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Plans.no specs

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Matt McCormick

Thread Starter
Freshman Member
Joined
Nov 9, 2004
Professional Status
Certified Residential Appraiser
State
Oklahoma
How can I handle this? Do I make an extraordinary assumption that the house will be built to a certain standard? The builder is an individual investor who is building it as a spec in midtown Tulsa.
 

Tim Schneider

Member
Joined
Feb 8, 2007
Professional Status
Certified Residential Appraiser
State
Wisconsin
For a builder who does several homes as spec homes, I think it is a reasonable assumption that this home will meet standards of prior homes. Now if it is your first time working with his homes, or he is new, I would call him or the client to get a list of specs so you can make an accurate comparision in terms of quality.
 

Ray Miller

Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
I would want the plans, specs, materials list, complete set of drawings, grade work if any and landscaping plans, before I would proceed. Even with that a lot of the time they change the plans, specs and materials while building. I scan as much of this data as possible into my report. Then make the report subject to what I have been given me.

If I see a change in the quality when doing draws, I will note that in the draw report as well. If the room lay out has been changed, or they are changing from a 2 x 6 studs to 2 x 4 I note it on the draw report. If the thickness of the dry wall changes I note that.:new_multi:

A few times I have seen quality cut in half fromt the original plans and specs.
 
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Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
plans.NOspecs - no subject, no assignment.
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
How can I handle this? Do I make an extraordinary assumption that the house will be built to a certain standard? The builder is an individual investor who is building it as a spec in midtown Tulsa.

Mr. McCormick,

A) Get in contact with your client. Educate them to the fact that an appraisal "Based" on plans and specs is an appraisal of a hypothetical property that does not exist. As such, it is literally impossible for you to value something when you have no idea what is being built regarding all the finish items and construction quality. Therefore, your client MUST provide specifications for the improvements, not just the plans.

Now then, I just kinda bet you've been asked for the 03/2005 forms .. right? If you have then a very long time ago you should have already figured out that you can't just shove in EA's and HC's in any willy nilly manner like we used to. Besides that, when one appraises to a Hypothetical Condition... which is what you would be doing, one is required to know and disclose the truth as per USPAP. Credibility is also a USPAP requirement. As you don't know the hypothetical to base your opinion upon, meaning you have no specs, that does not sound like a good idea to attempt to EA the specs now does it? Does that sound credible in this case? Not to mention any later completion certificate (442) would be kinda odd dealing with such an EA.

So here is my section "B" advice if they refuse, or cannot, provide you with specs (something that is rather stupid to not be able to do).................Turn down the assignment.

Webbed.

P.S. Try reading CB2 in the "Reconcilation" section of the new forms. Quite honestly, if I caught an appraiser using that checkbox, and then saying they did not have specifications for their work file to have "based" their opinions, comparable selection, cost approach, etc., on......... I believe they would shortly be facing a board complaint and could explain to the State board how they pulled that one off with no specs.
 
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Andy Taylor

Member
Joined
Sep 22, 2003
Professional Status
Certified General Appraiser
State
North Carolina
Wouldn't do one without the specs. Also I always meet the builder at the site and go over the plans and specs in detail so that there is no confusion.
 

Ray Miller

Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Short story. I showed up at a farm to do an appraisal. The lady of the house handed me a brochure with several homes in it. They had circle the home they were going to place on a new foundation. The cost was $175K, these were mods. I told her I would need the plans and specs and talk with the builder. She would not provide me with that data. So I call the lender, the lender would not provide me with that data. So I declined the order billed for a trip fee. Two days later I got a call from the lender that they were not going to pay my trip fee billing, because they got an appraiser to appraise the mod the day before and he had a value to them in 4 hours from the information on the brochure. So there are people who will appraise with out the plans and specs. But if I ever find out who this appraiser is, it off to the board we will go.
 

Lobo Fan

Elite Member
Joined
Nov 28, 2004
Professional Status
Certified Residential Appraiser
State
New Mexico
The last time I was faced with this situation, I assumed tract grade floor coverrings, appliances, etc, and wrote a long addendum about it. It was for a custom house in a pricey area. The value came in below what they wanted and by a miracle a set of specs magically apperaed on my fax machine. This was after numerous, calls, e-mails, faxes etc. to the LO and the builder.

The borrower called screaming like a scalded cat. Once I explained my reasonong, he understood and was able to produce a set of specs. It was a bit difficult to find comps that used the lower grade of materials. I had to make quality adjustments.

It can be done, just get ready for a battle.
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
The last time I was faced with this situation, I assumed tract grade floor coverrings, appliances, etc, and wrote a long addendum about it. It was for a custom house in a pricey area. The value came in below what they wanted and by a miracle a set of specs magically apperaed on my fax machine. This was after numerous, calls, e-mails, faxes etc. to the LO and the builder.

The borrower called screaming like a scalded cat. Once I explained my reasonong, he understood and was able to produce a set of specs. It was a bit difficult to find comps that used the lower grade of materials. I had to make quality adjustments.

It can be done, just get ready for a battle.

Lobo,

So did your client approve the use of your own made up specs before you did this? Because if not, you used a set of hypotheticals without the permission of your client for those hypothetical conditions that you used.... Sorry, that is a no starter under USPAP.

Webbed.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
A simple phone call can probably get you the Specs!
 
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