisting I include the construction agreement in the contract section as if it is a purchase. I am interested in your thoughts. I can't believe I am wrong and twenty years of reports have been accepted as submitted, many to this same lender. Thoughts?

 

[Terrel L. Shields]

What construction agreement? A MH is a contract sale usually, right? So, they want it? Well, wouldn't die on that hill but it's silly.

 

[mp2277]

What construction agreement? A MH is a contract sale usually, right? So, they want it? Well, wouldn't die on that hill but it's silly.

"Is the property seller the owner of record? Yes or no? "

 

[CGinMN]

I have seen it done both ways, but you are correct that the analysis of a construction contract doesn’t technically belong there because there is no “subject purchase transaction” if the borrower owns the lot.

You can either change it, or try to explain your reasoning to the reviewer. If you want to convince the reviewer, you can look up the UAD specs in Appendix D, which I think adds further support to your position.

https://sf.freddiemac.com/docs/pdf/requirements/uadreqs.pdf

You still should analyze the construction agreement somewhere in the appraisal.

 

[sputnam]

It is my opinion that the contract section is left blank because it technically is not a sale. It is new construction. For years I have submitted the reports without the contract section filled out and noted the terms of the agreement in an addenda. On recent report the reviewer is insisting I include the construction agreement in the contract section as if it is a purchase. I am interested in your thoughts. I can't believe I am wrong and twenty years of reports have been accepted as submitted, many to this same lender. Thoughts?

If the owner of the property is different from the borrower... then it might be a sale. There is no prohibition against reviewing and summarizing the construction agreement... and in fact, you really do have to read it to know whether it includes a sale of the site or not. Whether you put your summary in the contract section on the form or in comments somewhere else... really doesn't matter.... except maybe to your Client.

 

[Zoe]

Okay, from what little I know, fill out the section. The appraisal is completed "subject to" as of the effective date.

Question?

Summarize your analysis.

MV opinion if very unique.

 

[Zoe]

You can pm me if you want additional information.

 

[Tom D]

I suppose they want the cost of purchase contract and maybe specs of the mh. Just like they would want the cost and specs for a house you are building on your own lot. That's my guess.

 

[mp2277]

If the owner of the property is different from the borrower... then it might be a sale. There is no prohibition against reviewing and summarizing the construction agreement... and in fact, you really do have to read it to know whether it includes a sale of the site or not. Whether you put your summary in the contract section on the form or in comments somewhere else... really doesn't matter.... except maybe to your Client.

Yes, the borrower is the owner or of course it would be a sale and the purchase contract for the home is reported in the addenda.

 

[mp2277]

I suppose they want the cost of purchase contract and maybe specs of the mh. Just like they would want the cost and specs for a house you are building on your own lot. That's my guess.

All of that is already included