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

[J Grant]

Fannie is minimum guidelines and an appraiser is expected to have common sense . They can put a clause in such as repair to be performed in a workmanlike manner
Tearing down a deck is not an efficient means of replacing loose/missing boards. The owner has not fulfilled the yes/no portion of the 1004 D, the answer is no, the owner has not repaired the boards. The owner instead has opted to remove a deck, making the property different ( inferior ) than it was appraised on effective date ( with possible value issues)

 

[residentialguy]

They can put a clause in such as repair to be performed in a workmanlike manner

I don't have a problem with that. You can fix it both by replacing it or tearing it out in a workmanlike manner that corrected the safety issue.

 

[residentialguy]

The owner has not fulfilled the yes/no portion of the 1004 D, the answer is no, the owner has not repaired the boards. The owner instead has opted to remove a deck, making the property different ( inferior ) than it was appraised on effective date ( with possible value issues)

State board:
I'd like to see your work file for this second appraisal where you stated the property was worth less.

 

[jay trotta]

Fannie is minimum guidelines and an appraiser is expected to have common sense . They can put a clause in such as repair to be performed in a workmanlike manner Tearing down a deck is not an efficient means of replacing loose/missing boards. The owner has not fulfilled the yes/no portion of the 1004 D, the answer is no, the owner has not repaired the boards. The owner instead has opted to remove a deck, making the property different ( inferior ) than it was appraised on effective date ( with possible value issues)

(JG) Agreed; from the 1004D;
INTENDED USE: The intended use of this certification of completion is for the lender/client to confirm that the requirements or conditions stated in the appraisal report referenced above have been met.

INTENDED USER: The intended user of this certification of completion is the lender/client.

HAVE THE IMPROVEMENTS BEEN COMPLETED IN ACCORDANCE WITH THE REQUIREMENTS AND CONDITIONS STATED IN THE ORIGINAL APPRAISAL REPORT?

Yes /
No If No, describe any impact on the opinion of market value.

*APPRAISER’S CERTIFICATION: I certify that I have performed a visual inspection of the subject property to determine if the conditions or requirements stated in the original appraisal have been satisfied.

SUPERVISORY APPRAISER’S CERTIFICATION: I accept full responsibility for this certification of completion.

This only reflects parts of the 1004D - felt pertinent to the Q/A discussion*

 

[J Grant]

"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?"

From your OP- anyone would assume to cure the unsafe boards they would replace them, not tear down the deck ! You could have easily specified, "replace or repair the unsafe boards". Okay, you didn't , just said cure the safety hazard- that opened the door to this owner making the oddball decision to remove deck instead. The answer should have been "NO" to the yes /no portion of the 1004 D, as in No, they did not repair it, they removed it ....then you "fudged your way out of it". Why would you do that? Yeah, the lender was cool with it cause they just want to make the loan- they know It's your liability the original is a house with a deck, adjustments for it, and then as a "cure" the owner removes the deck, and now they are lending on a house with no deck. Hopefully nobody will ever look at this file in the future.

 

[J Grant]

State board:
I'd like to see your work file for this second appraisal where you stated the property was worth less.

If you did a second new appraisal with house worth less due to lack of a deck, it should be fine, if state board asked for it for some odd reason. If the deck added to value of house, and it was removed, and you did a new eff date appraisal with new value due to lack of deck, I fail to see the problem.

 

[J Grant]

INTENDED USE: The intended use of this certification of completion is for the lender/client to confirm that the requirements or conditions stated in the appraisal report referenced above have been met. INTENDED USER: The intended user of this certification of completion is the lender/client. HAVE THE IMPROVEMENTS BEEN COMPLETED IN ACCORDANCE WITH THE REQUIREMENTS AND CONDITIONS STATED IN THE ORIGINAL APPRAISAL REPORT? Yes No
If No, describe any impact on the opinion of market value.

Above copied from 1004D form: The answer would be no: They did not cure the hazard ( replace unsafe boards), they removed the deck!! You did not condition the repair on removing the deck! Then it asks impact on opinion of market value- if decks adjusted at 5k, then it seems would have a value impact of 5k.

 

[residentialguy]

If you did a second new appraisal with house worth less due to lack of a deck, it should be fine, if state board asked for it for some odd reason. If the deck added to value of house, and it was removed, and you did a new eff date appraisal with new value due to lack of deck, I fail to see the problem.

yes, that wonderful double edge sword they call the 1004D, where you just gave a new 2nd appraisal by saying that it the property was worth $5k less than your opined value because of the deck missing.

 

[J Grant]

yes, that wonderful double edge sword they call the 1004D, where you just gave a new 2nd appraisal by saying that it the property was worth $5k less than your opined value because of the deck missing.

You addressed a specific assignment condition of the 1004 D- they ask about impact on value of not performing a repair. If that is a new appraisal, since it addresses value, so be it- that is why the 1004 D is now a new assignment as a stand alone form ( it used to be added to the OA)

 

[residentialguy]

1004 D is now a new assignment as a stand alone form

Ok...is that new appraisal USPAP compliant just by using that form standing alone?