Slippery Slope: As-repaired And The Appraiser's Assumption

[Carnivore]

I agree.


In the case where we thought it was a relatively well-defined condition with a straightforward fix, and the borrowers did something more, then it wasn't completed as per the hypothetical and all bets are off. The property may need to be re-appraised.
Personally, I wouldn't worry about these types of situations and deal with them on a case-by-case basis.

I agree with you Denis, Technically it is a new assignment anyway you look at it. Factually the report would be in error due to it had a deck and now it does not. Is there a value issue? possibly and maybe not it depends. Lapse in time and affect on value depends. Its still a new report. Most likely because it was a deck the appraiser may already have that adjustment already determined and it could be a simple fix.

On the humorous side it seems strange to tear out a deck over a few board repairs.

 

[residentialguy]

I think you are asking about a situation where the appraiser has identified an issue and has made it subject-to a repair. But, the homeowner went further than repairing that specific item, or the type of repair they did affected the value (either positively or negatively). In this case, the HC was not completed as identified in the report. They did more (either by choice or necessity) than the appraiser assumed would be done.

Identifying the problem (e.g. safety hazard) and saying that they need to cure that problem is not telling them how to cure it, as it can be cured in dozens of ways (as I've shown above). We don't have the authority to tell them how to cure the problem, nor can we assume they are going to cure it by abc method.

Take the common peeling paint repair, for example. One way to cure it is to re-paint, which is typically how it's done. But what if the guy works with a siding company and they put new siding on the house? Now you have an appraisal reflecting a house with old repainted hardboard and the house has brand new siding on it. That's on you. You'll have to now re-do that appraisal...but they're closing today and they don't have the time to re-process a new appraisal. The deal falls thru and now the seller is suing you!

Whereas, had you simply said that that there is a hazard with the paint peeling and that issue needs to be cured. I'll put this on hold and once I get the plans on how that issue will be cured, I will then complete the appraisal reflecting the actual work completed and when it's finished, I'll do a final to make sure the house is done as planned. Now your report reflects the completed work and have eliminated any issues like this.

 

[residentialguy]

I haven't made a deck adjustment in 19 years.

Well at least you're consistent. I don't think you've contributed to a topic in 19 years, either.

 

[jay trotta]

RES;
I've struggled with making the report subject to repair without knowing how they are going to repair it, which can affect value. I had a sale where the deck had some unsafe boards that needed to be replaced. I made the deck subject to curing the safety hazard. I assumed a few bad decking boards would be replaced. I come back for a final and the safety hazard was cured all right, except instead of replacing 1/2 doz boards, he removed the entire deck! All my comps were adjusted for the decks. I was able to fudge my way out of it because it didn't really have a significant factor in value and the lender was cool with that and just notated the final. But what if that had more contributory value?

Not trying to be a nightmare, but now there is no Deck ? Did it create another Safety Hazard ?
Now I don't know your area or the data you have compiled over the years so my Q is; what type of adjustments were made for the comps ? Some have Decks, some did not ? Some were in need of similar repair ?
IMO, you made it subject to the "Safety Hazard" cure, if the Hazard was cured (either repair / replace or tear down) do your adjustments significantly impact the end result ?
Just thinking out loud a bit......

 

[residentialguy]

RES;
I've struggled with making the report subject to repair without knowing how they are going to repair it, which can affect value. I had a sale where the deck had some unsafe boards that needed to be replaced. I made the deck subject to curing the safety hazard. I assumed a few bad decking boards would be replaced. I come back for a final and the safety hazard was cured all right, except instead of replacing 1/2 doz boards, he removed the entire deck! All my comps were adjusted for the decks. I was able to fudge my way out of it because it didn't really have a significant factor in value and the lender was cool with that and just notated the final. But what if that had more contributory value?

Not trying to be a nightmare, but now there is no Deck ? Did it create another Safety Hazard ?
Now I don't know your area or the data you have compiled over the years so my Q is; what type of adjustments were made for the comps ? Some have Decks, some did not ? Some were in need of similar repair ?
IMO, you made it subject to the "Safety Hazard" cure, if the Hazard was cured (either repair / replace or tear down) do your adjustments significantly impact the end result ?
Just thinking out loud a bit......

No, luckily it didn't make a significant impact...however, my report showed a deck. It didn't created another safety problem because the door was sealed, therefore didn't pose any safety hazard of someone falling out or anything like that.

Still, my report did not reflect the subject. This was probably 10+ years ago, but if the buyer had gone underwater and start suing everyone, it may have been a problem for me. It was a learning lesson.

 

[djd09]

Well at least you're consistent.

That is right.

I don't think you've contributed to a topic in 19 years, either.

This is wrong.

 

[jay trotta]

No, luckily it didn't make a significant impact...however, my report showed a deck. It didn't created another safety problem because the door was sealed, therefore didn't pose any safety hazard of someone falling out or anything like that.

Still, my report did not reflect the subject. This was probably 10+ years ago, but if the buyer had gone underwater and start suing everyone, it may have been a problem for me. It was a learning lesson.

I would assume though we could go back to many jobs that, after Closing, from repairs, alterations or improvements, do not reflect the report, as of the "Effective Date". The item that has crossed my mind many a time, in particular all these requests for Interior Photo's, IMO are a waste of time, they only support items, As Of The Effective Date of the report.
Having also worked in the insurance part of the business for some years, any item claimed is always subject to the depreciated value as of the effective date of the Fire / Burglary etc.. Any individual items that require a specific value, require support in every fashion, per the Policy taken. To the best of my knowledge a mortgage does not include, Personal Property on a typical basis.

 

[J Grant]

If you make appraisal ( and value) subject to a simple repair, such as replace loose deck boards, and they instead replace the entire deck, not your concern if the value has increased due to new deck- unless client is asking you for a new appraisal ( which they are not). Your appraisal value was made subject to repair of the deck ( which they did), the fact that they exceeded the repair is beyond the SOW of effective date appraisal.

If we go out to inspect for 1004D and repair was not done, or done to inferior standards, then we have the right to call for additional repair or to tell client the repair was not completed.

 

[residentialguy]

Your appraisal value was made subject to repair of the deck

That's the thing JG....where do you get the authority to tell them to "repair the deck"? You can only tell them to cure the problem that exists. It's up to them as to how they want to fix their house and cure the problem.

 

[residentialguy]

The item that has crossed my mind many a time, in particular all these requests for Interior Photo's, IMO are a waste of time, they only support items, As Of The Effective Date of the report.

Not following. If you are doing subject-to, your report does not reflect the property how it was on the effective date, it reflects after repair. Just like new construction. I would like to see proof on how they accomplished that if I were loaning money out.