Subject to - change to As is?

[GeorgetownAP]

Did a purchase assignment over 1 month ago - requested fully executed contracts which could not be provided. I asked how the client (not the AMC) wanted to handle it --- the bank said do the assignment "Subject to" receipt and review of fully executed contracts.

Just received a "post-revision" request..... the bank just received the contract... and they want me to revise my original appraisal to "as is" with review of contract.... with no fee, of course!

I went back to the client and explained that " subject to" condition requires a 1004D report, and that I could not just "update" my original report. And, asked for a minimal fee as I would not need to go back on-site. Obviously, I am getting push-back from the AMC and the client. Am I crazy???

 

[CANative]

What's wrong with having two reports out on the same property and transaction? Same effective date of value, different report dates to distinguish between circumstances then and circumstances now.

And who said a 1004D is required? You could explain the circumstances in the new report.

 

[CANative]

Your scenario has potential for a good discussion.

Did you get any sort of contract the first time and the problem was merely a lack of signatures? If so was the signed contract different in terms than the one you previously looked at?

How did you reconcile the previous contract with the opinion of value? Would that change now?

 

[J Grant]

Did a purchase assignment over 1 month ago - requested fully executed contracts which could not be provided. I asked how the client (not the AMC) wanted to handle it --- the bank said do the assignment "Subject to" receipt and review of fully executed contracts.

Just received a "post-revision" request..... the bank just received the contract... and they want me to revise my original appraisal to "as is" with review of contract.... with no fee, of course!

I went back to the client and explained that " subject to" condition requires a 1004D report, and that I could not just "update" my original report. And, asked for a minimal fee as I would not need to go back on-site. Obviously, I am getting push-back from the AMC and the client. Am I crazy???

I think you are being crazy. The report was subject to receipt of contract, now you have the contract, so note date you received contract and change it to as is. I'll leave the fee up to you, I don't think it is fee worthy and you did not change the value opinion or anything else since effective date, just add comments that you reviewed and reviewed comments on new date and remove subject to, make as is, put in addendum the change and why and send with new signature date.

 

[GeorgetownAP]

I did not receive any contract.... what I did receive was the real estate agents "Offer to Purchase" - spelling out offer price, terms and conditions. (and, many times, by the time the sale gets to contracts, the original accepted price has been renegotiated, sometimes seller concessions, etc, are included)..... AND THE BANK KNEW THIS UP FRONT. I checked off the "Did not analyze" box, and wrote "A SALES CONTRACT WAS NOT AVAILABLE AT TIME OF INSPECTION OR DURING NORMAL COURSE OF BUSINESS. REVIEW OF BINDER CONFIRMED SALES PRICE AND NO UNUSUAL CONDITIONS OR SELLER/BUYER CONCESSIONS. THE APPRAISAL IS SUBJECT TO THE RECEIPT AND REVIEW OF FULLY EXECUTED CONTRACTS. DATE PROVIDED ON 1ST PGE IS BINDER DATE ONLY"

 

[J Grant]

1004 D requires a property inspection, or analysis to see if value changed. Receipt and review of contract requires neither, therefore 1004D not needed.

 

[GeorgetownAP]

I don't think I am being crazy..... in fact, I checked with the Appraisal Institute, as this is something that can keep happening. According to them, As this is market driven, the market may have changed since effective date of original appraisal, and terms and price may, in fact, not be in keeping with what the market is currently doing (and, in this case, could be as contracts were so delayed in reaching me). Also, regardless of what is being asked.... changing a "Subject to" to an "As Is" usually warrents a new assignment - whatever form you use to report it..... Hence, my reluctance to just change the report... crazy, maybe..... but I'd rather be safe than sorry in the long run!

 

[J Grant]

I don't think I am being crazy..... in fact, I checked with the Appraisal Institute, as this is something that can keep happening. According to them, As this is market driven, the market may have changed since effective date of original appraisal, and terms and price may, in fact, not be in keeping with what the market is currently doing (and, in this case, could be as contracts were so delayed in reaching me).

They gave you poor advice (or maybe you phrased the question poorly). You ARE NOT changing your market value opinion, so what difference does it make if the market has changed since eff date?

Also, regardless of what is being asked.... changing a "Subject to" to an "As Is" usually warrents a new assignment -

It does not warrant a new assignment. A 1004D is considered an update to a prior assignment. The mistake was making this report subject to review of contract in the first place. you should have noted that contract was not received though you asked for it and sent report as is. Too late for that now, but insisting that receipt of contract means a new assignment makes no sense.

Whatever form you use to report it..... Hence, my reluctance to just change the report... crazy, maybe..... but I'd rather be safe than sorry in the long run!

See above comments.

 

[Terrel L. Shields]

A contract would not be a condition of the report imho. You either have it, part of it, or you don't have any of it. Report and go on. USPAP does not require me to obtain it. Nor should I require them to provide it as a condition of the report. There is no mandate from the PTB to do so.

Not that it won't stop them from their own deer in headlight moment when they realize that they might need it to be included and want you to revise the report anyway.

 

[J Grant]

Making a report subject involves a condition of the property, not condition of a contract being missing. The lender gave you poor advice but you did not even have to ask them the question.