• Welcome to AppraisersForum.com, the premier online community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Permit finalling...any opinions(?)

Status
Not open for further replies.
robertwells

robertwells

Junior Member
Joined
Jul 13, 2006
Professional Status
Certified Residential Appraiser
State
California
Good morning, Guys and Gals, I am trying to get out of my head for a moment, and see if anyone would offer any thoughts they may have on this scenario...Working on a refi appraisal of a single family home that has had an extensive remodel to the tune of $300,000-$400,000 per owner, and included reconfiguring of floorplan and removing walls, as well as other upgrading/remodeling throughout...The owner reported it was all permitted, and due to the extent of remodel, including reconfigurations, I wanted to include a copy of the permit as an attachment to the appraisal...So, I went onto the county website, and did locate the permit and permit# for extensive remodel, but the status of the permit is "expired" (back in February), so I have no final. Per the chief appraiser (at AMC, I believe), if the work is all done (it is) I should just disclose all information I have on permit and status and be able to still determine a market value, unless it is a very strict market area(not sure what this means?)...Now I do know that the county may be behind in updating website status...I had a recent one where the finalling did not get into the system and Covid may also be affecting updating...

So, I am just curious if disclosing all and handling "as-is" seems an acceptable way to go here, or make appraisal subject to receiving final on the remodel permit, due to extent and nature of remodeling(?)

Thanks!

Bob
 
Subject to plans and specs
 
who? FHA? FNMA? or in house bank? Some allow you to assume some do not.
 
robertwells said:
Good morning, Guys and Gals, I am trying to get out of my head for a moment, and see if anyone would offer any thoughts they may have on this scenario...Working on a refi appraisal of a single family home that has had an extensive remodel to the tune of $300,000-$400,000 per owner, and included reconfiguring of floorplan and removing walls, as well as other upgrading/remodeling throughout...The owner reported it was all permitted, and due to the extent of remodel, including reconfigurations, I wanted to include a copy of the permit as an attachment to the appraisal...So, I went onto the county website, and did locate the permit and permit# for extensive remodel, but the status of the permit is "expired" (back in February), so I have no final. Per the chief appraiser (at AMC, I believe), if the work is all done (it is) I should just disclose all information I have on permit and status and be able to still determine a market value, unless it is a very strict market area(not sure what this means?)...Now I do know that the county may be behind in updating website status...I had a recent one where the finalling did not get into the system and Covid may also be affecting updating...

So, I am just curious if disclosing all and handling "as-is" seems an acceptable way to go here, or make appraisal subject to receiving final on the remodel permit, due to extent and nature of remodeling(?)

Thanks!

Bob
Click to expand...
Don't know your local customs; I would include the Permit# and it would require the building inspector final for a C. of O. (at least here). Due to COVID-19 there may be extensions allowed, you may want to inquire to the building inspector to get verification, for the client and your work file.
 
robertwells said:
Good morning, Guys and Gals, I am trying to get out of my head for a moment, and see if anyone would offer any thoughts they may have on this scenario...Working on a refi appraisal of a single family home that has had an extensive remodel to the tune of $300,000-$400,000 per owner, and included reconfiguring of floorplan and removing walls, as well as other upgrading/remodeling throughout...The owner reported it was all permitted, and due to the extent of remodel, including reconfigurations, I wanted to include a copy of the permit as an attachment to the appraisal...So, I went onto the county website, and did locate the permit and permit# for extensive remodel, but the status of the permit is "expired" (back in February), so I have no final. Per the chief appraiser (at AMC, I believe), if the work is all done (it is) I should just disclose all information I have on permit and status and be able to still determine a market value, unless it is a very strict market area(not sure what this means?)...Now I do know that the county may be behind in updating website status...I had a recent one where the finalling did not get into the system and Covid may also be affecting updating...

So, I am just curious if disclosing all and handling "as-is" seems an acceptable way to go here, or make appraisal subject to receiving final on the remodel permit, due to extent and nature of remodeling(?)

Thanks!

Bob
Click to expand...

