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Satisfactory Completion

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CharlieDyer

Freshman Member
Joined
Oct 9, 2002
I have an assignment for a new construction (about 60% finished). Sale under contract, I have a copy of the sales contract from the loan company. I reported that the site was about 60% finished, and loan company wants me to do appraisal subject to... no big deal, except, builder will not provide plans and spec for job! Says he does not have them! So I said give me the plands you submitted for your construction loan... he was to fax them and hasn't... so .... I can't complete assignment "subject to" pland and specs if I don't have them.... right... or can an appraisal be subject to completion to the local standards of contsruction and workmanship and a final inspection? What's your opinion.... Thanks Charlie Dyer
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
I would insist on the plans and specs being provided, period. Someone, somewhere, has them.
 

Steve Forstner

Junior Member
Joined
Aug 18, 2003
Professional Status
Certified Residential Appraiser
State
Michigan
This is not exactly the same as a "proposed" new construction. At 60%, I would expect you to have a closed shell. So, the assignment is to start with a closed shell (unfinished interior house) and appraise it as finished. If that's the case, you probably could get by without a set of blue prints, but you will still have to get a list of items to be completed. Otherwise you have no way of knowing if you have vinyl tile or hardwood, hot water heat or forced air, etc.

Don't let the builder fool you. He's got plans somewhere, otherwise, how does he know what to build? Those plan sets cost a bit, so they don't like to part with them and you might have better luck if you offer to return them when you're done. Spec sheets can be had for the cost of a couple of copies, and I'm sure he has at least a limited one of those too.

Steve
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
At 60% complete, measure the house as being built. But you gotta have the specs to know how it's going to be finished. Maybe the builder is too busy to mess with the appraiser, or it could be that the HO has not made up their mind. Either way, I just 'splain that it's holding up the money trail. The idea of not getting any more draws $$$ usually give them some motivation. ;)
 

Dave Smith

Senior Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Wisconsin
I would go back to my client and have them "lean on the builder" to provide the necessary plans and specs. Builders will usually respond if the lender is the one that insists on the details.

With no details, no appraisal, with no appraisal no loan, with no loan no closing, etc.

My $.02.
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
I would expect the builder to want payment for his house. Simply tell the builder that there will be no appraisal until you are provided with plans and specs. Remind him that no appraisal means no loan and no loan means no pay for the builder. Sometimes you have to smack them in the head with a 2x4 before they pay attention to you.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Either provide the plans and specs or offer to do it "As Is". :rofl:
Then you pick the specs for the estimated cost to finish, list them, and charge a much, much higher fee for having to do this.

Where did some builders ever get the idea that an appraiser doesn't need the plans and specs!
:twisted: :eyecrazy:
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
If the 'shell' is up and you can determine the floor-plan then go ahead and do a 'subject to' report. Call the builder and ask him about anything you can't determine on the day of inspection...i.e. heat/cool, floor finishes, counter finishes, etc. That's what I'd do....
 

Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Ditto the above comments. In cases similar to this, but much further along (i.e. only needs carpet and vinyl, landscaping etc...) I will modifay my standard comment re: new construction......


This is an appraisal of proposed new construction that is to be completed at a later date. The value estimated in this report is the current value of the completed improvements, as of the effective date of this appraisal. This appraisal is made subject to completion of the improvements as described in this report and the plans and specifications on file with the builder.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Excellent verbiage. If I may suggest a slight modification (bolded):

This is an appraisal of proposed new construction that is to be completed at a later date. The value estimated in this report is the current value of the completed improvements as a Hypothetical Condition (that which is contrary to what exists but is supposed for the purposes of this analysis), that they are fully completed as of the effective date of this appraisal. This appraisal is made subject to completion of the improvements as described in this report and the plans and specifications on file with the builder.
 
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