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question for housing guys

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farmguy

Thread Starter
Member
Joined
Jun 27, 2007
Professional Status
Banking/Mortgage Industry
State
Texas
I am looking at a ranch with a metal house. No problem with that as it has gotten more common last few years. Problem is quality construction. The exterior commercial grade metal sheets touch the concrete. In other words the ends are resting on the slab. I have been around farm buildings long enough to know that is not good. Sets up are reaction and rusts out bottom of sheet. I called several national metal suppliers and they agree and say it voids any warranty on their product. A home inspector looked at it and said it was fine, another home inspector said it was fine. It seems most market participants think it is fine. I have experience that tells me it will rust out in 15 years. My job as an appraiser is to tell client what "market value" is. I should only adjust things that the "market" would recognize as an adjustment factor. There are lots of things "I" don't like that the market does and I have to recognize market not me. I can come up with a cost to cure, but the market would not recognize this as a problem. How would you guys handle that.
 

The Matrix

Senior Member
Joined
Apr 28, 2003
Professional Status
Certified General Appraiser
State
Colorado
Full disclosure is the key....state that the exterior metal walls touch the concrete...and advise the buyer to consult with a construction professional if they have any concerns regarding the the metal to concrete contact. Appraisers are not construction experts...and we should not hold ourselves out as authorities regarding building codes and compliance.
 
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stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
I think at a minimum you should disclose what you know? It's up to the lender to decide what they will accept. If you don't disclose then you are not providing a true independent opinion of value.
 

farmguy

Thread Starter
Member
Joined
Jun 27, 2007
Professional Status
Banking/Mortgage Industry
State
Texas
Yes I will cover myself with regard to disclosing. But would you adjust. I can come up with a cost of cure. Hired hand with a skill saw and a truck load of abrasive blades and you cut the bottom inch off the panels. Then you could work a drip ledge up behind panel to the slab. All that said I don't know what the number would be, but if the "market" would not typically discount a property for it would you adjust for it. I am leaning to not adjusting and just stating some bs along the lines of "metal in contact with concrete may void warranty on siding and may lead to a corrosion issue. A building inspector with expertise in metal buildings should be contacted for available remedies. The market does not seem to discount for this characteristic therefore no adjustment is made." I was thinking as I was typing so, some thing along those lines anyway.

What do yall think?
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
You sound kind of like me, you know a way to fix it, but is this what your typical client wants?

Now a days they require an engineer out and a licensed contractor and a permit and an inspection and whatever else.

Just note in your apprasal what is wrong and then let the client make the next step.


An Old Farm Guy
 

Ray Miller

Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
I would note it in the report. I would picture it in the report. I would check box four in the report if done on a 1004.

Let them have it inspected and put the monkey on the inspectors back, as well as the lender.
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
I would note it in the report. I would picture it in the report. I would check box four in the report if done on a 1004.

Let them have it inspected and put the monkey on the inspectors back, as well as the lender.


I think Ray gives the best advice here. Pass on the liability. We dont in fact KNOW what will happen 15 years from now ... let the inspector say it is ok as a result of your diligence in requiring the inspection.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
I agree, box 4. The client may decide the home inspections he already has are good enough to 'clear' the EA, or he may decide to get another inspection.

Either way your value is the same. Either the other expert clears the condition, or repairs it. Not you.
 

farmguy

Thread Starter
Member
Joined
Jun 27, 2007
Professional Status
Banking/Mortgage Industry
State
Texas
I don't have a box to check and I work for the lender. We are a by comparison a very conservative outfit. Myself and now the loan officer feel some duty toward the applicant for the loan. Since technically my duty is to the client which is the loan officer or my employer, I have asked him and he has notified the applicant of my concern and I will describe the issue in my report.
My main question is not covering my rear or anything, I am curious how yall would determine whether or not to adjust. We are in the country so no city inspectors or anything. The building inspectors don't have a form or anything telling them it is against code so they won't recognize it as an issue. I don't do typical residential and I don't deal with inspectors much. So far I am not impressed. I did make a somewhat subjective adjustment based more or less on what "good" houses contribute compared to say an average or slightly less than "average" house. That in itself was a tough call for me, because this is a "horsey place" in an area where everybody is nutty for horses. The inside looks like the Ponderosa. Cosmetically you can hide a lot of sorry construction and John Q Public doesn't know any better and the inspectors just look at me with a blank stare and say they can't find a code that says you can't have the end of the metal touching conrete.
I appreciate yalls responses, this will always be frustrating to me. My first boss always told me, you should not impose more sophistication on the market than is there. If the market is not savy enough to recognize a problem I because of the definition of market value should not discount for it if the "market" does not tell me to.
I was a fee appraiser for several years prior to certification and it seemed like common sense was allowed to dictate more decisions. After certification and I guess the explosion of all the creative lending that has led to the mess we are in now, it has all been boiled down to checking boxes on forms. As this correction unfolds and buyers feel like they have a little more leverage in deal making, and young bankers, that did not work through the 80's, figure out that quality counts in a down market maybe a little more common sense will float to the top.
 

Pat Butler

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I see building defects all the time that a typical buyer wouldn't notice. You have to be careful to not emphasize things that a buyer would miss.
 
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