To Agree or Not Agree with the chief,
1. And to your good point : I waited near' 6 months for my driver license renewal in the mail. After calling the DMV I didn't worry once I was informed. Can you call the permit office? Here they are very proactive on permits.
2. If you can find...if...if... IN your MLS market a sale or 3 etc. that "disclosed the fact" of the unpermitted addition TO find out whether or not "market cared" (market sensitive) : I would do that for your workfile & they do not have to be spot-on "subject comparable". Market accepted a current trend absorption price & terms OR not.
3. You can only disclose "what you know via documentations" and remain unbiased in that.
4. Biased thoughts would be " the contractor surely got a permitS on such a $$$ addition. So perhaps, call contractor OR put it on the Lender to send you such. OR the owner...or or whomever. Were you paid to be a detective? Yes & No. BUT it will end up in your "worry box" so make those calls & just document the means-you-attempted.
5. Once exhausted, document what Chief said with your "market sensitivity sales", your path to the conclusions, & photo report a Typical Final with "as is" since that is what you observed.

Around here, a property "can" close OR does close" without Final Recorded Permits. The Lender 'on New Construction" will need the CO but on a renovation or other...not necessarily.
Were there "specific client instructions" w/n their Service Order regarding same?? IF not, then you can assume GSE guidelines: Fannie - Freddie.
 
Last edited:
robertwells said:
Good morning, Guys and Gals, I am trying to get out of my head for a moment, and see if anyone would offer any thoughts they may have on this scenario...Working on a refi appraisal of a single family home that has had an extensive remodel to the tune of $300,000-$400,000 per owner, and included reconfiguring of floorplan and removing walls, as well as other upgrading/remodeling throughout...The owner reported it was all permitted, and due to the extent of remodel, including reconfigurations, I wanted to include a copy of the permit as an attachment to the appraisal...So, I went onto the county website, and did locate the permit and permit# for extensive remodel, but the status of the permit is "expired" (back in February), so I have no final. Per the chief appraiser (at AMC, I believe), if the work is all done (it is) I should just disclose all information I have on permit and status and be able to still determine a market value, unless it is a very strict market area(not sure what this means?)...Now I do know that the county may be behind in updating website status...I had a recent one where the finalling did not get into the system and Covid may also be affecting updating...

So, I am just curious if disclosing all and handling "as-is" seems an acceptable way to go here, or make appraisal subject to receiving final on the remodel permit, due to extent and nature of remodeling(?)

Thanks!

Bob
Click to expand...
Far as I know, fannie has no requirement a house remodel be made subject to permit and fannie/other agencies will lend on non permitted work as well, assuming it is accepted in the market - this has a permit filed but not finaled out . The original C of O was the C of O, the building permit is so county could approve plans and then return when finished and inspect it was done to code.

I would disclose permit status that it was filed, work appears of high quality but the final permit not closed out and let the UW decide - if you feel it would affect value to a buyer that is a value issue but then again a sale usually can not close with an open permit so the expectation would be to close it out on sale.
 
I agree with all (ish)! In my market it would be the infamous "that depends"; how in depth the remodel... are all the "trades" signed off (electric, plumbing etc.) I can tell you our market in Colorado (depending on the submarket) cares very little. Now that permits are online you can find many "expired" permits where they went through almost all the inspections and didn't get the "final". FYI in many jurisdictions they do NOT provide "C.O.'s" (certificate of occupancy) but L.O.C. (Letter of completion). This has been this way in my jurisdictions for years. As a remodel the right to "occupy" was never "voided" so they don't "certify" to it being "re-instated".

SO in cases were the market might care allot (say higher end homes), with a significant remodel SOW, I would likely require the "LOC" (but I would also probably talk to the building department to confirm status); On the other hand on a cabin in the mountains, where literally 30-50% have unpermitted or expired permit issues (they were only initially required in the county in the mid 70's and was not enforced in the more rural mountain markets till the 80's (and at that point at least 50% still did not pull permits for additions, and a few still don't). So if I "CLAIM" the market really cares up there, it might be a little misleading.

Fun Stuff
 
Subject to C. of O.

www.nolo.com

When Homeowners Must Obtain Permits for Home Projects

Even minor home improvement projects may require a permit -- a step you skip at your peril.
www.nolo.com www.nolo.com

 
Last edited:
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com
Back
Top