REO question

[TimberRidge]

Do you guys include the cost of removing the previous occupant's remaining possessions, landscaping and a general house cleaning in the repair items on REO assignments? When I was an apprentice, I was taught to ignore any remaining "stuff", landscape cleanup, cleaning, etc and only list actual physical repairs. Got a call from a new client asking me to add those types of things to the first assignment I did for them and am starting to wonder if I've been doing it wrong for my whole career.

 

[Mr Rex]

It doesn't go away on its own. We have 3 crews doing this everyday, and it ain't free.

 

[BOCK FOLKEN]

Do you guys include the cost of removing the previous occupant's remaining possessions, landscaping and a general house cleaning in the repair items on REO assignments? I was taught to ignore any remaining "stuff", landscape cleanup, cleaning, etc and only list actual physical repairs. Got a call from a new client asking me to add those types of things to the first assignment I did for them and am starting to wonder if I've been doing it wrong for my whole career.

I include pretty much everything that would be required to make it marketable, which includes cleaning, landscaping (mow the yard, trim bushes). In today's marketplace, making it marketable might entail a lot of stuff that we used to ignore during the high times. The client can ignore your suggestions if they choose, but at least they don't come back later wanting to know why it's not selling or asking for revaluations.

 

[AnonApprsr]

If it's a sale, read the P&S, it may already be the seller's responsibility. If this is pre-sale and you're appraising it for the "owner", and there is junk than yes you should not only take this into consideration as a current market value AS-IS, but also address it on the actual REO addendum as a repair/cTc.

 

[Dale Smalley]

Yes and also excessive yard debris.

 

[Workbox]

It depends on the client, some clients already have it factored into their costs and do not want it on your REO Addendum. All they need from you is the observable condition of the dwelling.

It's not that you have been doing it wrong, you just had a clieint or clients that did not require it. But now that you do...be of service to them and do a good job.

 

[Don Clark]

I now primarily do REO/Liquidation appraisals for the VA but have also done many REO assignments for FHA as well as Conventional. My clients have always wanted a cost to cure for everything. However, I have always been advised that a cost to cure for non repair/replacement items should not be factored into a return in market value. That is to say, leave out any debris, personal property removal when giving an opinion of market value when doing "as repaired". Landscaping is another issue. It may very well enhance the marketability of a property and give some return in a market value opinion. Obviously, an opinion of market value from any repairs, clean up, debris removal, landscaping will not be a dollar for dollar return anyway.

I too would suggest you communicate with the client how they want such things done as part of the scope of work.

 

[Workbox]

The only landscaping cost to cure I add is if saplings or young trees are growing close, or on the edge of the foundation and can cause future negative conditions.

 

[NC Appraising]

Fannie Mae REOs is pretty much what the OP said.

Most of my clients for REOs say the same thing. Most properties will be cleaned, secured, and the grass will be cut to avoid fines from the goberment.

 

[Mile High Trout]

"as is" and "as repaired" should both indicate the "marketplace standards".

Does the market generally expect junk removed and landscaping to be great, in order for the pricing relationships to be reasonable?

Apply the adjustments in relationship to your chosen comparables. The closer you can get to "most similar condition" comparables, the less you have to focus on those adjustment issues.