Roof Replacement - Cost to cure

[Yimmydatulip]

I am appraising a single family home which has been vacant for some time and the home needs a new roof (this is according to the listing agent who told me the estimated cost for the new roof is $38,000..apparently he had a roof contractor look at the roof...I was not provided the actual figures in writing). The home also has mold in a few areas, however, no mold remediation was done on the home and it is being sold as is. I have looked for comparable sales of homes that contained mold and needed a new roof and I came up with nodda. I told the vendor I can not appraise the home 'as is' due to the fact that I have no idea how bad the mold is or what the repair estimates are and she informed me I can complete the home 'subject to', however, do I appraise this home 'subject to repairs' or 'subject to inspection'? Also, would it be more appropriate for me to appraise the home an overall low condition (c6) making a cost to cure adjustment for the roof and disclose the mold issue without actually making an adjustment for the mold? Any suggestions would be greatly appreciated

 

[Caligirl]

Sounds like this may be a good time to call for an inspection.

 

[Michigan CG]

$38,000 for a roof. Must be a really BIG house.

 

[Yimmydatulip]

$38,000 for a roof. Must be a really BIG house.

It's about 4000 sq/ft under air with a 500 sq/ft 2 car garage, tile roof (which is common for the area..Marco Island..). The Mold is pretty bad..its coming up through the wood flooring in one of the rooms.

So am I going about this the right way?

 

[Walter Kirk]

I would appraise the property subject to a new roof being installed and all mold being remediated. Mold remediation may include painting any wall surfaces that were covered by mold. Of course this appraisal will not reflect the improvements in as-is condition but if thats what the client wants you can do it that way.

The more proper way to appraise the property as-is would be to obtain repair estimates for the problems. You would then use properties with similar deficencies as comparables or to determine a percentage adjustment for condition. Remember that the most probable buyer for such properties are investors who repair and resell.

 

[Noreen]

From the look of the hardwood, I would factor in cost to cure to REPLACE that floor, there's no getting the mold out of that wood. I would make is subject to "subject to new roof, verbally told quote in hand of $XX,zzz ( love those tile roofs), mold remediation inspection, ( close up picture of the floor and what has happened to it) and any other mold covered surfaces. Marco Island is the high rent district and anyone buying there will expect that to be totally cured.

 

[Terry Caldwell]

As Walter said above, you can appraiser it subject to repairs being completed, or get repair estimates and determine the incentive a typical buyer would expect for taking on the repairs. Have you looked back five or six years? There may have been some damaged houses in 2005 after Hurr. Wilma. They don't have to be on Marco, although that would be ideal.

 

[Yimmydatulip]

Thanks everyone =) Glad I can always turn here for advice. Oh and Terry...I was thinking about doing something like that but once I was told to appraise it 'subject to' I just looked for the best comparables in the area..had I of appraised it 'as is', I completely agree with you about looking for Comps after Wilma, I'm sure there would have been comparables with damaged roofs and/or mold similar to the subject. Thanks again =)

 

[incognito]

C6 seems a little steep to me? Other than the roof, mold, and some moisture damage, is the house otherwise habitable, safe and sound? I may be inclined to go C5 if these are no other HUGE issues. Remember, C5 says "in need of SIGNIFICANT repairs".

 

[Mile High Trout]

Yes C5 to C6 is an important consideration. c6 may be a bit hefty.

I just had a 40k worth of repairs home that I still gave a c5 to. "Good bones".

Roof - $6-$12k abouts.
Gutters - $1-$2k abouts
Under roof woods - remediation? Itemize to find costs.
Mold - full mold service - includes replacement of woods? Cleaners, air scrubbers, testing, final testing - $4k abouts
Exterior soffets, framing, other material replacements? Itemize to find costs.

Whether you perform an as is or subject to, if the sow includes cost to cure, you itemize costs to cure based on real world estimated contractor. Home Depot Pro Desk is a great readily available resource for fixed price quotes.

Market reaction is likely a figure taken from your best judgement on the relationships of home value in various states of condition. Could go either way, depending on the market.

Anticipate a full spectrum of remediation, and note within the cost to cure or other report notes that cost savings may be possible. The appraiser developed cost to cure based on assumptions without access to any professional inspection records, inspections are prudent and called for x & x, yada yada yada. Itemize with real world costs. Imagine being the borrower and being in a position where the loan amount was inadequate to cover the costs of repair, and you find that out well into the project. It's critical for appraisers to have at least a good ballpark figure for real world costs on everything considered. Although you don't know the extent of the mold, there is still a range of service costs which you could point to rather confidently. Attic mold - oh lordy!