Question about appraisers responsibility to include comments on conditions they observe

[teakay77]

I had an appraisal done for our home and 20 acres when my husband and I were going through a divorce. My husband was a hoarder and brought home scrap metal he found on road side (old appliances, water heaters, HVAC unit that did not work, old garage doors, speakers, televisions). He also brought home stacks and stacks of pallets, which he put outside to deteriorate. He was unemployed the last year we were together and spent his time digging holes (some 9 ft deep, 3 different pits that were a total of 60 feet across) with a back hoe. We had mounds of dirt, sand and rocks randomly placed all over the property, trenches that drained to no where and held water until it seeped into the ground every time it rained and mowing parts of the yard and the area with all the junk became impossible because a mower could not get over the mounds or into the pits and trenches. It was a complete disaster. The interior of the house was unfinished because I was the only one working on it and had no time or energy left to put into it. Seven ceiling lights were dangling by their wires. All ceilings except LR needed paint. The DR still had parts of wall paper I was trying to remove. The master bath needed paint and cabinets doors were missing. Many rooms needed paint. The backsplash in kitchen was only partially grouted. There were DIY concrete countertops that had broken in 4 places in installation and the bar top was obviously unlevel.

It was a divorce. I wanted to stay in the house because my mother lived next door. My husband did not want me to live there, because he was mad that I filed for divorce. I was not going to clean up or repair anything unless I got the house and property in the divorce. My husband was unemployed while going through the divorce and had not cleaned up or repaired anything in the 8-10 months before the appraisal was done. So the property, if it had to go up for sale, was going to be in the same condition as it was when appraised. I had an estimate from an excavator service for $18,800 to fill in holes, level piles and fix drainage caused by my husband's digging.

I realize appraisers are trained to overlook clutter, but this was way past clutter. In this kind of situation, what is an appraiser required to do? I thought the value of a place was based on what it would sell for, not the value of what it could sell for if x, y, and z were done.

 

[ucbruin]

Hoarding is a different animal than clutter....

 

[Elliott]

TK,
Here is how I would approach your issue. As an appraiser virtually all of my comparables are going to be homes in average, marketable condition. I assume a prudent person would look at the house and say, "Wow, lots of clutter, deferred maintenance, and is would probably take $X to bring it to a 'fairish' marketable condition. Then I can come up with a reasonable 'marketable' condition and compare it to sales. If I have a beater sale property I will use it as a comparable to indicate how the market discounts a property with significant issues.

There are HGTV shows that re-hab properties in St. Louis and Detroit, where they buy homes for peanuts in neighborhoods which "do not have new community swimming pools" (what Fannie says I should say about neighborhoods). And after extensive remodeling they seem to sell for reasonable prices (thought they might take a $10K hit from their original estimates of cost and profit).

Have you also gotten an appraisal? In a dissolution, if there is a disagreement on the first appraisal, usually the other spouse gets an appraisal (or two).

 

[Tom4value]

You told is in detail the condition of the property but said nothing about how the appraiser dealt with it. Did the appraiser ignore everything and say “average” or did the appraiser explain in detail the condition and you just didn’t like the value? We know you want to buy him out so you want the value as low as possible.

 

[Tiffany Gibbons]

I had an appraisal done for our home and 20 acres when my husband and I were going through a divorce. My husband was a hoarder and brought home scrap metal he found on road side (old appliances, water heaters, HVAC unit that did not work, old garage doors, speakers, televisions). He also brought home stacks and stacks of pallets, which he put outside to deteriorate. He was unemployed the last year we were together and spent his time digging holes (some 9 ft deep, 3 different pits that were a total of 60 feet across) with a back hoe. We had mounds of dirt, sand and rocks randomly placed all over the property, trenches that drained to no where and held water until it seeped into the ground every time it rained and mowing parts of the yard and the area with all the junk became impossible because a mower could not get over the mounds or into the pits and trenches. It was a complete disaster. The interior of the house was unfinished because I was the only one working on it and had no time or energy left to put into it. Seven ceiling lights were dangling by their wires. All ceilings except LR needed paint. The DR still had parts of wall paper I was trying to remove. The master bath needed paint and cabinets doors were missing. Many rooms needed paint. The backsplash in kitchen was only partially grouted. There were DIY concrete countertops that had broken in 4 places in installation and the bar top was obviously unlevel.

It was a divorce. I wanted to stay in the house because my mother lived next door. My husband did not want me to live there, because he was mad that I filed for divorce. I was not going to clean up or repair anything unless I got the house and property in the divorce. My husband was unemployed while going through the divorce and had not cleaned up or repaired anything in the 8-10 months before the appraisal was done. So the property, if it had to go up for sale, was going to be in the same condition as it was when appraised. I had an estimate from an excavator service for $18,800 to fill in holes, level piles and fix drainage caused by my husband's digging.

I realize appraisers are trained to overlook clutter, but this was way past clutter. In this kind of situation, what is an appraiser required to do? I thought the value of a place was based on what it would sell for, not the value of what it could sell for if x, y, and z were done.

