REO Appraisal help needed (AS IS) & (AS Repaired)

[Farm Gal]

What do you think of this web site as a tool for figuring repair/replacement costs.

Meta- ANY of the costing sites are nice for one or two-off cost repairs, but be scared-very scared when applying a laundry-list of repairs to a property.

Stacy this goes for you also:

Fist you have to decide what level of repairs are needed for marketability in the subject property's sub-market. Best to know precisely which niche it needs to fall into-1. perfection of repair or 2 Paint n carpet surface remodel or 3 Shoddy repairs which are acceptable to the subject sub-market!

Secondly- At some point of increased specific repairs you get into time/value conflicts. Best to understand how repairs work in REAL life.

When the number of little repairs add up, it becomes a 'professional' repair job on which the pros are heavy hitting multiple items with a concurrent economy of scale - they bring the big truck with ALL the tools and blast through the 'laundry-list' in short order with a decreased cost to the construction company (perhaps passed on to the wanna be owner or not?).

When the type of repairs are such that they cannot be performed concurrently (painting walls, refinish wood floors, and re-tile bath floors after you tear out the sub-floor and reset all the fixtures)... you start to get into a time thing that costs more money and time usually to both contractors and owner!

Best to get a feel for what your local contractors charge for costs under differing conditions!

Lastly, Stacy- Regardless of what actual costs are - like Ray says you gotta know pretty much how YOUR sub-market will react to the time/value equation. A LOT of discussion with buyers and agents had best take place before you go slinging numbers around like you know what you are doing.

How low does the lender gotta go to unload that turkey within the specified time frames?
WWTMS?
What Would The MARKET Say?

 

[Doug Wegener]

Costs

What do you think of this web site as a tool for figuring repair/replacement costs. http://www.contractors.com/h/info/resources.html

I stumbled across this one day and have played with the numbers for some of the kind of stuff we'd be interested in (replace flooring, paint, replace door, etc) and they seem pretty reasonable.

I punched in figures for interior painting for the fun of it. 1314 sqft of rooms with 10 windows and their estimate was $3512.

In my neck of the woods you could get it done for $2000.

Don' t know about their other costs, dont have time to do it with everything.

 

[Mike Boyd]

As is value is the value the the complete scope of work.

It appears you are having a hard time grasping the concept of an REO appraisal by your questions. I would suggest that you work with another appraiser who is understands and does grasp the SOW required in doing them.

There are several courses available on appraising REO properties. Before accepting an assignment, you are expected to have competency for the job.

 

[Deleted member 80407]

Stacy,
I think an appraiser who performs REO work must "FIRST" decide who the buyer is for the property (typical or investor). In my neck of the woods (Chicago), $4,000 in deferred maintenance is a drop in the bucket and therefore, the buyer could either be typical or an investor. Now when you inspect a property that needs $50,000 to $90,000 in deferred maintenance, who do you think the buyer is? Carpet, paint and minor drywall repair is cosmetic repairs which the typical buyer would consider. However when you inspect a property with major deferred maintenance such as structural problems, a water pipe burst causing damage to sub-flooring, walls & ceilings, no functional kitchens/baths or mold issues, the typical buyer would be an investor.

Properties with cosmetic repairs can be compared to properties without deferred maintenance. However, properties with major defeciencies and deferrred maintenance
require investor purchased properties which usually can be identified by cash transactions due to the property not conforming for a conventional loan (without an attached rehab loan).

"As is" value reflects the current condition of the property for current marketing times. Sometimes a property can have 2 buyers (typical or investor) while properties in need of heavy deferred maintenance would only have one buyer (investor).

"As repaired" value reflects all of the defeciencies and deferred maintenance to be corrected with typical marketing times with the buyer either being typical or an investor.

"As is quick sell" value reflects current condition of the property with a discount applied (forcasting) to motivate buyer (in most cases, investors) into purchasing a property within the time frame of the client.

"As repaired quick sell" value reflects all of the deficiencies and deferred maintenance to be cured with a discount applied to motivate the typical buyer or investior into purchasing a property within the time frame of the client.