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Proposed Construction

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Alexx

Thread Starter
Sophomore Member
Joined
Jun 1, 2006
Professional Status
Certified Residential Appraiser
State
Florida
A lender has given me a proposed construction assignment for an upscale home in a prestigious neighborhood. The borrower is a prominent builder in the area. I have the plans for the house and an unsigned cost estimate from the borrower/builder. I believe per Fannie Mae that the appriaser must receive plans and signed specs.

I want to do the assignment, but I think that I need more information concerning the specs. At the same time I do not want to hassle the borrower for signed specs if they are not necessary.

Does anyone have any input on this matter? Are there clearly defined appraisal requirements for proposed construction?
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
You have to know what you're appraising. Get the specs.
 

Narkissos

Junior Member
Joined
Jan 9, 2006
Professional Status
Certified Residential Appraiser
State
Michigan
I always request a typed and signed copy of the specs. I do not believe the borrower / builder will have an issue. They are often more than willing to provide detailed specs.
 

ZZGAMAZZ

Senior Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
The issue will arise if the builder also is the borrower: Do the cost estimates include builder's profits? You'll also need to determine whether the builder's data is compatible with builders' costs in the community in order to ensure that your opinion of value isn't driven by artificially inflated cost estimates. You'll also need to conduct a thorough analysis of vacant land sales. I find this type of assignment to be very daunting because the data requires a lot more filtering than if the assignment was more routine. (That's just me talking based upon the way I was taught to do it...)
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
ZZGAMAZZ ... thats about as thoughtful of a post as I have ever seen you make. Congrats on a very well written post. :clapping:
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I get specs all the time that are not signed.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Signed specs with a bunch of under-priced allowances is a thing of beauty to behold for someone that knows their way around a change order.:new_smile-l:
 

ZZGAMAZZ

Senior Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
Prop: I am like Sisyphus trying to measure the steep learning curve of the appraisal industry with a cheap tape measure, with the first 9 inches missing where the tape broke so I have to subtract...add?...that much to every measurement.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
ZZ, based on your posts all over these forums, I'd say you are doing a great job.

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Alexx,

I agree with the others that you should have signed specs. While it's true that change orders can come later, it is what is in effect as of the effctive date that is important to the credibility of the appraisal. If they are not signed, they are not in effect. Just like the purchase contract.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Please cite your source for the above?
 
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