Plans? We don't need no stinkin plans

[Jim Bartley]

Ok guys/gals, I need your opinion. I have a lender that sends me requests for appraisals of new construction. When I call them to get a copy of the plans/specs, they say "it's conventional, we don't need the plans, if it was FHA, then we would need the plans". I say, "how do you expect me to appraise something that is not built". Their response is contact the agent, from whom I get varying degrees of help.

Question #1: How would you handle the situation.

Question #2.: Let's say the house is nearly complete, except for flooring and kitchen appliances. I go out and measure the house, call the builder to find out the rest and finish the report "subject to". Now what if the builder built something with less square feet than the actual plans? Say he took 2 feet off the width, for example. Since I'm checking the box "subject to completion per plans & specs", wouldn't I be in the wrong since the house really isn't built per the plans?

 

[AC King]

How can you appraise a property subject to completion per plans and specs if you do not have plans and specs? You may wish to make the opinion of value subject to satisfactory completion of the items that would typically be in the properties used for comparison. You will of course need to list those missing items under the comments section on the first page of the URAR.

 

[Pamela Crowley (Florida)]

JimBob,

Try showing them the Reconciliation portion of the URAR where you check off that the appraisal is made "subject to completion per plans & specifications." I've never had anyone try that one! Makes absolutely NO sense at all! I did just do one with 'modified' plans from an older version of the same model with all sorts of additional modifications that I got from the specifications that spelled them out. I also stated that in the report.

2) Under this circumstance, you need to re-measure the actual structure and state that the new house is not the house that was appraised and that a new appraisal is now necessary. Make sure you send a copy of this tidbit of kinda important information to EVERYONE involved!

Just how much of this is the idea, in collusion?, of the LO, builder and real estate agent???? How many other houses out there are not what they were supposed to be? OK... I do have a suspicious mind but, this is setting off red flags with sparklers on em. Be VERY, VERY careful!!!

 

[Mountain Man]

JimBob,

If the house is not built to at least a point where I can tell what it is going to be, I require plans & specs. Sometimes the plans are hand drawn or "builder art" with sloppy hand writing on the specs, but that gives me something to go by. I have even received a page that was torn out of a house plans magazine with the "floor plan" (no measurements) and a little artist drawing. :roll: If they are not true plans & specs, I will disclaim it though out the report and make it subject to me verifying the measurements, and inspecting the subject thought out the construction process. Of course I don't go out unless they pay me an inspection fee, but most never call for an inspection or verification. I am mostly concerned about when they call for a final, and I have to say: Sorry, that is not what I appraised. :roll: CYA! Get something for your files. Talk to the builder first, home buyer second, and the agent, well.... :lol:

If it is built to a point where I can measure it and get the GLA, I will get the specs from the builder, or fill out the form as I am walking through and talking with him.

I have seen wayyyyy too many instances where they decided to change the plans, or not build the garage, or not finish the basement, or, or, or.

Mell.

 

[Jim Bartley]

Just for your info, this is for a VERY large national lender. When I called today to get the plans the young lady said, "Jim, you're the only appraiser that asks for the plans". By the way, I think some of you may be missing my main point: If I measure what's there, how do I know for sure that that is what is supposed to be there if I don't see the plans and check "subject to"? I may measure one thing, but the plans could be different as far square footage etc...Of course I could always argue that I appriased what was there, but if it was different from the actual plans, it seems I could be held liable since I checked "subject to...plans/specs".

 

[Carnivore]

Jim Bob,

The girl from the bank lied to you.

Also, For a builder to get a permit he/she will be required to provide plans and specs to the county building permits office.

One last thing. USPAP requires YOU to gather sufficient information to conduct and appraisal and prepare a report that is not misleading, blah blah and yada yada.

To address you point on whats actually there. You appraise whats actually there, because then its not hypothetical.

You could charge more also.

Good luck on this one. Cant wait to hear from you on outcome of the Certificate of cmpletion.

 

[Dee Dee]

Jim Bob,
Probably the reason that the girl at the bank said that you were the only appraiser to ask her for plans and specs is because the bank isn't the one that has them. The builder will probably have a set on site or should have no reservations about making certain you have access to a copy. This is fairly standard procedure. As someone already mentioned, permits couldn't have been pulled without plans. The realtor rarely knows anything.
I wouldn't even consider doing an appraisal without something tangible from the builder, and even then I would double check measurements if enough of the house is already there to do so.

 

[Dan/Fla]

I am confused / Unless the the home is over 1/2 up so you can somewhat measure, how could even come close to quessing what the square footage will be? I know we take the little floor plan, and use it and pray there was not going to be any changes or enclosing any porches. I had one lender tell me the same thing one time and when i finally got the plans, found changes where made, The buyers had one wall extended 2 foot the entire 50+ foot run, and added a bonus room above the garage which was not in the original floor plan handout. After I got the plans called the loan officer and asked him which square footage would you like me to use?

Without actual spec's Nope need them too.

Appraisers that pat the loan officer on back and do not get the plans/ are asking to be sued, or worse; is the loan officer going to support the appraiser and familty, when they lose their appraisers License?

My 2 Cents

Dan

 

[Lee in L.A.]

Unless it's over 90% done, they have to provide plans, materials specs, and cost breakdown. And make it complete for the second 2, but not the electrical and plumbing roofing plans etc. Just floor plans, site plan, elevations.

Otherwise they don't get no stinking appraisal. And I'm not going anywhere or doing anything until I have it all. Wasted too much time like that before. Go out at their urging, Oh I'll bring everything, never do get all the plans, and cancel the deal eventually.

I usually scan the things in and add to the report, including elevations and floor plans from the architect. Maybe photgraph them if they are too large. Put in as much detail as I can to CYA, so if they come back later and they built something different, well hey that's not to spec and not what I appraised. Plans change all the time.

 

[Dee Dee]

Dan,
If the home has not been started (usually the case in a proposed construction loan), then the appraisal must be made entirely based on plans and specs.
Local lenders will often have the appraiser do periodic checks on the construction as it progresses to ensure that the house is being constructed according to those plans and specs.
In the case of an out of the area lender, a final inspection after the home is finished is always called for, since the first appraisal was done 'subject to' completion per plans and specs, and at that time the appraiser must determine if the home meets the initial value estimate. Any major deviation that has been made from that initial appraisal, particularly if it would cause a decrease in the initial value estimate, should be reported immediately to the lender.
Fortunately I haven't ever run into any such cases, as the county inspectors are also watching the contruction process, supposedly looking at the same plans and specs that I was given and issuing permits accordingly. Usually the only changes that I have seen are on the finish work, such as cabinetry and floor coverings. It is the builders and borrower's responsibility to let the lender know of any changes which deviate from the original plans and specs, not the appraiser.