The "proper" use of the 1004D

[Frederick R. Ruffell]

Oh, and Webbed you never told me what a Basement is! Is that where you guys keep that stuff you call snow?

 

[Mike Kennedy]

Once you "Base" your appraisal on a Hypothetical Condition your report itself should in fact reflect that hypothetical all the way through the report. REASON: The report is hypothetical !!! So is the analyses. Therefore, in this case, I agree with your AMC chief appraiser. If you are conditioning under a HC for the property to be made "Legal" you would check off the "Legal" box on the form as your report is "Based" on the HC.

Yea Verily Forsooth.

 

[Frederick R. Ruffell]

Once you "Base" your appraisal on a Hypothetical Condition your report itself should in fact reflect that hypothetical all the way through the report. REASON: The report is hypothetical !!! So is the analyses. Therefore, in this case, I agree with your AMC chief appraiser. If you are conditioning under a HC for the property to be made "Legal" you would check off the "Legal" box on the form as your report is "Based" on the HC.

Yea Verily Forsooth.

I disagree, the Final Opinion of Value is based on a HC, subsequently your analysis includes the HC, But the rest of the report does not. I try not to confuse the REPORT with the APPRAISAL. They are not the same thing, that is why USPAP is uses a seperate Standard for each, Standard 1 for Appraisal Development and Standard 2 Appraisal Reporting. As an appraiser I first need to acertain (and report) what is actually there before I can perform my analysis using a HC. So what was there on the date of inspection was/is illegal no ifs ands or buts about it. Now I can offer a final opinion of value based on a HC. Of course my analysis will account for the HC.

Let me ask you this, if a structure had an illegal addition of GLA and we you were NOT going to include it in your analysis of GLA and the market gave no value to it, positive or negative, Would you include it in your sketch? If you use a HC that it does not exist do you now mark Legal??? The more I think about it the more I am convinced that I report what is there in reality (as not to mislead) before I consider the value under HC.
Wow I believe I have clarity now. Thanks

 

[Frederick R. Ruffell]

And another thing, I just looked at the URAR again. Why would we make a HC about the illegal condition of the subject? Why not just make HC about the Zoning designation. SO put down on the form a zoning designation that allows for the second unit and make that the HC?
I think not, I report what is reality and then apply a HC to the final opinion of value. The same goes for the Subject's illegal condition. Also how can you say what the H&BU is if the CURRENT USE is Illegal but under the HC it is legal?

 

[Mike Boyd]

response cancelled.

 

[Mike Kennedy]

Let me ask you this, if a structure had an illegal addition of GLA and we you were NOT going to include it in your analysis of GLA and the market gave no value to it, positive or negative, Would you include it in your sketch?

the addition existed as of the EDA and must be included :icon_idea:

If you use a HC that it does not exist do you now mark Legal???

the HC addresses the existing improvements.

 

[Frederick R. Ruffell]

The way I see it is if the current use under the current zoning is illegal then it would be misleading to state otherwise. The HC applies the final opinion of value, that is why they put the check boxes where they did instead of at the begining of the form. But I recognize your right to get it wrong

 

[Mike Kennedy]

In a hypothetical condition the premise is known to be false*... but assumed true for the purpose of the appraisal.

* clearly stated in H&BU and Zoning Compliance Comments versus pretending the illegal addition doesn't exist - i.e....

"if a structure had an illegal addition of GLA and we you were NOT :Eyecrazy:going to include it in your analysis of GLA and the market gave no value to it,"

I suggest the premise of your hypothetic question above is wholly incorrect.

 

[Webbed Feet]

<........snip......> I think not, I report what is reality and then apply a HC to the final opinion of value. The same goes for the Subject's illegal condition. Also how can you say what the H&BU is if the CURRENT USE is Illegal but under the HC it is legal?

F.R.

LOL......OH did you set yourself up for this one!!!!!!! So did your mentor.

If what you say is true about how you and your mentor handle your reports on all HC "Based" real estate appraisals, and how the trade should do it, then please redact out any identifying confidential information out of both of your last Proposed new construction assignments, "Plans and Spec" appraisals, and present the work to the forum.

Because I want see both of your 1004 page one "Improvements" sections that were left totally blank, filled in with only "N/A" or labeled "Vacant Land," versus that section of the 1004 filled out "Based" the the non-existent house that is not there yet at the time of inspection!!!!!

After you spend a few hours trying to find one in your files where either you, or your mentor, EVER sent a proposed construction SFR appraisal, using the 1004 as a format for the reporting, out the door with all of the improvement section left blank .....................because that was the "Clarity" you've now found that requires you report what is really there..... which of course would be nothing but land in such a case..... I'll stop smiling the way I am at the moment....



Somehow, I bet I am right, and this is going to hit you a bit hard that every proposed construction SFR assignment you have ever done, that you reported it just exactly as I said it should be done..... with the entire page one of the URAR "Based" on "As If" that the house was really there. So was your sketch too I would imagine, as I noted you brought up sketching... and I bet you sketch the plans, to verify the GLA, and include that sketch in the report... right?

Look, any appraiser could handle these complex reporting assignments either way we are discussing here. But one had better be really stinking careful, in addendum that are placed BEFORE the form, in telling all readers what parts of the reporting are "Based" on the HC, and what are not, doing it the way you think is "clarity" right now. Of course, one could provide a part narrative doing it the way you and your mentor are thinking about it. I just think you both don't realize just how confusing that makes the final report is all, and that it is NOT the typical trade standard to do such reporting in that manner using Fannie forms.

Tackle life as an appraiser your way if you wish, but I will instead provide a couple of pages of narrative, before the "form" in such a report, describing how things really are, describing the HC used and it's affect on the analyses, and then warning the reader that all the rest of the "form" (the report) that follows is "Based" on the HC that has been invoked. Otherwise, I envision your method reporting the reality on page one of the URAR, THEN the HC on Page two for an approach to value, and then some narrative reporting the page one information the HC is based on? ... VERY confusing!... You might as well use two "Page One's, one for reality and one for the HC doing it that way!

:new_smile-l: <........................still smiling.......

P.S. I think we are getting hung up on the lousy way Fannie laid out these forms. Your mentor and you are looking at the way the those forms flow as the way Fannie ordered the layout of the information. Only once we all look at how we use these forms, to report a proposed construction assignment, it leaps at us that it doesn't really work like that. Imagine if Fannie had WISELY placed all the final reconcilation check boxes, including CB2 or CB3 or CB4, at the TOP of page one on the URAR instead of where they were placed...... NOW then... How would you fill out page one of the URAR in that case? .. I'll admit up the thread when I posted "The report is hypothetical," that I mispoke. Obviously, the "report" is real, we reported! .. But the "report" is reporting a hypothetical analyses ............................... the subject does not yet exist the way it is being reported.

 

[Frederick R. Ruffell]

Webbed, this is NOT proposed construction! This actually exists! IT IS illegal in it's current state. but to answer your question... no I do not generate my own sketch in proposed construction. I include the plans as approved by the municipality. Those plans are kept in the work file along with the other documentation.

But once again there is doubt in my mind, so unless there is something specific in writing I think I will call OREA and get their answer. I will keep you posted.