Nightmare REO

[Kathy in FL]

REO assignment. SFR home, 1,000 sq.ft. custom built home on 12 acres. Also on 12 acres is a newer doublewide (right next to the home) and a concrete block building with its own address that was used for a family-run sewing factory. (In a rural area, mind you.) The house is history. It was built in 2000, but has been pretty much destroyed. The former homeowners took out walls, removed the kitchen (flooring, counters, sinks, ceiling and all!), stuffed unidentifyable things down the toilets, and put globs of peanut butter into all of the outlets and light switches. (This house has been vacant for over six months...you should have smelled it...I don't think I'll eat peanut butter for a long time.) It's going to cost more to fix the house than it's worth. I would recommend fixing it with a bulldozer.

The DW is not too bad, though, and is fixable. The commercial building is OK.
All three buildings have different street addresses, but can't be split due to zoning. (The idiot put all three within 100' of each other on one end of the 12 acres.)

Here's the kicker...the broker thinks they built the house WITHOUT PULLING PERMITS. Therefore, you can't remodel, you can't even turn on the power without an engineer saying the structure is OK.

Have you ever dealt with this before? What are the issues that are going to come up? How on EARTH am I going to support a value? (No similar comps, of course, with no permits.)

ARRRGGGHHH!!

Kathy in FL

 

[Jeff Horton]

What value? LOL

Seriously you have a negative adjustment on removing the house or no value and just leave it standing.

DW could be valued from NADA or talking to local dealers. I have done both.

Commercial building. Cost approach?

Just some food for thought. But I love a challange. Anyone can do tract houses in a subdivision. :mrgreen:

 

[Judy Whitehead (Florida)]

It sounds to me like it has reached the end of it's economic life! :lol:

Seriously, we have done REO's where the best thing to do is remove the house...or appraise the parcel and only give value to what YOU think contributes value to the property. It sounds to me like the house as it is presents a negative value to the property. And can't you check with someone at the county whether any permit was ever pulled? We now have them online for a few years back (we are becoming quite "uptown" now) but I used to call the building department and if I allowed them "government time" to look it up, they were usually cooperative.

 

[Kathy in FL]

Well, got confirmation today...no permits on the house.

I agree with everybody so far that says the house has negative value, or no value at all.

Client is a major AMC who wants it on a URAR with 6 comps. (you know, 3 as is, 1 as repaired, 2 listings.) :rofl:

I think they need a vacant land form with the cost value of the sewing building, or even better, a narrative. They, of course, are being stubborn. Surprise.

Yep, anybody can do cookie cutters. It takes a REAL appraiser to do the headache inducers.

Flying by the seat of her pants with no data.... B)
Kathy in FL

 

[Linda Lynch]

I had one sort of like that last week...only it didn't even have the other buildings to add value to it. Highest and best use..demolition with the only value being in the land. (even well and septic were no good and would have to be completely redone.) What cracked me up was a call from an agency that was trying to help the owners resolve their financial problems. They tried to insist that the property was worth at least $130,000. Yeah, right!

 

[Tom Foster]

What I do when I get an order like that: If I'm busy - I refuse the order. If I'm not busy, I do it. I worked in the REO department back in 1994 for a large bank and that's all I apprasied for a few years. I saw things you would not believe( including a dead body of a homeless man ).

Get a small hand gun for your protection and learn how to use it.

If your working for a broker, some will want you to "overlook" things - don't do it.

Mortgage brokers need to arrange themselves in hierarchies of pre-potency. That is to say, the appearance of one need usually rests on the prior satisfaction of another, more pre-potent need.

Man is a perpetually wanting animal. Also no need or drive can be treated as if it were isolated or discrete; every drive is related to the state of satisfaction or dissatisfaction of other drives.

It's like they are the Queen bee and the appraisers are the worker bees !!!!!

 

[Mike Garrett RAA]

Check with the county to find out what has to be done to make the property legal. Estimate the cost to cure including obtaining all the inspections and permits. Charge accordingly.