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Open walls - Exposed Insulation

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Certified Residential Appraiser
State
California
I would just forge ahead, describe the drywall, maybe make a small adjustment (try to find a sale with some minor def. maint) and provide a C2C if the client wants. AMC's typically address C2C for this type of thing.
 

djd09

Elite Member
Joined
May 20, 2009
Professional Status
Licensed Appraiser
State
Ohio
"As a result, if any portion of the dwelling is rated a C6, the whole dwelling must be rated a C6."

Exposed wiring is a safety issue.
 

newyork12345

Thread Starter
Freshman Member
Joined
Nov 24, 2014
Professional Status
Certified Residential Appraiser
State
New York
Thank you all so much for your input. It was very helpful in making a decision on how to proceed. To give a bit more background (i simplified for the original post), I originally made the report subject to drywall repair but did not call it a safety issue. The lender came back and said the unfinished wall was likely a safety issue, and that if so, consequently, the condition rating needed to be changed in the report. I was hesitant to lower the condition rating to C6 as the house was livable otherwise and the report was made subject to repairs.
I agree with most of the commenters above that C6 is a tear-down and my subject was definitely not a teardown. Homeowners were renovating little by little with all major living areas completed. But then again, any safety issue would warrant a C6 rating. So i went back and forth trying to decide which approach made more sense, and figured i'd ask here. Thanks again to everyone for taking the time to answer!
 

glenn walker

Elite Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
California
Thank you all so much for your input. It was very helpful in making a decision on how to proceed. To give a bit more background (i simplified for the original post), I originally made the report subject to drywall repair but did not call it a safety issue. The lender came back and said the unfinished wall was likely a safety issue, and that if so, consequently, the condition rating needed to be changed in the report. I was hesitant to lower the condition rating to C6 as the house was livable otherwise and the report was made subject to repairs.
I agree with most of the commenters above that C6 is a tear-down and my subject was definitely not a teardown. Homeowners were renovating little by little with all major living areas completed. But then again, any safety issue would warrant a C6 rating. So i went back and forth trying to decide which approach made more sense, and figured i'd ask here. Thanks again to everyone for taking the time to answer!
That lender is looking for a reason to kill the loan , and the old game in lending is when the Underwriter doesn't like the borrowers loan package there is liability when a borrowers loan is declined with out good reason because people claim discrimination and all sorts of other pesky things. WHEN A LOAN is declined for appraisal issues, it transfers the liability off the lenders back and onto the appraisers . No UW or Reviewer is going to ask the appraiser to change a C-4 or C-5 down to a C-6 over an-issue that probably has a cost to cure of less then $2,000 bucks. Hell a home in average to good condition can have a 55 gallon hot water tank that is old or needs replaced and no PRV is considered a H & S issue so does the appraiser, take his/her C-4 home down to a C-5 or a C-6 NO. Also the UW or reviewer is not supposed to tell the appraiser what the condition or value is supposed to be.

My entire rant is a Reviewer or Underwriter does not change the appraisers condition rating especially on minor issues. And on Fannie-Freddie-FHA a minor H & S issue does not change the appraisers condition rating. Its a repair and once the owner has completed it and the Underwriter has received the 1004-D she removes the H & S issue from her list of PTD (Prior to doc conditions) If I had UW'S and reviewers telling me to change my condition ratings based on silly low cost to cure items I would tell them NO if you want the H & S issue mitigated we can do it two ways I can make my report "subject" to the drywall being installed or YOU the UW can make it a prior to doc loan consition and I will be happy to go back out and take a few photos of the completed walls and send me $150 bucks for the 1004-D : )
 

Tom4value

Senior Member
Joined
Dec 4, 2016
Professional Status
Certified Residential Appraiser
State
Massachusetts
Where did you find a directive indicating this cannot be done "as is"?
Mortgage lending experience. If there is a functional issue, loan is not salable.
 

Tom4value

Senior Member
Joined
Dec 4, 2016
Professional Status
Certified Residential Appraiser
State
Massachusetts
Thank you all so much for your input. It was very helpful in making a decision on how to proceed. To give a bit more background (i simplified for the original post), I originally made the report subject to drywall repair but did not call it a safety issue. The lender came back and said the unfinished wall was likely a safety issue, and that if so, consequently, the condition rating needed to be changed in the report. I was hesitant to lower the condition rating to C6 as the house was livable otherwise and the report was made subject to repairs.
I agree with most of the commenters above that C6 is a tear-down and my subject was definitely not a teardown. Homeowners were renovating little by little with all major living areas completed. But then again, any safety issue would warrant a C6 rating. So i went back and forth trying to decide which approach made more sense, and figured i'd ask here. Thanks again to everyone for taking the time to answer!
A little confused.
Did they want you to make the appraisal “subject to” them putting up drywall to clear up the issue? If so, then your rating should be C4 (or higher) as your condition is based upon the “subject to” condition, not the “as-is” condition.
 

Econobot

Junior Member
Joined
Aug 9, 2019
Professional Status
Certified Residential Appraiser
State
Colorado
You observed work in process, delve into cost to cure which should be a simple math calculation from a local drywall contractor. Call one up and tell them what you have, ask for bid, report bid as range in the cost to cure. Make report subject to repairs. Done. Now develop the report as if the work in process were complete. C3 should be your condition. If they want an as is value deduct a depreciated amount from the cost to cure estimate to estimate the condition differences in terms of estimated contributory value. Don't over think it, work in process is typical so is remodel and update work. There are times when people run out of money doing remodel work, not a big deal. This is no different than a dirty or cluttered property, a competent appraiser needs to look past the personal possessions to see the brick and mortar of what's there.
 

sputnam

Senior Member
Joined
Apr 24, 2012
Professional Status
Certified General Appraiser
State
North Carolina
I inspected a home that was in the process of renovation. The majority of the home was done, but the downstairs hallway and part of the upstairs lacked sheetrock. The walls were open with paperbacked insulation between the studs. The homeowners live in the house full-time, and the kitchen, baths, living areas and bedrooms are all finished. I know the open walls are considered a safety issue, but as the rest of the house is in good condition does it still warrant a C6 condition rating? Or does the condition of the finished areas count for something and can i give it a C5 rating? I'm having a hard time deciding. Thanks for any insight you can provide.
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In part it is up to the lender. I'd contact them, explain the situation and ask if they want it subject to completion or, as-is. I agree that it doesn't sound like a C-6.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Or let a toddler run along and rip the electrical wires out of the walls. Outlet to outlet its a perfect height for a kid to grip and rip. Not that they would ever do something so dangerous. Prolly OK as long as they have the new receptacles with the child resistant receptacles that have the retractable covers over the slots in the receptacle so they don't have to use the old "pacifier" style protection. A kid would never jerk on a eye level wire for fun and giggles...
 
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