"Subject To" Conditions Ignored/Superceded

[ZZGAMAZZ]

Kinda embarrasing that I don't know the answer; however, can underwriting supercede the "subject to" provisions of an appraisal report based upon a conventional (rather than FHA) loan?

If the report is conditioned by the appraiser as "subject to" resolution health & safety issues or the Certificate of Occupancy being granted, etc., can underwriting decide whether or not the issues are pertinent?

If so, is the appraiser fully relieved of the commensurate liability, or is the appraiser responsible to keep track of the "subject to" conditons that he or she imposed, which might compromise collateralization? This would appear to be a SOW issue depending upon the interpretation of when an assignment ends; and an assignment in my inexperienced opinion would not end until conditions were satisfied.

The issue might be appraisal 101 but I don't recall it being addressed from this perspective, on the Forum.

 

[Couch Potato]

Underwriters can do whatever they want, but they could not hold you responsible if they fail to confirm the conditions of your appraisal are met.

 

[Ultraviolet]

It is my understanding (I could be wrong) that the UW is responsible for making the loan decision. The appraisal is only a tool used to assist in making that decision. The UW can completely disregard the appraisal if he/she wants to, though that's highly unlikely.

The appraiser isn't responsible for decisions made by others. As long as the original report clearly states the "subject to" items and how they may impact value if they're not addressed, I wouldn't worry.

It sounds to me like the UW is doing his/her job and not placing responsibility on you for addressing conditions that are outside your field of expertise. Isn't a C of O someone else's area?

 

[CANative]

The appraisal is subject to the condition, not the loan. I don't think you could tell a lender they are prohibited from making a loan until they comply with your demands.

Who would want that much power?

 

[c w d]

Your opinion of value is based on certain conditions. If the client choses to ignore those conditions that is their responsibility. Appraisals are not binding to the clients.

 

[Marcia Langley]

Ditto everyone else.

Especially:

Your opinion of value is based on certain conditions.

Your opinion of value is subject to the condition you placed upon it. If that condition is not met, your opinion of value could change. You have reported this to the client in your report.

Now the client has that appraisal to help him make his decisions, not to make his decisions for him.

When a client chooses to fund a loan without requiring the conditions be satisfied, they are usually not interested in finding out how much your opinion could change. They usually make their decisions based on other factors.