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Subject To Appraisal

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investor

Freshman Member
Joined
Dec 26, 2010
Professional Status
General Public
State
Pennsylvania
I'm the buyers real estate agent on a current deal in Pennsylvania to purchase a detached home. The relevant facts follow:
  1. The appraiser called for a structural engineer to examine the foundation of a sun room to determine if this compromised the overall structure and was a threat to the safety of those living there.

  2. The engineer visited the home and created a report stating that 'In its current condition the sunroom is sate and structurally stable.' The report was provided to the lender and the appraiser.

  3. The lender is stating that the appraiser should now change the appraisal to be 'as is' from 'subject to'. The appraiser is unwilling to do this and feels that this should not be necessary for the underwriters to approve the loan. It seems like the lender is not going to approve the loan if the appraiser doesn't make this change.
Any opinions or advice appreciated.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
The appraiser is right, the lender's underwriter can clear the condition on the report. It is up to the lender, not the appraiser, to say the inspection condition was cleared.
 

gregb

Elite Member
Joined
Sep 3, 2011
Professional Status
Certified General Appraiser
State
California
In the situation described, the original appraisal report stays pristine, because on the effective date of the appraisal there was concern regarding the soundness of the improvements. My bank clients would submit the engineer's report to the appraiser, and if satisfied, the appraiser would supplement the original appraisal with form 1004D, stating the structure/improvements were sound, based on the engineer's report. Some lenders might only require a statement on the appraiser's letterhead instead of form 1004D. In either case, I do not see this situation solved by changing the original appraisal report. Or as Randy states above, the underwriter clears the condition without involving the appraiser.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
What they said above. The report says that he made an extraordinary assumption that it is fine as long as a study was done showing otherwise. A study was done, therefore all is good to go. As greg said, the lender could ask for a 1004D if they have a problem with that, but the original report is never to be altered because it reflects the inspection of the effective date. Think of a new construction appraisal...it is never changed from subject to completion. They get a letter from the appraiser saying it was completed. In your case, the lender got a letter from the specialist, which was what the appraisal called for.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
subject to the following required inspection based on the extraordinary assumption that the condition or deficiency does not require alteration or repair:

This subject to condition requires no further input (or changes) from the appraiser. Reading is fundamental, reading comprehension is sadly a lost art.
 
D

Deleted member 130081

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I think the LO can clear the appraisal/loan without the appraiser. I also think there is zero wrong with revising the appraisal to as-is, making a note of what happened in the report and changing the date of report - the effective date of value would stay the same. I dunno, I would be fine with it.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
I think the LO can clear the appraisal/loan without the appraiser. I also think there is zero wrong with revising the appraisal to as-is, making a note of what happened in the report and changing the date of report - the effective date of value would stay the same. I dunno, I would be fine with it.

I can't believe you would even suggest such a thing.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
I also think there is zero wrong with revising the appraisal to as-is, making a note of what happened in the report and changing the date of report - the effective date of value would stay the same.
You should go study USPAP further ...

Any opinions or advice appreciated
As noted above this is a lender issue not an appraisal issue. As the Buyer Agent I would have your client address the issue further with their loan officer. You may even want to begin discussions with another lender just in case ...
 
D

Deleted member 130081

Guest
You should go study USPAP further ...


As noted above this is a lender issue not an appraisal issue. As the Buyer Agent I would have your client address the issue further with their loan officer. You may even want to begin discussions with another lender just in case ...

I love USPAP and try to read, understand and follow it as much as possible, so if you could enlighten me I would be grateful. I sincerely mean that.
 
D

Deleted member 130081

Guest
I can't believe you would even suggest such a thing.

Why not? I'm serious I don't see the issue. I would be grateful for an explanation other than go read USPAP, because I do read USPAP. What am I missing here?
 
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