ROV Response: Shield Required

[TerryRohrer]

What expenses changed the appraisers judgement of condition? Why is reproduction cost being relied on in a market value appraisal? How was depreciation, or lack thereof, estimated for items where reproduction cost is significantly greater than replacement cost even tough utility of old and new might be identical?

 

[Surf Cat]

What expenses changed the appraisers judgement of condition?

This is what I was wondering. Because the op stated this;

Owner provided an itemized list of renovaion factors "confirmed by the visual observation of the appraiser,"

Me personally, I always input an itemized list of the borrowers upgrades, renovations, and/or remodeling especially if a list is given to me. That way, there's no mistaking what I'm considering in the evaluation of their property. If you just input "the borrower has significantly renovated the subject property" without itemizing the list, it's like calling their kids ugly.

It almost sounds like you kow-towed to the valuation of the upgrades as opposed to the market determining the renovation factors.....dismissing cost doesn't equal value. That's just guessing though, hopefully everything works out and nothing else comes of this and you can move on.

 

[sputnam]

An appraiser is supposed to consider the new info, not necessarily change it to help their "friends."

Reconisering can include lowering a value lol. Somehow, I bet that never happens.

Reconsidering doesn't mean that it changes. It just means that you take an honest look at it. It could increase, decrease, or it could stay the same.

 

[ZZGAMAZZ]

This is what I was wondering. Because the op stated this;

Me personally, I always input an itemized list of the borrowers upgrades, renovations, and/or remodeling especially if a list is given to me. That way, there's no mistaking what I'm considering in the evaluation of their property. If you just input "the borrower has significantly renovated the subject property" without itemizing the list, it's like calling their kids ugly.

It almost sounds like you kow-towed to the valuation of the upgrades as opposed to the market determining the renovation factors.....dismissing cost doesn't equal value. That's just guessing though, hopefully everything works out and nothing else comes of this and you can move on.

Architect owner borrower provided itemized list with expenses in response to my request, which i think totaled like $1.75m, supplemental list that accompanied the ROV were infrastructural, and approval based [which I will update here ASAP] of $250,000, consequently both legit, sig, and the basis of my objective eval which was affected by [I think] was the basis of a change in the orig Condition factor by [I think] about 40% of the additional $250K. Then I added the 3 ROV comps to colum.s 10,11,12 to ensure proof that the same orig adj factors were applied to the ROV comps, su n subsequently realizing that adj values of the ROV comps were almost identical to the adjusted values of the 2 orig comps with the lowest net/gross adj %ages-- which I had dismissed because they had been out of line of adjusted value range established by the other five orig sold comps, although I had catagorically reported net n gross adjustments in the SCA Reconciliation that is seperate from the Final Reconciliation [although usually identical]. Unsure whether I myself could replicate the ROV response protocol [but I just did] but the additional expenses n the additional comps revealed a revised OV just too straitforward to ignore. Also cant remember if I chose Repro rather than Replace bc of the age of 106 years that was basis of the architect's focus to restore orig design, or whether a Historic location required jusisdiction approval. [Just another urban cookie cutter... that required so much energy n time that I'm sick of it the moment it's done, rather than proud of the accomplishment-- kinda difficult to appreciate one's endeavors while clawing for survival.]

 

[ZZGAMAZZ]

This is what I was wondering. Because the op stated this;

Me personally, I always input an itemized list of the borrowers upgrades, renovations, and/or remodeling especially if a list is given to me. That way, there's no mistaking what I'm considering in the evaluation of their property. If you just input "the borrower has significantly renovated the subject property" without itemizing the list, it's like calling their kids ugly.

It almost sounds like you kow-towed to the valuation of the upgrades as opposed to the market determining the renovation factors.....dismissing cost doesn't equal value. That's just guessing though, hopefully everything works out and nothing else comes of this and you can move on.

"... like calling their kids ugly." I'm dying laughing. Funny AF
.

 

[ZZGAMAZZ]

Reconsidering doesn't mean that it changes. It just means that you take an honest look at it. It could increase, decrease, or it could stay the same.