These are questions for your attorney who hired the appraiser, not an online forum. It could hurt your case. For dissolution of marriage, the value could be retrospective, depending on how the attorney engaged the appraiser. The value would not necessarily be an "Anticipated Sales Price" as you are describing. Why would your husband be the only party required to clean up or repair the property? I understand you didnt want to fix anything either, but if you both lived there, both of you would be responsible for cleanup and repair, in my opinion. Little things like light fixtures hanging down are miniscule in the grand scale of things. Most everything you described is cosmetic. I would think the appraiser would have made a condition adjustment or used similar condition homes for an "as is" value. I don't think you are going to be able to blame the appraiser if you did not come out on top. Your status says you are a member of a Government Agency rather than General Public, I am curious as to your true agenda.

 

[sputnam]

We are usually tasked to appraise the real property, not the personal property that has accumulated. The condition of the improvements is relevant. The accumulated 'stuff' can become relevant to the appraisal process if it impedes the appraiser's observations of the real property. Can't determine the condition of the flooring or walls if they aren't visible.

 

[Terrel L. Shields]

So am I reading that the appraiser did not appraise it "AS IS"? If not, send the report to the state board. I never cease to be amazed at appraisers who treat a non-lender assignment like it is a lender assignment and make the value "subject to"....

If this was done for the divorce, it needs to be different than if made for a bank. So unless the report is listing "mortgage lending" as the purpose of the report, it should be strictly " as is" and at a minimum adjust for the cost to cure (clean up the junk.)

 

[Tom D]

this is an interesting issue with extreme examples. if they were that bad the appraiser could have said the value is subject to certain things being corrected. most appraisers don't run into most of your home's issues, kinda over looks some of the heavier problems from lack of not seeing them before. i would go with 'subject to correcting' some of the issues with an 'as is' value. the overall condition of the house is reflected in the condition noted on the report.

 

[jay trotta]

So am I reading that the appraiser did not appraise it "AS IS"? If not, send the report to the state board. I never cease to be amazed at appraisers who treat a non-lender assignment like it is a lender assignment and make the value "subject to"....

If this was done for the divorce, it needs to be different than if made for a bank. So unless the report is listing "mortgage lending" as the purpose of the report, it should be strictly " as is" and at a minimum adjust for the cost to cure (clean up the junk.)

IMO-going to the State Board is not the answer, as we do not have all the details. and the OP has an attorney, I for the dissolution. of marriage.

OP- "So the property, if it had to go up for sale, was going to be in the same condition as it was when appraised. I had an estimate from an excavator service for $18,800 to fill in holes, level piles and fix drainage caused by my husband's digging".

Do not know if the appraiser was given the estimate for this or anything else, so, IMO-guessing at what was involved at the time.

 

[teakay77]

TK,
Here is how I would approach your issue. As an appraiser virtually all of my comparables are going to be homes in average, marketable condition. I assume a prudent person would look at the house and say, "Wow, lots of clutter, deferred maintenance, and is would probably take $X to bring it to a 'fairish' marketable condition. Then I can come up with a reasonable 'marketable' condition and compare it to sales. If I have a beater sale property I will use it as a comparable to indicate how the market discounts a property with significant issues.

There are HGTV shows that re-hab properties in St. Louis and Detroit, where they buy homes for peanuts in neighborhoods which "do not have new community swimming pools" (what Fannie says I should say about neighborhoods). And after extensive remodeling they seem to sell for reasonable prices (thought they might take a $10K hit from their original estimates of cost and profit).

Have you also gotten an appraisal? In a dissolution, if there is a disagreement on the first appraisal, usually the other spouse gets an appraisal (or two).

I got three appraisals. The first one I did not tell the man anything at all except that it was for a divorce. I expected him to see all the issues and adjust the price accordingly. It was done in May 2020, so before values rose to the level they are now. I did not show him the $18,800 estimate for clean up or point out any drainage issues or walk the property with him to make sure he saw all the "pits and piles." After that I read up on appraisals, talked to a realtor friend and hired another guy. I gave him the clean up estimate and made sure he saw all the issues. The third one I was tricked into having done by my attorney who was, apparently, working for my husband. I just did not know it at the time. I also made sure that appraisers saw all the issues. I even gave her a list (she told me it was ok to provide that to her) of 84 things that needed to be repaired/cleaned up, the $18,800 clean-up estimate and a photo of drainage problem after rain and google overhead showing location of every hole, rut, trench and pile on property.

We paid $340,000 in Jan 2017. 1st appraisal $509,000 in May 2020; 2nd appraisal $386,000 in Jun; 3rd appraisal $525,000 in Sep. The 1st and 3rd said absolutely nothing about condition and comps were all better properties, even if ours had been in the same condition. The 2nd appraisal said the value was because of the "as is" condition.

I paid half for the 3rd appraisal because my husband's attorney wanted it and my attorney told me to do it. After that no one would involved in divorce would even act like the 2nd appraisal existed. So I had to pay him much more. The junk is gone now, but I have not fixed the pits and piles yet. I'm doing it a little at a time with the tractor I got in divorce. They knew they overvalued. They gave me 75 days to refinance or I had to sell it, but I got to keep the money. He would not sign the quitclaim deed and tried to run out clock on 75 days. I got it done in the end though.

The reason for my question is that I have filed a complaint with the state bar assn against my attorney. (The appraisal was just one minor issue, there were many more). I am thinking of filing a complaint against the 3rd appraiser. She called the pits that did not hold water, were dangerous and had to be filled back in "preliminary pond diggings" on her appraisal like they were a good thing and then failed to mention any of the other 84 things on the list that she had seen for herself in her appraisal. My husband's attorney replied back to her in the email she sent with the values,"Thank you, Xxxname!" with an exclamation mark.