Sales Comparison Grid & Cost to Cure

[TekJ42]

We already told you that in this thread. Several times.

Indeed. Part of the reason I updated - to acknowledge the fact.

 

[Damienvball]

Revision #1 made this point just as you stated. Market participants would see the new tiles sitting on the roof waiting to be installed and either assume the repair would be completed or specifically stipulate its completion as a condition in a hypothetical purchase agreement. The lender didn't like this - they are basically demanding a cost based adjustment in the sales comparison grid.

There does not appear to be a measurable market reaction to an unfinished tile roof replacement - there is no data to support a market derived adjustment.

Have any of you used a cost based adjustment in the sales comparison grid?

The AMC says if we refuse they will have to re-order the appraisal and pay for it out of their own pocket.

There are many manuals you can buy that help you estimate construction/repair costs. You can also ask the roofers how long it will be to finish and estimated cost to finish. Its not rocket science. Get used to it because this is going to happen in your career at least once a week, bathroom being remodeled but infinished. etc.

 

[sputnam]

UPDATE

I received a reply from this QE instructor:

Paul Lorenzen
MAI, CPM, CSM, CCIM (Retired)
AQB Certified USPAP Instructor

He indicated that it is acceptable to use cost based adjustments in the sales grid as long as the adjustment includes entrepreneurial incentive (obtained via Market Participant Interview or Contingent Value Method). Apparently the addition of the entrepreneurial incentive component conveys 'market derived' status to the adjustment. He included a sample spreadsheet in his reply to provide an example, along with a thorough explanation. I think he assumed I was asking about a fix & flip assignment, but the as-is portion of his explanation seems to address the original issue (cost adjustments in sales grid).

Thanks again to everyone who replied -

Dude... there are forumites who responded to you that are CE, QE, and USPAP instructors with 30-40 years of appraisal experience.