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

[Meandering]

Res,

You're having a snowflake melt down for no reason. Start again.



The appraisal is made under the HC that the 6 deck boards which are broken are replaced and painted or sealed.

End of story.

If the homeowner rips out the deck and builds a 200 sf enclosed porch, that has

NOTHING TO DO WITH THE PROPERTY AS OF THE EFFECTIVE DATE OF VALUE.

It also has nothing to do with your report, because your report was as of a specific date, subject to the HC.

The owner did not comply with the HC, you can request a new assignment for the changed property or the underwriter can accept your report and note that they are lending based on the report, not on any changes made subsequent to the report.

You are done,
as of the effective date of value.

.

 

[residentialguy]

The appraisal is made under the HC that the 6 deck boards which are broken are replaced and painted or sealed.

If that is truly the case, then I can condition to remove the deck. You seem to think that we are the home contractor with carte blanche to spend their money the way we want them to. The repair that we call that you highlighted is for the repair of the hazard issue. That is the repair. No where does FNMA say that we the building contractor to instruct the HO exactly how to handle their property. End of story.

 

[Carnivore]

Your dancing all around the update/recertification/new assignment issue. You have an easy out on this situation in that this may be within a reasonable contemporaneous time period from the effective date of the appraisal to the update or recertification. Depends on whether you or the client may think in this case a deck is a significant attribute that effects market value. So lets say that the removal of deck does not have any impact on the market value. The question then comes to bear what are your duties/responsibilities to the client given the Intended use and purpose of the appraisal assignment SOW governed by the over riding current version of USPAP.

The point of whether the deck has/had no impact on market value is irrelevant. The only relevance the original effective date has in this situation is the contemporaneous of the time period from then(original effective date) to the date you went back out to the subject for the completion of repairs/safety items etc.

So in your professional opinion you concluded the deck or lack there of has no impact on the market value. The removal of the deck fixed the safety issue; broken, missing deck boards. With the deck removed now your exhibits, i.e. sketch, photos, page1 & 2 URAR etc. misrepresent the actual physical characteristics of the subject to the client and/or any reader.

So an appraiser with a appraisal report review assignment, the Client and/or state licensing board or all three would probably take a dim view of your Appraisal assignment conclusion and completion.

If I am wrong, ya'll can slap me with appropriate USPAP citations.

 

[J Grant]

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.

Via your lender client, you have the "authority" as an appraiser to call for the repair to be done in a workmanlike manner (or done by a licensed professional if it is electric or plumbing ) Its just common sense . In the unusual case where the homeowner does something weird, such as remove the deck rather than repair loose boards, the house would fail the 1004d, wouldn't it- the HO did not make the repairs, they took it on themselves to remove the deck.

Obviously the client would see that, and you can discuss with client if they want a new appraisal- either the owner , genius that they are removing a deck, would need a new appraisal, or not get the loan, since they failed to fulfill a condition of the original loan ( make a repair, aka replace or repair loose deck boards).

 

[djd09]

No where does FNMA say that we the building contractor to instruct the HO exactly how to handle their property.

Is this the problem. You cannot copy and paste a Fannie "guideline".

 

[J Grant]

So in your professional opinion you concluded the deck or lack there of has no impact on the market value. The removal of the deck fixed the safety issue; broken, missing deck boards. With the deck removed now your exhibits, i.e. sketch, photos, page1 & 2 URAR etc. misrepresent the actual physical characteristics of the subject to the client and/or any reader.

Actually, removal of deck did not fix the safety issue- the appraisal was made subject to repair of deck boards, not removal of deck. On the 1004 D inspection, it would be marked NO, as in no, the borrower /owner did not fulfill the subject to y to repair the deck in replacing missing boards. Instead, this owner decided to remove the deck. So now the owner's actions has created a choice for the lender: deny the loan (since owner did not comply with repair of deck boards), or order a new appraisal, since the owner has now materially changed the property ( with a possible impact on value)

 

[Meandering]

If that is truly the case, then I can condition to remove the deck. You seem to think that we are the home contractor with carte blanche to spend their money the way we want them to. The repair that we call that you highlighted is for the repair of the hazard issue. That is the repair. No where does FNMA say that we the building contractor to instruct the HO exactly how to handle their property. End of story.

Now where does Fannie say you make a C5, subject to.

That is your client's requirement.

You are only conditioning for the repair of a hazard.

The HC is CREDIBLE for the most efficient means of repairing "the hazard".

And HC based on the repair of broken boards is not credible if you cite the repair as including a 1200 SF addition, even though, the homeowner can opt to build a 1200 SF addition.

You are done, as of the effective date of value.

If they repair or not, it has nothing to do with your report.


.

 

[TRESinc]

Actually, removal of deck did not fix the safety issue- the appraisal was made subject to repair of deck boards, not removal of deck. On the 1004 D inspection, it would be marked NO, as in no, the borrower /owner did not fulfill the subject to y to repair the deck in replacing missing boards. Instead, this owner decided to remove the deck. So now the owner's actions has created a choice for the lender: deny the loan (since owner did not comply with repair of deck boards), or order a new appraisal, since the owner has now materially changed the property ( with a possible impact on value)

why? removing the deck cured the problem - loose boards in the deck causing an unsafe condition. the unsafe condition has been cured, just not the way YOU as the appraiser thought it should be. the loose boards are gone and no one will trip over them.

 

[residentialguy]

Now where does Fannie say you make a C5, subject to.

Huh??? I'll give you $1000 if you can highlight me saying that. If there is even one thing on the property improvements that affect the safety, it is automatically a C6 and must be made subject to repair.

The HC is CREDIBLE for the most efficient means of repairing "the hazard".

removing the deck was a pretty efficient means of repairing "the hazard". In fact, more efficient. Repairing some of the boards with new is a whole different look and will look like a patch job. Now you'll have to stain the whole deck. The job cost is now up to $2,000. Of course, the deck is still old. How much does a hammer and saw cost?

 

[residentialguy]

Via your lender client, you have the "authority" as an appraiser to call for the repair to be done in a workmanlike manner (or done by a licensed professional if it is electric or plumbing )

We have the authority to identify the adverse condition and require repair so that the improvements are safe.

I did a bit more digging. Do we condition it to how we want them to repair, like you suggest...or do we identify the adverse conditions that need to be repaired.

From FNMA's latest Q&A. Updated December 21, 2017
Q32.
What is expected with regard to the appraiser’s inspection of a property?

• Fannie Mae requires that the appraiser conduct a complete visual inspection of the accessible areas of the interior and exterior of the property. The appraiser is responsible for noting in his/her report any adverse conditions (such as, but not limited to, needed repairs; deterioration; or the presence of hazardous wastes, toxic substances, or adverse environmental conditions) that were apparent during the inspection of the property or that he/she became aware of during the research involved in performing the appraisal. The appraiser is expected to consider and describe the overall condition and quality of the property and identify items that require immediate repair as well as items where maintenance may have been deferred and which may not require immediate repair.

Sure sounds like what I've been saying. I didn't see anything about giving us the power to tell them how to fix the required repair issues. We report the adverse condition and that needs to be repaired so that there is no longer a safety issue.
That peeling paint is a safety issue. The house was built prior to 1978 and FHA does not allow peeling paint due to lead base paint. Report is made subject to repair of the peeling paint. How they repair it is up to them. They could repaint it or they could re-side it.