Subect "to" because bath is in progress on remolding?

[Fred]

Greg

If the appraiser states that the appraisal is for mortgage underwriting to fannie mae guidelines, Statement 10 becomes moot

If a loan transaction is governed by FIRREA there is nothing an appraiser can “state” to change that.

Even Fannie wants as-is value.

Only if the condition does not rise to the level of a condition requiring immediate repair

Nope. You are putting the “only” in there. They want as-is value every time they buy a loan (just as that is what the originating lender needs to make the loan).

1. No repairs – as-is value
2. Minor deferred maintenance – close enough, as-is value
3. Material defects – Must be cured. If there is an appraisal subject to hypothetical repair, then Fannie says either (a) get an after-repairs “update” to as-is value; or (b) document that hypothetical condition is now real condition (repairs made), hence the first appraised value is now as-is value.

All roads lead to as-is value.

If you were lending your own money, you wouldn't need an appraisal reported on a Fannie Mae form. I would fee free to give you an as-is value.

You don’t think you have this worked around to a strange outcome?? Just consider - a potential client needs to know what a property is worth, but you think appraisal regulations somehow prevent you from reporting what the property is worth, while requiring you to report what you know the property isn’t worth.

 

[CANative]

Even though I have done "as is" appraisals where this condition existed, I voted "subject to" mainly because I've become frustrated at the situation where appraiser's have to make judgment calls over issues that balance on a razor's edge. Fannie Mae plunked this form and certfications on the world without issuing a new set of protocols. At least HUD issued a revised appendix to 4150.2.

I don't know if Fannie Mae made a big issue of this form if it is mainly just the folks on this forum that have blown it out of proporation. It seems clear though that Fannie Mae had a problem with getting junky properties dumped on them and they needed to make their shareholders happy by "doing something."

If clients don't like the way we handle the situation, they should complain to Joe Minnich until Fannie Mae issues some readily coherent protocols.

 

[hastalavista]

I typically follow Steven's suggested process when there are other bathrooms available for use in the house.

Somethings that I do consider, however, are:

1. Is the extent of the work-in-progress such that I cannot reasonably estimate a "cost to cure" and analyze its effect on value?
2. If the only other bedroom available is the "master bath" so that I need to go through the bedroom to access the bath, then that opens another can of worms in Functionality; at this point, I have two functional adjustments to make and perhaps some significant analysis to do. I would discuss this with the client because chances are likely that my FO adjustment in this case may exceed any typical lender's tolerance (so the instructions are then to complete the assignment "subject to").

Good luck!