Two Values Including Prospective Opinion

[ZZGAMAZZ]

Another doozy of an assignment. Engagement requires contemporaneous As Is vaue and also prospective As Repaired value of SFR with an existing DU that will be enlarged and improved, as well as a detached garage that will be converted into an ADU. To do so is supported by USPAP where the potential for multiple values to be reported is addressed, and Prospective opinions are described throughout USPAP as well as AO-17 and AO-34.

The potential application in a prospective value assignment of an EA as well as a HC are described in USPAP. Each of two alternatives are logical: EA because one must assume that the proposed construction will be completed as per plans/specs provided by the client, and HC because the appraiser knows it isn't true on the property inspection date.

Questions:
1) EA or HC or both?
2) Are 2 inspection dates as basis of two Effective Dates required, one for date of inspection and another for anticipated future occupancy?

Note: Advice concerning the decision to accept the assignment and/or the need for a reasonable fee isn't needed because mine was a business decision to accept--unless advice is based upon USPAP, etc.

 

[glenn walker]

Another doozy of an assignment. Engagement requires contemporaneous As Is vaue and also prospective As Repaired value of SFR with an existing DU that will be enlarged and improved, as well as a detached garage that will be converted into an ADU. To do so is supported by USPAP where the potential for multiple values to be reported is addressed, and Prospective opinions are described throughout USPAP as well as AO-17 and AO-34.

The potential application in a prospective value assignment of an EA as well as a HC are described in USPAP. Each of two alternatives are logical: EA because one must assume that the proposed construction will be completed as per plans/specs provided by the client, and HC because the appraiser knows it isn't true on the property inspection date.

Questions:
1) EA or HC or both?
2) Are 2 inspection dates as basis of two Effective Dates required, one for date of inspection and another for anticipated future occupancy?

Note: Advice concerning the decision to accept the assignment and/or the need for a reasonable fee isn't needed because mine was a business decision to accept--unless advice is based upon USPAP, etc.

Then you shouldn't have to ask for advice you either do or don't. Usually when I had to ask it meant i was not up to speed or didn't want to do my first surgery on a good patient.

 

[Terrel L. Shields]

Are you asked to do the "as repaired" as of a future date, "prospective"? (EA) Or, asked to value the property as of the date of report as if it were built? (HC)

"As is" is required of all appraisals under the Interagency Guidelines (IAG)

 

[ZZGAMAZZ]

Then you shouldn't have to ask for advice you either do or don't. Usually when I had to ask it meant i was not up to speed or didn't want to do my first surgery on a good patient.

You know I always want [and Need] advice, just dont want responses telling me to charge more because that's a "business decision," which is a term I use since I first saw one of your comments couple of years ago.

 

[ZZGAMAZZ]

Are you asked to do the "as repaired" as of a future date, "prospective"? (EA) Or, asked to value the property as of the date of report as if it were built? (HC)

"As is" is required of all appraisals under the Interagency Guidelines (IAG)

Hmmmm. Assignment via an AMC doesnt describe Effective Date of AR, or date when the renovation completion is anticipated, and I just assumed [maybe incorrectly] that it was in the future. I will ask that ASAP. In fact until this moment I never understood how a prospective value in the future could be provided, based on current info...or even now, how a future value can be based on market reaction to current info. Prospective seems way more complex than retro...

 

[Terrel L. Shields]

Prospective seems way more complex than retro...

Yes. Your date of value is in the future at a time when you anticipate it should be done. Since it is the probable event, it's not contrary to what will exist on that future date so it is an Extraordinary Assumption. However, you also have to project what future market conditions and what prices will do between now and then. Here, I would predict a very slow increase in prices, flat sales and cautious optimism that the economy remains in reasonable shape.

 

[TerryRohrer]

The as is should be as of effective date (inspection). As repaired should be subject to completion (HC) as of the same date. Why make it as difficult and risky as humanly possible?

 

[J Grant]

Another doozy of an assignment. Engagement requires contemporaneous As Is vaue and also prospective As Repaired value of SFR with an existing DU that will be enlarged and improved, as well as a detached garage that will be converted into an ADU. To do so is supported by USPAP where the potential for multiple values to be reported is addressed, and Prospective opinions are described throughout USPAP as well as AO-17 and AO-34.

The potential application in a prospective value assignment of an EA as well as a HC are described in USPAP. Each of two alternatives are logical: EA because one must assume that the proposed construction will be completed as per plans/specs provided by the client, and HC because the appraiser knows it isn't true on the property inspection date.

Questions:
1) EA or HC or both?
2) Are 2 inspection dates as basis of two Effective Dates required, one for date of inspection and another for anticipated future occupancy?

Note: Advice concerning the decision to accept the assignment and/or the need for a reasonable fee isn't needed because mine was a business decision to accept--unless advice is based upon USPAP, etc.

Are you SURE that the as-repried value is a so-called prospective value?

Because normally, especially for a URAR form conventional lending assignment, it is subject to (repair, remodel, etc.) as of the effective date of the inspection. In other words, it is appraised to the current value as if the property were repaired, including the ADU, etc.

Two different values, one AS IS, and the other AS REPAIRED, as of the SAME effective date is typically the assignment - check with your client.

 

[Tom D]

On many rehab loans they want an 'as is', and 'as finished'. Sometimes they only want a line stating the 'as is' value. They are more concerned with the finished value which is the main appraisal with an added 'as is' comment or page. So find out how they want it done, either with 1 appraisal, as first finished, then 3 comps page for an 'as is value, or just 1 sentence 'as is' value. I don't think they want 2 separate appraisals.

1 appraisal inspection date.

 

[ZZGAMAZZ]

On many rehab loans they want an 'as is', and 'as finished'. Sometimes they only want a line stating the 'as is' value. They are more concerned with the finished value which is the main appraisal with an added 'as is' comment or page. So find out how they want it done, either with 1 appraisal, as first finished, then 3 comps page for an 'as is value, or just 1 sentence 'as is' value. I don't think they want 2 separate appraisals.

1 appraisal inspection date.

Yes now in retrospect I understand and agree. For the life of me I wasn't able to figure out whether the As Is value has any bearing on the ultimate As Repaired value, which is based on SCA results of proposed improvements quite unlike the existing improvements. My interview just now with the broker client revealed that the lender will extend a loan based upon an amount that is based upon As Is plus construction budget, none of which affected my As Repaired opinion of course.