No sod, "As Is" or "Subject To"

[CSP 49]

Completed an inspection yesterday (FHA) where the entire yard is dirt, dead thatch and a few weeds. While I've appraised some houses with bad spots I can't recall appraising a house with a yard needing 100% replacement. It looks like a yard that has been killed off in anticipation of resodding.

Is grass/sod a cosmetic item? This house is newer construction located in a PUD where I'm 99.9% sure that not only is grass/sod required I'd be willing to bet the type of grass is also specified in the HOA docs.

St. Augustine grass is the typical choice in most communities so its fairly expensive to sod a yard. Its not just throwing down grass seed its having pallets of sod delivered and thrown.

Is grass/sod a cosmetic item and "As Is" the way to go or with the level of expense and anticipated HOA enforcement is this "Subject To" sod replacement?

 

[OminousRun]

Since's its FHA I would just do it "as is" and make either a condition or appeal adjustment. Then I'd also write a statement in the report that the grass was not in place/was dead at time of inspection.

Grass is not an FHA requirement. You'd be hard pressed to find any mention of grass, landscaping, etc in any of the HUD Handbooks. I'm 99% sure there's nothing in there regarding it.

Let the U/W determine if they want sod in place before they close the loan, but I doubt they would.

 

[CSP 49]

Since's its FHA I would just do it "as is" and make either a condition or appeal adjustment. Then I'd also write a statement in the report that the grass was not in place/was dead at time of inspection.

Grass is not an FHA requirement. You'd be hard pressed to find any mention of grass, landscaping, etc in any of the HUD Handbooks. I'm 99% sure there's nothing in there regarding it.

Let the U/W determine if they want sod in place before they close the loan, but I doubt they would.

This was my original thought but taking the disclosure statement further that the HOA will likely enforce the sod requirement and this could be a substantial expense. That's my concern, the expense for the new homeowner due to the requirement for grass.

For example, interior paint, the HOA doesn't care. Sod, the HOA does care and can enforce as a basic condition/criteria to ownership in the community. I'm probably overthinking this.

 

[OminousRun]

This was my original thought but taking the disclosure statement further that the HOA will likely enforce the sod requirement and this could be a substantial expense. That's my concern, the expense for the new homeowner due to the requirement for grass.

For example, interior paint, the HOA doesn't care. Sod, the HOA does care and can enforce as a basic condition/criteria to ownership in the community. I'm probably overthinking this.

I probably didn't highlight enough in my original post, but I would still make it "as-is" and in the addendum/comment about the sod I would just state exactly what you did here; that the subject property/owner could be in violation of HOA by-laws if the sod is not brought up to minimum HOA property standards. As long as you disclosed that and let the U/W know exactly what deficient sod means to the property (possible additional financial implications) then it puts the ball in their court.

FHA changed their appraisal guidelines a few years ago. Instead of the appraiser putting everything "subject-to" including the VC sheets, and anything else they thought might be an issue, they now want everything "as-is" with full disclosure as to the deficiencies of the property. Then they want the U/W to make the decision based on their guidelines as to what they want completed/repaired prior to closing.

Bottom line, just report everything, make it "as-is" and let the U/W decide what they want to do. We are just the reporters, not the decision makers.

 

[Doug Smith SRA]

Cost to Cure/Intent

Going back to the original intent of FHA, it was long held that anything in terms of repairs that would inhibit the new homeowner from paying back the loan, required correction prior to closing. FHA never basically gave up this intent, despite a shift to more relaxed standards about hand rails, and cosmetic wear and tear etc. FHA now hangs their hat on safety and security etc. but the intent is still in the background.

Here, it is necessary to call for sod, since the expense of putting in the sod will be bourne by the new home owner. It is a legal requirement since it is part of the covenants. It is not a cosmetic item. The appraiser builds his case in the HBU analysis of the discussion of the ideal improvement. Not only do competing properties have developed landscaping, it is "legally" required. An improved property without sod is legally impermissible. So say you in your HBU summary.

Develop a cost to cure, require sod.

Your selection of comparables took into account your highest and best use analysis and likely all have developed landscaping. If you do not require sod, then you will have to adjust for sod in the comparables. Ask yourself if it is easier to call for sod or go through the analysis of determining an adjustment.

Doug
Every appraisal a masterpiece

 

[Doug DeMars]

Yikes! IMO, I would ignore it. (of course, I live on the edge) This type of item related to CCRs is in the same vein of what kind of cars can be parked in the driveway or if RVs must be behind the fence or if you must have window blinds, etc...

I've made adjustments for hard-scape (patios, decks, walks, etc...) when market evidence supports it. But soft items like bushes and grass? No way...I don't readily give value for things that can die in 6 months...for the comps or the subject.

 

[Mountain Man]

Appeal and market reaction might be an issue, but grass is not a requirement. As long as erosion is not a problem, the county won't bother you either. If they county does scream, mulch is a cheap way to fix that. Because of the 3 year drought we just came out of, I'm seeing more and more landscaping being replaced with more natural scape and less grass that requires a lot of water and maintenance.

 

[residentialguy]

I hate mowing. Give the comps with grass an inferior adjustment for making the homeowner do more work.:new_all_coholic:

 

[Hamlet]

I hate mowing. Give the comps with grass an inferior adjustment for making the homeowner do more work.:new_all_coholic:

If they had grass you could make it subject to getting a goat!

 

[Mike Garrett RAA]

Not an FHA require to have sod. Now it might affect the marketability of the property. Pretend you are a buyer and you have two choices, a house with a nice green yard or one with just dirt. Which one would you buy first? Ok, so you said..."of course, the one with a nice lawn!". If you couldn't have that one, would you buy the other one? If so, do you think you would pay the same price? If not, how much less? That would be your adjustment. I use one of the blank lines at the bottom of the grid for landscaping. IN MY MARKET, the adjustment would be from, say, $2,500 to $5,000 depending on the price range of the subject property. Rarely is it a problem in higher priced homes.