Newbie needs help

[Wolfe54]

I am 2.5 years into my appraising career. I don't have any experience with REO's and today I did an inspection on one. I have noted all repairs needed which are not many, mainly deferred maint. The property manger who works for the borrower was there to start the fixup process and he gave me estimates on the repairs needed. I told all parties I would have to return and get photos of repairs completed (old 442, new 1004D) and they expected that. Do I mark the appraisal "as is" or "subject to"? I plan to disclose all the cost estimates from the property manager and include his name and ph#. I took many notes and photos and plan to disclose all. What else should I do? Thanks to all

 

[Don Clark]

I am 2.5 years into my appraising career. I don't have any experience with REO's and today I did an inspection on one. I have noted all repairs needed which are not many, mainly deferred maint. The property manger who works for the borrower was there to start the fixup process and he gave me estimates on the repairs needed. I told all parties I would have to return and get photos of repairs completed (old 442, new 1004D) and they expected that. Do I mark the appraisal "as is" or "subject to"? I plan to disclose all the cost estimates from the property manager and include his name and ph#. I took many notes and photos and plan to disclose all. What else should I do? Thanks to all

That dependson whether the client ordered this as an "As Is" appraisal or not. If it is as is, then note the repairs needed, and, if you have cost estimates from a reliable source you can use that. You should, as soon as possible, take a course in the appraisal of REO property. The AI as well as NAIFA have such courses and text that you can use.

You should, in any assignment, develop a scope of work by communication with your client at the time of the assignment. Since you did not do that, go back to the client and ask them whether or not it should be as is or as repaired.

 

[ghrousseau]

I am 2.5 years into my appraising career. I don't have any experience with REO's and today I did an inspection on one. I have noted all repairs needed which are not many, mainly deferred maint. The property manger who works for the borrower was there to start the fixup process and he gave me estimates on the repairs needed. I told all parties I would have to return and get photos of repairs completed (old 442, new 1004D) and they expected that. Do I mark the appraisal "as is" or "subject to"? I plan to disclose all the cost estimates from the property manager and include his name and ph#. I took many notes and photos and plan to disclose all. What else should I do? Thanks to all

We are not your client so we can't help define your sow. You should be discussing the assignment with your client and ask if they want the report "as is" with a cost to cure adjustment or "subject to." Also, a property manager who works for the borrower is not a disinterested person. I would not rely entirely on that persons opinion of repair costs. Remember if the property is appraised as is and you have cost estimates that are inadequate then you may be overvaluing the property. Also, a property manager is only concerned getting a property up to standards for a rental. These would not be the same costs as getting a property up to standards to be marketed and sold as to a typical owner occupied buyer.

 

[stefan olafson]

I concur with the first two posters, develop a scope of work with your client...

AND

Welcome to the Forum, be brave and continue asking questions....

 

[JRS at OBX]

Welcome to the Forum, be brave and continue asking questions....

True!!

 

[Mike Phillips]

Yes, I agree with Poster 1 and 2 - also Welcome!

I'll add, when you call, ask the type of value they are looking for - perhaps they will supply you with a definition. Note: I'm not asking whether it is an "as is" or "as repaired" valuation.

You won't be using a mortgage related appraisal form so you will have to define the value(s) you express an opinion on in your appraisal report. The standard definition of market value used by Fannie might be appropriate, however, (for instance) if the marketing time is restricted (by the client) to < 90 days and your typical marketing time is 120-180 days, you would have to write a definition of value that meets that specification.

The USPAP gurus might tweak that but don't forget to get clear on it before you release the report.