Yes.of course..IMO the ROV.process almost always is a joke... but nobody laughs when my revised OV is lower bc of the ROV, even though I advise the AMC to notify the client before I proceed to review it...

 

[ZZGAMAZZ]

Yes.of course..IMO the ROV.process almost always is a joke... but nobody laughs when my revised OV is lower bc of the ROV, even though I advise the AMC to notify the client before I proceed to review it...

...to notify client that it is possible...

 

[ZZGAMAZZ]

What expenses changed the appraisers judgement of condition? Why is reproduction cost being relied on in a market value appraisal? How was depreciation, or lack thereof, estimated for items where reproduction cost is significantly greater than replacement cost even tough utility of old and new might be identical?

I recently discussed my response to a ROV that--in addition to 3 recommended comparable properties--also included the following list of renovation expenses that the borrower forgot to include in the original list he provided;



The magnitude of the additional expenses was significant enough IMO to warrant a change [increase] to the original OV, based upon changes to the Condition adjustment. Not just that, but the adusted values of the 3 ROV comps, when factored by adjustments identical to those applied in the original appraisal, revealed 3 adjusted values almost identical to the adjusted values of two of the original nine comps--the two comps with the lowest net/gross adjustments, which were not prioritized, like net/gross adjustments almost always are prioritized, because the other 7 original comps adjusted into a narrow range that IMO was more compelling than was market response to the two "best" comps--although the adjusted values of those two original comps when supplemented by the adjusted values of the three ROV comps revealed a narrow range of five adjusted values that depict a salient snapshot of market reaction, which warranted a change in the Original OV of I vaguely recall of more than $100,000. [Caveat: the 3 ROV comps oddly enough were located on the same street as some of the original comps, in this complex appraisal in which the newly-renovated 100+ year SFR is located in a an upscale, unique, atypical neighborhood--but on the extreme exterior border of the neighborhood directly adjacent to [and above] entrance to one of the largest outdoor public entertainment venues in this part of SoCali, requiring comps with similar externalties from miles away although the medium density area experienced lotsa activity, just very few sales similar to the subject's physical and locational features--just another boring "cookie cutter" assignment!!!! LOL

 

[Tom D]

This is a multi family because it says 1st & 2nd floor units? Nobody understands that form. How did you change the value without changing the other values, price per unit, price per bedroom, grm etc. If you have a friendly lender, it's not a problem changing something. Changing a value because you got new info is a good excuse. But the extra costs you got shouldn't have really affected the value. These are unseen things, you didn't take into account that every thing was done to c2 condition, regardless of the costs, originally when you inspected.
I don't understand why the additional costs made a difference on a c2 property. That's my review concern. It looks like a pressure bump up to me. You said in the original report that he gutted the property. So it's a c2, the cost to rehab is the same cost to rehab as for any other other comps. I do not understand why the new increase in value, c2 is c2 regardless how much it cost, or how much you overdid it. You didn't know that a c2 rehab includes the items that you say newly increased the value. I'm dinging you if i'm the state. But maybe loving you if i'm the lender.

 

[ZZGAMAZZ]

This is a multi family because it says 1st & 2nd floor units? Nobody understands that form. How did you change the value without changing the other values, price per unit, price per bedroom, grm etc. If you have a friendly lender, it's not a problem changing something. Changing a value because you got new info is a good excuse. But the extra costs you got shouldn't have really affected the value. These are unseen things, you didn't take into account that every thing was done to c2 condition, regardless of the costs, originally when you inspected.
I don't understand why the additional costs made a difference on a c2 property. That's my review concern. It looks like a pressure bump up to me. You said in the original report that he gutted the property. So it's a c2, the cost to rehab is the same cost to rehab as for any other other comps. I do not understand why the new increase in value, c2 is c2 regardless how much it cost, or how much you overdid it. You didn't know that a c2 rehab includes the items that you say newly increased the value. I'm dinging you if i'm the state. But maybe loving you if i'm the lender.