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REO question

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chris gallo

Thread Starter
Sophomore Member
Joined
Mar 15, 2006
Professional Status
Certified Residential Appraiser
State
Maryland
I have done many REO properties in varing degrees of condition including some having a mold like substance issue which I suggested a mold inspection as the appraiser is not a qualified , certified mold inspector.

Now, I have an assignment where the dwelling is flooded in the lower lever and there is actually condensation on the ceilings (main level) throughout the dwelling. 1 level rancher with a full basement.
There is also a mold like substance growing on every surface of the dwelling. ceilings, walls, window sills, the appliances, cabinets , Floors. everywhere you look has black, blue green sploches of what I believe to be mold. And it is growing fur in some areas as well.

Being that I am not an expert in this area (mold), when do you decide that cleaning and sanitizing all surfaces is not sufficient and that all of these effected areas should be removed for safety reasons. In this case we are talking about gutting the entire interior.

I believe the home is not safe to inhabit at all and can cost to cure it that would entale gutting the dwelling.

This is the first time I have seen a property with this extent of the mold like substance. It took 7 trips inside as breathing was almost unbearable and I am still coughing.

any suggestions are of course are welcomed,

thanks
chris
 
Last edited:

Doug Wegener

Senior Member
Joined
Apr 14, 2005
Professional Status
Certified Residential Appraiser
State
Oregon
I think I would tell the lender they need to get a contractor estimate/bid on nature, extent, and cost of repairs from a qualified professional before I could proceed. Possibly two since these estimates can vary greatly.

How could you possibly determine what the property is worth if you dont know the cost of the repairs?

Sometimes mold problems cannot be corrected and structures have to be razed.
 

chris gallo

Thread Starter
Sophomore Member
Joined
Mar 15, 2006
Professional Status
Certified Residential Appraiser
State
Maryland
My first impression is that it may need to be razed actually. I like your suggestion. the damages are on both levels of course and the cost would be very steep.
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
First, don't go back in there without the proper breathing filters. Mold can cause you some very interesting problems with your health.

I'd contact the client and inform them of the condition, provide photos if you took any, and ask them to remediate the problem prior to you completing the appraisal.
 

chris gallo

Thread Starter
Sophomore Member
Joined
Mar 15, 2006
Professional Status
Certified Residential Appraiser
State
Maryland
First, don't go back in there without the proper breathing filters. Mold can cause you some very interesting problems with your health.

I'd contact the client and inform them of the condition, provide photos if you took any, and ask them to remediate the problem prior to you completing the appraisal.


If the report is to be as is (REO), would they actually remediate the problem prior to completing a report? What if they say to complete it as is. Am I required to do so? Again, first time situation for me.
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
The presence of the mold makes the property unmarketable! Some molds now in existence are very, very nasty. Who in their right mind would bother to walk through a house with this much mold and offer to purchase it at any price.

In my opinon, the as-is value is zero or lot value less cost to demolish the structure. Mold eradication can be very costly and time consuming. If you need it there must be a contractor somewhere in your area that does mold removal, have them shoot you a price then discount the value beyond that for condition after eradication.
 

chris gallo

Thread Starter
Sophomore Member
Joined
Mar 15, 2006
Professional Status
Certified Residential Appraiser
State
Maryland
stefan,

I agree it is not marketable and the value may only be the land minus demolition cost.
If I am not allowed to say it is mold (even though it is) because we are not the mold experts am I over stepping my qualifications?

Believe me I still feel ill from the inspection and do believe the home should be bulldozed.
 

hglenbetts

Senior Member
Joined
Dec 3, 2007
Professional Status
Certified Residential Appraiser
State
Michigan
Chris, Chris, Chris......

It really sounds like you've placed yourself in a very harmful situation. Even "common" molds in high concentration can be extremely harmful to the repository system. Keep aware of your health; breathing, sight, dizziness etc.

With that said, I photo the condition and send them to the bank/management company with the recommendation for complete inspection by an expert prior to re-entering, and charge them a trip fee.

Good Luck, and watch that health.
 

chris gallo

Thread Starter
Sophomore Member
Joined
Mar 15, 2006
Professional Status
Certified Residential Appraiser
State
Maryland
Great, health issues is the last thing I need right now. I should have shut the door and walked away. Been coughing since I left there, hopefully it stops soon.
 

Riick

Elite Member
Joined
Aug 14, 2007
Professional Status
Certified Residential Appraiser
State
Delaware
Have been doing REOs for easily 15+ years.

FIRST... If it's insect infested, dangerous to walk in, has extensive mold, etc., etc:
I STOP at the doorway.
I take photos.
I walk-away.

My health and safety are not worth risking for a few hundred dollars.

..... After I walk away I notify Lender of unacceptable condiiton and send them an illustrative photo or three.
100% of the time I've collected a trip fee.
99% of the time, when it's cleaned up, I get the order to do the appraisal.

You've made an inspection, and I sure hope your health is not impacted as a result.
As far as the appraisal, I'd say you have to call it as you see it,
in the very same way you would if it lacked a kitchen, had no finish flooring,
or had all the copper tubing ripped-out.
Big dollars, but that's why they pay the big bucks for REOs.
 
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