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Residential appraiser-MD

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Thuy Kernaghan

Thread Starter
Freshman Member
Joined
Aug 10, 2006
Professional Status
Appraiser Trainee
State
Virginia
I was asked to appraise a building, farm house/colonial in an agricultural zoned area in MD. The owner described to the lender which was noted on the order form that "it is having a little work done". It turns out after driving 1.5 hours that its completely gutted out on a 45 acres of land. Lender asks me to not note the fact that it is completely gutted and proceed with the appraisal. This is not a construction loan. Is there anything I can put on the appraisal that can make this USPAP compliant (protect me) and not jeopordize the LO's deal? please help...
 
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Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Thuy,

Honestly, what do you think is the correct and proper way to proceed?

Start here: http://commerce.appraisalfoundation.org/html/USPAP2008/USPAP_folder/uspap_foreword/Preamble.htm

USPAP 2008–2009

PREAMBLE
The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers. It is essential that appraisers develop and communicate their analyses, opinions, and conclusions to intended users of their services in a manner that is meaningful and not misleading.
 
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timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
Assuming that the property is residential in nature and not an agricultural property (i.e. working farm). The only was you can properly appraise this house for a typical non-construction loan is to appraise it subject to completion of the renovations (since it is gutted, I am assuming it is in the process of being renovated). If that kills the loan, that is just the way it is. You are not killing the loan, the condition of the property is...you are just reporting what the property is.
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
I was asked to appraise a building, farm house/colonial in an agricultural zoned area in MD. The owner described to the lender which was noted on the order form that "it is having a little work done". It turns out after driving 1.5 hours that its completely gutted out on a 45 acres of land. Lender asks me to not note the fact that it is completely gutted and proceed with the appraisal. This is not a construction loan. Is there anything I can put on the appraisal that can make this USPAP compliant (protect me) and not jeopordize the LO's deal? please help...


Maybe next time before you drive 1 1/2 hours to inspect an older property, you might want to be more specific in questioning the property owner about the condition of the property. Whenever someone tells me or the lender that a property "needs a little work" I have an in-depth discussion with the property owner as to what exactly he means in order to avoid wasting anyone's time.
 
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Vermonter

Senior Member
Joined
Mar 21, 2007
Professional Status
Certified Residential Appraiser
State
Vermont
Believe it or not, I get this quite often.
Could call plywood and blue tarps "average" in some places around here. <---This is sarcasm.


 

Chris Colston

Elite Member
Joined
Jul 24, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I was asked to appraise a building, farm house/colonial in an agricultural zoned area in MD. The owner described to the lender which was noted on the order form that "it is having a little work done". It turns out after driving 1.5 hours that its completely gutted out on a 45 acres of land. Lender asks me to not note the fact that it is completely gutted and proceed with the appraisal. This is not a construction loan. Is there anything I can put on the appraisal that can make this USPAP compliant (protect me) and not jeopardize the LO's deal? please help...

Yep there sure is! #1, how would your supervisor do it? #2, tell the truth about it! We are not here as advocates for the lender or the borrower. #3, are you permitted, as a trainee, to cross the state line? Is your supervisor certified in both Virginia and Maryland? #4, you may have to eat the gas expense on this one and refer it back to the client who will probably cancel the assignment.
 

David Wimpelberg

Moderator
Staff member
Moderator
Joined
Mar 30, 2005
Professional Status
Certified General Appraiser
State
New York
Is there anything I can put on the appraisal that can make this USPAP compliant (protect me) and not jeopordize the LO's deal? please help...

The goal is never to make the "deal" work. Appraisers are advocates for their appraisal, and nobody else.

[FONT=verdana said:
timd354[/FONT]][FONT=verdana,arial]The only was you can properly appraise this house for a typical non-construction loan is to appraise it subject to completion of the renovations


I would disagree. A starting point for any appraisal assignment is the description of the property "as is." There must be a compelling reason to appraise the property "as isn't," i.e, under a hypothetical condition.

The goal of any assignment should not be to make the property conform to some preconceived standard. Even certain lenders (including all of the lenders I do work for) will mortgage properties "as is," even when they aren't finished or are dilapidated.
[/FONT]
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
Thuy,

I failed to notice that you are a trainee in your earlier posts. This type of property is way beyond the competence of a trainee. Your mentor really needs to take an active role in completing this report.
 
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