Quoting a SFR, then showing up to a surprise new construction ADU

[SierraMV]

Three times in the previous four months, I have quoted a 1004 for SFR, then upon arrival for the inspection, there has been a new(er) ADU, which was not disclosed on acceptance of the assignment. I always check all public records and MLS before quoting. How do you handle this after the fact? Do you charge more for the increased complexity of two dwellings? Potential income, etc. I find myself just asking for more time and not increasing fees. How do you handle it when the scope of the assignment has changed after inspection? TIA

 

[Mike Ault]

Three times in the previous four months, I have quoted a 1004 for SFR, then upon arrival for the inspection, there has been a new(er) ADU, which was not disclosed on acceptance of the assignment. I always check all public records and MLS before quoting. How do you handle this after the fact? Do you charge more for the increased complexity of two dwellings? Potential income, etc. I find myself just asking for more time and not increasing fees. How do you handle it when the scope of the assignment has changed after inspection? TIA

Over the years I've learned that it's better to turn assignments back rather than resenting them all the way to completion. You made a good faith effort to provide them a competitive bid with the information you had at your disposal. If they don't understand why you need an additional fee for the additional complexity you discovered on site then they are not clients that you're going to have a successful long-term relationship with. Tell them how much you need to complete the job and if they balk then I would move on to the next one or just go fishing.

 

[J Grant]

Three times in the previous four months, I have quoted a 1004 for SFR, then upon arrival for the inspection, there has been a new(er) ADU, which was not disclosed on acceptance of the assignment. I always check all public records and MLS before quoting. How do you handle this after the fact? Do you charge more for the increased complexity of two dwellings? Potential income, etc. I find myself just asking for more time and not increasing fees. How do you handle it when the scope of the assignment has changed after inspection? TIA

In the future, marke sure your quotes are a good enough fee to cover any complexity that might arise including an ADU, an ROV etc.

An ADU is more work but it is not two dwellings. It is a main dwelling with a guest house ( ADU if it has a kitchen ) . I do not address potential income - not all ADU' are rented and even if they are, valuing it for income stream is typically beyond SOW for a SFR use property appraisal .

 

[Sadie]

Three times in the previous four months, I have quoted a 1004 for SFR, then upon arrival for the inspection, there has been a new(er) ADU, which was not disclosed on acceptance of the assignment. I always check all public records and MLS before quoting. How do you handle this after the fact? Do you charge more for the increased complexity of two dwellings? Potential income, etc. I find myself just asking for more time and not increasing fees. How do you handle it when the scope of the assignment has changed after inspection? TIA

I would notify the client and let them know the situation and the new fee. Let them know that you will not begin the report until you have approval of the fee. Don't want to have a report nearing completion and have your fee turned down. And have it in writing.

 

[SierraMV]

In the future, marke sure your quotes are a good enough fee to cover any complexity that might arise including an ADU, an ROV etc.

An ADU is more work but it is not two dwellings. It is a main dwelling with a guest house ( ADU if it has a kitchen ) . I do not address potential income - not all ADU' are rented and even if they are, valuing it for income stream is typically beyond SOW for a SFR use property appraisal .

The last one I completed had a 1065sf, 3bd/2bath ADU, and even if you don't complete the income approach, it still needs to be considered, especially because I live in a college town.

 

[J Grant]

The last one I completed had a 1065sf, 3bd/2bath ADU, and even if you don't complete the income approach, it still needs to be considered, especially because I live in a college town.

If it is that complex, call the client and ask for more $,

 

[Vermonter]

I would notify the client and let them know the situation and the new fee. Let them know that you will not begin the report until you have approval of the fee.

And your trip fee if they don't approve

 

[Surf Cat]

I always ask questions when setting up the appointment of what I'm walking into. I mean, how are you going to select your comps that you take with you if you don't?

After introductions and reason for the call, you get into it....

"Public records show that you have a three bedroom one and a half bath dwelling with 1,620 ft. Does that sound correct?

"Any updates to the home, an additional of a room or pool? When were they completed?" Do you have the certificate of occupation/ completion?

"Any updates and or remodeling to the kitchen, baths flooring? How about the heating and cooling system?"

You get the idea. Some people freely provide the information others, you have to pry it out of them. With the gathered information, you are able to choose the appropriate sales that line up with the subject's description.

And.... you would find out if they were constructing an ADU which would prompt a call to the client for an increased fee for the increase complexity of the assignment.

Now.... if you did this and the borrower lied to you....and purposely withheld information, I'd go to the car right then and there to call the client.... increased fee or I'm gone. No increase fee? You owe me a trip fee. I haven't done this in a long time as I no longer work for AMC's.... they walk all over you like a rug and think your time is not valuable.

 

[Sadie]

And your trip fee if they don't approve

Sometimes the client doesn't know about the ADU and they put it on hold while they decide what to do with it.

 

[Mike Ault]

Sometimes the client doesn't know about the ADU and they put it on hold while they decide what to do with it.

And half the time it's actually duplex, not an ADU. And the lender knows this, but they're just trying to sneak it through a different loan program with better rates.